After its recent run, UK Oil & Gas (UKOG) announced the disappointing news on Monday that planning consent had been refused for the Loxley Portland gas appraisal project, then followed through on Tuesday with a hard dose of reality in the form of interim results. Those who had been buying based upon an organised social media ramp saw the share price back to where it started and lost half or more of their investments; those who engaged the rampers to clear the placing stock and warrants had already taken their money. They’re quite open in last week’s RNS that "raising funds from equity remains the most prudent and only feasible way to fund projects” so further large placings are certain.
I said last weekend regarding TomCo (TOM) that next up would be a new placing and that’s exactly what happened on Thursday, when exactly as expected a new placing was announced on exactly the same terms as the previous cancelled one, which had created the “short squeeze” story enabling the actual placing to be sold into the market in advance at a huge profit for those inside. The shares had traded up to 2.3p and the real shorts would have been covered in the placing at 0.4p, so 80%+ losses for some here.
Similar shenanigans at Mosman Oil & Gas (MSMN). I said that a placing was imminent and inevitable when it conducted its last ramp, which took the share price up to 0.25p. The usual horde of idiots who’d bought it then came on then screaming that Mosman was a profitable producer and required no placing, even saying they’d been assured of such by the company, who would finance everything using their current oil revenues. I tried to explain the facts to them, but they were having none of it. Reality perhaps only dawned for them on Thursday when they were hit with news of a 0.08p placing, less than a third of what some of them had paid.
Short term losses for ill-informed investors on these three are massive, but always remember that in cash terms the market is a zero sum game and what came out of the victims’ pockets went straight into those of the professional operators. It really does amaze me, though, the number of people coming on and arguing that I’m wrong about these things, even resorting to insults. Whether it might be better just to start sharing what is consistently correct information with those who appreciate it is something I’m seriously thinking about. I actually do “know the game” (unlike some others who like to use the phrase) so I can tell very easily what’s coming, good and bad. It’s become second nature now to spot the moves in advance, both up and down.
If you want to “know the game” too, I’d suggest the special trading course which explains it all in 10 parts, one a week, at £19.50 each. You can try out the first part for just £1 to see whether you like it and I’m sure you will. It’s a very small price compared to the value of the information. Details are at https://www.oilnewslondon.com/course
Positive news from Predator Oil & Gas (PRD), which updated on its forthcoming drill in Morocco. The state of emergency there in response to the COVID pandemic is being extended to 10 July, but the rig remains securely stacked in the country ready for mobilisation when circumstances permit. They’ve also identified a new additional target for the first exploration well.
Tower Resources’ (TRP) drill also has been delayed by COVID. They have the added complication of also requiring finance. The first payment from one potential partner has been delayed (again they use Coronavirus as the excuse), but even if received, more will be required. It doesn’t look great, but let’s see.
Baron Oil (BOIL) issued its AGM statement. Again, and as with many others currently, the theme is delay. There is no obligation to drill before 2022 in Timor-Leste and there are no plans to drill in the UK in the foreseeable future. In Peru, where they have been attempting to facilitate the drilling of the El Barco-3X well, it is now becoming clear that the impact of COVID will push any proposed drilling into 2021. In the meantime of course, the bloated overheads that these small public companies like to carry consume all the cash.
Solo Oil (SOLO) announced a $5 million investment facility, but it’s death spiral finance. They do have a plan, but so far that’s all it is and it’s difficult to say that Monday’s strategy, corporate and operations update inspires confidence. The main focus appears to be compensating management.
Delays at SOLO’s partner Aminex (AEX) too. They’ve agreed to extend the long stop date for satisfaction of the conditions to the farm-out from 30 June to 14 July, but in this case, such a short extension may be a positive sign.
Canadian Overseas Petroleum (COPL) is another one which I said was going to be doing a placing and it’s now done two in the past two weeks. The settlement with Essar Mauritius is potentially transformational, but if COPL want to increase their effective 5% stake in OPL 226, substantial further funding will be required.
Reabold Resources (RBD) provided an update on Romania well flow test operations. Unsurprisingly, it’s disappointing. I really don’t think this team has the ability to deliver operational results (or successful investments as they might prefer to call it), which is what they’ve foolishly set themselves up to do, and as regular followers know, this is a view I’ve held for quite some time now.
Providence Resources (PVR) is sharpening itself up, appointing Davy as NOMAD and sole broker, plus appointing existing 1.66% shareholder, Andrew Mackay, as an independent non-executive director. All here now depends on whether SpotOn Energy can pull together the necessary operational and financial elements for a Barryroe farm-out. There’s a good chance it can.
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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.