Oilman Jim

A short week, but no shortage of news: Providence Resources (PVR) announced receipt of the outstanding £200,000 from SpotOn Energy and progress with the farm-out of Barryroe is back on.  It’s not clear why PVR needs SpotOn as an intermediary, but the important point is can a deal with a well financed, larger oil company be done.  If so, it will be good news for 20% partners, Lansdowne Oil & Gas (LOGP) too. In other Dublin oil and gas small cap news, Petrel Resources (PET) announced that it is raising £250,000 at 3.25p per share, with the main purpose of advancing its interests in Iraq, where it maintains strong relationships with government officials.  I highlighted PET as a favourite several times last year around 1p and it’s now over 4.5p, having been as high as 26.5p.  Sister company, Clontarf Energy (CLON) , announced preliminary results for the year ended 31 December 2019.  Clontarf’s reports are usually worth reading, if only for Dr. Jo...

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 mi...

There was some talk last week about "cleaning up AIM” and I suggested perhaps borrowing a few ideas from the United States, who have been dealing with the challenges of regulating micro-cap fraud on a much larger scale, for a much longer period of time.  Adopting certain provisions of their Securities Act would help, in particular minimum holding periods for shares issued in placings and disclosure of compensation by paid commentators.  Another practical way, and this approach proved very effective, is when a company announces a new business endeavour and heavy promotion starts off the back of a short news announcement, suspend the shares pending publication by the company of what in the UK would be a new admission document disclosing all information necessary for investors to make an informed investment decision.  I’m not aware of any companies to whom this happened in the US ever coming back.  Just a few thoughts if anyone was serious about wanting to clean up the...

Oil prices have been firming up, making projects more viable now for low cost operators.  It's still difficult for many, but some can make it work at these levels.  More importantly, for those involved in the stock market, it injects confidence and share prices are starting to perform. Not all though.  PetroTal (PTAL) now has collapsed, as I expected it eventually would.  As readers and listeners will know, I’ve been warning about this one for some time.  It’s not just COVID and oil prices that brought them down, rather them having to reveal a contingent derivative liability of $42 million, regarding which they are in "discussions for a multi-year settlement.”  In the meantime, the Bretana oil field is shut in and they have zero, in fact negative cash flow, with their contractors unpaid.  It doesn’t look good.  But what’s fascinating is that of all the companies I criticise, those where there is the most outrage end up collapsing the mo...

I mentioned on Wednesday the number of companies referring to being protected by hedges covering future production and, on the other side of these, the example of airlines who buy fuel forwards.  They’re looking at paying out hundreds of millions now on these hedges, which wouldn’t be a problem if they actually were buying and using an equivalent amount of fuel bought at the new lower market price, since that hedged price was what they were basing all their forward pricing calculations upon.  There was some interesting information last week regarding demand in Spain as pipeline CLH is publishing its data and offering a unique view on lockdown impact.  Petrol is down 75%, diesel is down 55% and jet-fuel is down a massive 93%.  You can see the size of the problem. Another matter which I’m not sure everyone is aware of is that with massive oversupply and lack of storage, producers aren’t getting anything like the prices you see on your screen.  That’s why so m...