Another short week, but an interesting one. Following on from my “success” in predicting the collapse of Block Energy (BLOE), Anglo African Oil & Gas (AAOG) now has come to the end of its life it its current form, losing investors over 99% of their investment. Ironic how I was attacked at the time for explaining what it actually was. I always said the Tilapia field was worthless and the final proof was delivered by the announcement of its sale to Zenith Energy (ZEN) (including a claimed $5.3 million of receivables) for £200,000. The clock now ticks down towards ZEN’s inevitable demise.
Back to something more real, Border and Southern Petroleum (BOR) announced final results. Their farm-out process remains active, although they say progress has been impacted by current industry capital allocation constraints. Cash balance at 31 December 2019 was $3.7 million and administrative expense for the year was $1.45 million. A 25% cost reduction target has been set for 2020, which should enable them to keep going for another three years.
Cluff Natural Resources (CLNR) announced final results. Compared to a market cap of £12 million, as at 31 March 2020, the Company had cash on hand of over £13 million. They continue to work with Shell towards firm well commitments on both Selene and Pensacola, but as the share price indicates, the market is doubtful that will happen.
Union Jack Oil (UJO) and Reabold Resources (RBD) announced the commencement of activity at the West Newton B site. RBD also announced a Romania update, but more interesting now is the controversy swirling around their California “investments” first flagged up by me in the Sunday blog on 21 July last year. More on all this as it unfolds.
Predator Oil & Gas (PRD) converted £70,000 of the outstanding loan note. What they didn't say in the RNS is that this was done at 1.329p, around half the price to which it was ramped last week. It's something I've been warning about and I'd suggest caution here.
Tlou Energy (TLOU) issued an operational report. With the interim power purchase agreement in place, they are now looking to produce electricity both from coal bed methane gas and solar. All still appears to be quite a long way off though and significant further finance will be required.
Bahamas Petroleum Company (BPC) announced that admission to trading on AIM of the fund shares is not taking place as previously announced, as the fund is yet to complete certain necessary administrative processes in The Bahamas. Essentially, the 2p funds (which appeared such a bargain at the time compared to the ramped share price) have not been received.
Regal Petroleum (RPT) issued a Ukraine update. Average daily production for the first quarter was up around 5% at 4,508 barrels of oil equivalent. Market cap is £51 million; cash is over $55 million. For those who like these type of companies, it doesn’t look expensive.
Coro Energy (CORO) and Empyrean Energy (EME) announced a resource upgrade of the Mako Gas Field, but it didn't help their share prices. EME also announced a small £410,000 fundraising at 3.5p (they had to withdraw their proposed £1 million placing due to an understandable lack of interest). The price of EME is now back down where it started a few years ago despite all their claimed successes. Proves yet again my point that these companies are only for trading, not longer-term investing. Of course EME are still doing well compared to their partner, CORO, and its stable mates Echo Energy (ECHO) and Sound Oil (SOU), all now proved to be AAOG and BLOE type failures and all long warned about.
The now connected Nu-Oil and Gas (NUOG) announced a proposed RTO transaction and suspension of trading. Main purpose is to have an excuse for another fund raising. The only binding provision in the deal though is they have to pay the transaction fees of the other party up to £60,000. I think most now know what NUOG and its directors are, thus any deal should be the usual guaranteed, nailed-on failure.
Remaining in the same stable, I said last weekend that the previous Thursday's litigation funding RNS from Ascent Resources (AST) was just a spoof to entice the defaulting placee to pay up and so it turned out, when they announced on Tuesday that the "funder" pulled out over the Easter weekend. To keep the pot boiling, they also announced a "Cuba New Market Entry.” It's exactly the type of flimflam acquisition deal to be expected.
Returning to more serious companies, Hurricane Energy (HUR) announced an operational update. Full year guidance is maintained at 18,000 barrels per day, implying 19,000 barrels per day production for the rest of the year. Hannam & Partners have a risked NAV of 61p per share, five times the current price in the market, with over half its current market cap in cash. It’s still not a company I would want to hold myself though.
Personally, I look for what I would call certainties. Those shares where I think a profit is as good as guaranteed. My trade ideas are in the private blog each week and the link for that is: https://www.oilnewslondon.com/oilman-jim
I’ve also written a trading course explaining exactly how this market works. It’s brutally frank and sets out what to avoid and, most importantly, how to profit. The link for that is: http://www.oilnewslondon.com/trading
I’ve been involved in the markets for a long time now. I bought my first shares in the 1970s and I’ve worked in the financial sector since the early 1980s. My particular knowledge is of the stock markets and I’ve been actively involved in these, both in the UK and the US for over 40 years from both sides of the fence. There’s very little I don’t know about it.
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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.