Oilman Jim

Another interesting week: RockRose Energy (RRE) issued an operations update.  Cash at close of business on 25 March 2020 was £287 million, of which £248 million was unrestricted.  They anticipate unit operating costs of around $30 per barrel of oil equivalent in 2020 and at least $50 million capital expenditure will be deferred.  Current market capitalisation is £85 million. Hurricane Energy (HUR) reconfirmed that it has a strong balance sheet, including $164.3 million of unrestricted cash at 18 March 2020 and is in a strong position to weather this current downturn.  However, it warned that should this change in the market environment persist, it is likely to have a material impact on their capacity to fund capital expenditure.  A further concern was the announcement on Friday that a crew member on the floating production storage and offloading vessel at the Lancaster field had been evacuated to the mainland for medical reasons and subsequently teste...

Interesting times.  Many say there should be a lockdown and some even think the markets should close.  A lockdown is a virtual certainty now and the Coronavirus is going to change society’s priorities massively.  The stock market will keep going, though, just as it did all the way through World War II, and the game there will remain the same, as it has through all the changes over the last few hundred years.  Just with a larger audience now, since in future most people will be in front of the computer working (or not) from home. Moving on to the oil and gas company news: 88 Energy (88E) announced drilling of the production hole is to commence imminently.  They say that “results from the logging while drilling phase of the program are expected to be announced after total depth has been reached and initial analyses have been completed, scheduled for early April.”  88E was a particularly strong performer on Friday rising 25% to 0.75p.  Perhaps s...

It’s been a busy week.  The oil price dropped into the $30s, which prompted a number of company announcements, some credible, some not.  The worst of them also took the opportunity to blame their misfortunes on the Corona-virus. Starting off, RockRose Energy (RRE) was hammered on Monday, "closing the gap" from its last pre-suspension price.  On Tuesday, it confirmed it was "debt-free with net cash of £272.1 million (equivalent to £20.75 per share)," more than double the current share price.  Jadestone Energy (JSE) confirmed "the business is resilient and expected to generate positive operating cashflow in 2020, even at oil prices below $30 a barrel."  In similar vein, Trinity Exploration & Production (TRIN) confirmed their "operating break-even has consistently been below $30 a barrel in all periods since the new management's measures took effect in 2016.” Caspian Sunrise (CASP) knows all about low oil prices.  Although restrictio...

The lower they go, the harder they bounce and there’s still good money to be made, even in (perhaps because of) such markets.  Just look at some of the movements between the previous Friday and last Wednesday.  For those using CFDs and spread bets, there were 100% gains possible even just with retail leverage. On the news front, the usual mixture, but I sense that with the current conditions, companies are holding the good ones back and I expect to see more this coming week. 88 Energy (88E) announced that Charlie-1 appraisal well drilling has commenced.  They say they’re "optimistic that success is just around the corner."  This is a credible drill since Premier Oil (PMO) has farmed in, and a big one targeting 1.6 billion barrels of oil with 480 million barrels net to 88E.  There are seven stacked targets and multiple oil and gas show announcements are highly likely.  I highlighted this as a favourite several times around 0.7p in the blog an...

Quite a week and a particularly savage one for those holding the poorer companies.  The most positive event was 88 Energy (88E) confirming rig mobilisation for the upcoming Charlie-1 appraisal well.  Spud now is imminent and drilling & logging are estimated to take around 30 days.  I highlighted this as a favourite several times around 0.7p and it's now over 1p, having been nearly as high as 1.5p.  It's a big drill targeting 1.6 billion barrels of oil and 480 million barrels net to 88E.  There are seven stacked targets and multiple oil and gas show announcements are highly likely.  It's also a credible drill with Premier Oil (PMO) having farmed in. On to the news from a few less credible ones (better ones will be along shortly), Sound Energy (SOU) announced the immediate appointment of Graham Lyon as Executive Chairman.  Mr. Lyon is a former Chairman of Infrastrata (INFA) .  It will be interesting to see if he presides over a final col...