Some took issue with my comment last week that United Oil & Gas (UOG) looked expensive compared to Europa Oil & Gas (EOG). They seem to be forgetting that the 15p Optiva Securities valuation for UOG is assuming drilling and development success across all their participations. Optiva are not saying that is what UOG is worth now! UOG have been successful with their participation in a development well (no geological risk) on the Podere Gallina exploration permit in Italy, however, that still faces the tortuous multi-year process of conversion into a production permit and, as yet, there are no actual spud dates for drilling on any of the other licences in which UOG is a participant. I'm not saying there is anything wrong with UOG (although its shares are down 14% over the last week), just that there are much better value companies out there in my opinion.
Back to the subject of Italy, Sound Energy (SOU) last week announced completion of the divestment of its Italian holding subsidiary and its assets to Coro Energy (CORO). SOU now will focus on Morocco, where the numbers are huge (2.5 TCF, the same as EOG), but then so is SOU's £447 million market capitalisation. CORO, meanwhile, will focus on Italy, or rather Indonesia, where SOU originally started. Stablemate Echo Energy (ECHO) also had news last week, announcing that the first workover of the three suspended gas wells in Argentina had resulted in the well flowing gas. That surely was a given; the issue is whether the three wells will test at a level which justifies the construction of a 28 km pipeline.
Exciting news from Upland Resources (UPL), which last week announced that it has entered into a Memorandum of Understanding with Brooke Dockyard and Engineering Works Corporation to jointly assess, explore for and develop hydrocarbon assets within the State of Sarawak, Malaysia. The joint venture follows meetings with, and is at the behest of, the Chief Minister and State Secretary of Sarawak and so enjoys the full backing of the State of Sarawak. This deal potentially could move UPL up into a different league entirely and there now is the possibility of quite considerable upside to the share price.
SDX Energy (SDX) announced a significant gas discovery in Egypt and, at last, its share price appears to be firming up. Pantheon Resources (PANR) announced that its latest oil well was flowing at the rate of 170 barrels of water per day and its share price more than halved. At a market capitalisation of £45 million now, this Texas explorer still looks expensive. For those interested in US focussed oil and gas companies, Rose Petroleum (ROSE) capitalised at just £3 million is well worth a look. Its directors demonstrated their confidence buying over 1.2 million shares last week.
Aminex (AEX) and Solo Oil (SOLO) announced the expected spud of the Chikumbi-1 well in Tanzania later this year. SOLO particularly is one to keep an eye on. Petro Matad (MATD) announced a reordered drilling programme to ensure that exploration drilling will commence in Q2 2018. The 90 MMbo Snow Leopard prospect will be spudded first, to be followed by the 290 MMbo Wild Horse prospect.
Columbus Energy Resources (CERP) announced a mixed business, operational and financial update, but what caught my eye was the mention of the South West Peninsula, which contains multiple mapped prospects each ranging in size from 20 - 400 MMbo and has the potential to deliver transformational growth over the next 18 to 24 months. The company also has one of the better websites that I have seen at www.columbus-erp.com
Hurricane Energy (HUR) announced its final results and a transformative year with Lancaster into a project execution phase, targeting first oil in H1 2019. There are two CPRs which independently certify 2.6 billion barrels of oil equivalent of 2P reserves and 2C contingent resources. A quick calculation deducting the $360 million of cash and liquid investments from the market capitalisation shows that one's buying oil here at just 25 US cents per barrel.
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The author holds 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.
Also published on the Oil News London site at https://www.oilnewslondon.com/oilman-jim
Also published on the Oil News London site at https://www.oilnewslondon.com/oilman-jim