I said last week it wouldn’t be long before 88 Energy (88E) started planning its next drill and they confirmed that on Thursday in their latest operational update. It could be quite interesting once fully financed. It’s a share, where if you time it right, delivers returns virtually as good as guaranteed (it did an easy 100% last time from the 0.7p placing in the run up to the spud and I highlighted it as a favourite several times in the blog before that run). It's one I've also profited from many times before. Obviously, you never hold for the drill result.
Overall, there’s been a strong recovery for both the oil price and the markets this past week, with confidence returning and money flowing back into shares. It’s all looking much better now than it was a few weeks ago. Some further news:
UK Oil & Gas (UKOG) converted another £75,000 of the convertible loan, this time at 0.1944p per share. The remaining loan balance is £1.93 million, so still quite a lot to go. Balanced against that is some potential strong news flow regarding not just Horse Hill, but some of their other assets too. Where the price goes from here depends entirely on how much new buying comes in.
Petrel Resources (PET) announced an update on their agreement with the Tamraz Group. Petrel still haven't received the money due and are cancelling the shares that were to be issued to Tamraz, whose remaining shares remain frozen since they still haven't bought back the shares they sold in breach of the lock-in agreement. Meanwhile, Petrel is progressing its existing projects, of which the most promotional would be their Iraq activities. I highlighted PET as a favourite several times last year around 1p and it's now 3.75p, having been as high as 26.5p
Prospex Oil & Gas (PXOG) issued its 2019 final results. Timeframes may well have to be extended since project operators are adjusting to the current environment and taking a cautious approach to discretionary expenditure. Meanwhile, PXOG burns £1 million a year in administrative expenses. It’s difficult with companies like these for shareholders even to have a fighting chance of making money from them if they hold.
People sometimes get angry when I make comments like these and say I’m negative. To be clear about this, all I’m negative about is losing money. I’m very positive about getting it right and succeeding. To do that you need the right shares. And if all I do is just say nice things about them all as some other commentators do, then my comments and opinions would be worthless.
Following on from my recent piece about cleaning up AIM, I think a further major problem is caused by investors’ failure to read and/or understand the disclosure information available. Some trade simply based on someone else's tweet and, to many, their concept of “research” is to read some recent posts on the message boards. The more “diligent” might listen to the latest interview. Very few read the RNS announcements and hardly any read the admission document. Yet these are the key documents mandated by the authorities to be published for investor information.
There is often a reluctance by some investors to confront facts. They know a side of the story that they like and they don’t want to hear anything that contradicts their beliefs. This weakness contributes to huge losses. In reality, if something isn’t what you think it is, you want to be out. Unfortunately, most won’t accept they’ve made a mistake until it’s too late and they’ve lost their money. Pride is the enemy here.
The only way to succeed, of course, is to base decisions on facts, not fallacies which you’d like to be true. Accepting reality is essential. Conviction can only be based upon your own assessment of the facts, not the thoughts and opinions of others.
It’s critical to always bear in mind that many commentators and message board/social media posters have their own agendas and will deny the truth of points you may raise in public, particularly regarding sensitive subjects. You have to be strong enough to believe in yourself and your own knowledge.
Remember with many of these smaller companies, the “other side,” the directors and the promoters, are not playing on the same team as you. Investors are who they feed off. Your money is their living. Read the RNS announcements, the admission document and ignore most of the rest of it. Reality is many investors would spend more time researching which washing machine to buy than they would with shares in which they’re investing 10 or even 100 times that amount. Don’t be one of those. Focus should be on news and share prices and how they’re moving, not the comments of others. This isn’t negative, the return for not allowing yourself to be misled can be serious financial success.
There’s a lot of money to be made in the markets, but not from those companies which are being touted so someone else can sell their shares to you. You need to go for shares where you have the conviction yourself that they will perform and avoid the uncertain trades, which have a habit of ending in losses. The Special Trading Course explains all this. It’s about how to take advantage of what is an imperfect market. It warns you about what to avoid so you don’t get cleaned out and also informs you of the type of situations where there can be virtually guaranteed profit. I think most, even those with significant experience, will find it extremely useful. There are 10 parts at £19.50 per part and I’m certain that it will be really helpful, so for a limited time, you can receive the first part of the trading course for just £1. Read it, see what you think and if it's not for you, you can cancel with the click of a button and pay nothing further. Special links for blog readers and podcast listeners are https://www.oilnewslondon.com/weekly if you want to receive it weekly over 10 weeks, or https://www.oilnewslondon.com/daily if you prefer to receive it over 10 days.
Back to the company news, Aminex (AEX) announced a farm-out update. It's received the Tax Clearance Certificate from the Tanzania Revenue Authority and with onward submission to the Tanzania Petroleum Development Corporation to be forwarded to the Ministry of Energy, Aminex has now accomplished all of the conditions within their control in order to complete the farm-out. Things are starting to look much better for them now.
There’s a sense of deja vu at Providence Resources (PVR) who announced on Friday that SpotOn Energy has experienced some delays in closing out the necessary arrangements with its consortium and has informed Providence that it will be necessary to delay the second tranche of its investment by approximately one week. Let’s hope this doesn’t turn out to be a repeat of the Chinese fiasco.
Jersey Oil & Gas (JOG) announced completion of the acquisition of Equinor's interest in Licence P2170. It provides them with the opportunity to potentially developing the Verbier discovery as part of the Greater Buchan Area hub, plus further exploration upside. As always, it will come down to whether, and on what terms if any, financing can be obtained. It’s potentially a very large project.
This blog covers the news each week. I write another covering my trading ideas, which may be of interest. For those who are not familiar with me, I focus exclusively on small cap oil and gas companies and know this sector inside out. I have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works. I also have many years' operational and corporate experience in the oil business, which enables me to see very quickly whether or not these companies are telling the truth. It's not investment advice that I offer and if you want that, you should speak with a financial advisor. I share my take on companies and the markets and, as those who follow me know, I'm rarely wrong about these matters. Details of the private blog are at https://www.oilnewslondon.com/oilman-jim
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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.