Following on from the US Presidential election result, it’s interesting times ahead in the UK both on the political and the economic front. Britain exits the Single Market and Customs Union on 1 January, just 54 days away, and, as yet, no deal has been reached regarding access to GB’s major export market. British businesses still have no idea what the arrangements, if any, will be. It’s potentially a perfect storm when combined with the Coronavirus pandemic and there’s now no political back-up (or promise of a trade deal) from the US, with the probable next American ambassador to the UK describing Brexit as the “biggest own-goal” he’s ever seen.
Moving on to the company news, UK Oil & Gas (UKOG) announced a Horse Hill oil field update. Following a surface-based intervention operation, the HH-1 well has been shut in for a long term pressure build up test. Investors aren’t happy. PR attention will now shift to its JV in Turkey with Aladdin, but how much appeal this will have for UKOG’s historic base is questionable.
Bahamas Petroleum Company (BPC) announced an operational update in relation to its assets in Trinidad & Tobago and Suriname. This is all very much ancillary to their big drill hopefully coming up in the Bahamas soon and the question here is whether it actually is financed or are BPC going to have to first create the volume in the market for the convertible loan providers to sell into. An interesting one.
Independent Oil & Gas (IOG) announced the award of the Phase 1 rig contract to Noble, plus a corporate and operational update. Spudding of the first well is expected in Q1 2021, with first gas in Q3 2021. There’s an interesting presentation available at https://www.independentoilandgas.com/media/1306/iog_corp_pres_nov20_vf.pdf which, most importantly, shows it’s all fully funded. There is a relatively small (£11.6 million) convertible loan note out, but it converts at 19p (52% above the current share price of 12.5p) and it’s clear from previous statements that the LOG administrators are looking for quite a bit more than that for their stake.
Deltic Energy (DELT) received a takeover offer from IOG not too long ago, but the Board preferred to keep control. DELT announced last week an update on activity relating to Licence P2252 (Pensacola), which remains scheduled to be drilled in Q4 2021. Note, though, that DELT is only carried by Shell until the well investment decision is made. After that, it will have to pay its own way.
I could talk about Anglo African Oil & Gas (AAOG), which was suspended last week and how all the other questionable ones I’ve called out over the last year or so (Block Energy (BLOE), Reabold Resources (RBD), PetroTal (PTAL), etc.) have fallen in price dramatically, but I’ll leave it at that for today. People prefer good news and it was pleasing to see the only non-OAG company upon which I’ve commented positively over the last couple of years or so release quite exciting news last week. That company was IQ-AI (IQAI) which I highlighted at around 1p saying “30% downside, 300% upside.” It went over 23p on Thursday. The only other share about which I’ve made the same “30% downside, 300% upside” comment is Petrel Resources (PET) which I also highlighted around 1p. It went to 27p subsequently. Mostly, though, I focus on companies with potentially transformational, upcoming drills with the potential for an easy 100% gain. With the stock market, it’s not about being in every one, rather just being in those where you’re as certain as you can be.
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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research. This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.