Into 2021 now and we’ll see what that brings, but first, to tidy up, there were a few interesting announcements in the last two weeks of 2020.
Bahamas Petroleum Company (BPC) announced commencement of the drilling of Perseverance #1. The well is anticipated to take 45 - 60 days to complete, which takes us through to sometime next month. Meanwhile, court hearings have taken place regarding a judicial review brought by environmental activists, whose aim is stop the drill. The judgement of the court is awaited.
Pantheon Resources (PANR) announced that ice road construction has commenced and it’s on schedule in obtaining the necessary permits, contracts, and services to commence the drilling of the Talitha #A well, which is estimated to spud, subject to weather conditions, this month. Talitha #A is targeting four distinct horizons which PANR estimates has the potential to contain in the region of a billion barrels of recoverable oil. The current market capitalisation is equally generous at nearly a quarter of a billion pounds.
Trading at around one-fifth of that capitalisation is fellow Alaska explorer, 88 Energy (88E), whose first well this year, the Merlin-1, is due to spud next month, to be followed thereafter by the Harrier-1. Also coming up is testing of Union Jack Oil (UJO) and Reabold Resources’ (RBD) two West Newton wells. For those who are believers in West Newton and see this as the main attraction of these two companies, UJO is capitalised at around £1.9 million per percentage point and RBD is capitalised at around £0.8 million a point, so more than twice as much of it for your money with Reabold. Wildcat Petroleum (WCAT) is one to keep an eye on, having been admitted to trading on the London Stock Exchange last Wednesday. It’s seeking to invest in businesses within the upstream sector of the petroleum industry.
PetroTal (PTAL) announced the recommencement of oil sales into the pipeline plus its first oil export sale through the Brazilian terminal, which will facilitate future oil production growth when PetroTal continues development of the Bretana oil field. I mentioned PTAL positively a few weeks ago at 7.6p, after having been rather negative from the low 30s down. It’s now 14p and they’re targeting to reach 20,000 barrels of oil per day production in the first quarter next year.
African producer, Savannah Energy (SAVE) announced a financial and operational update. Gross production guidance for 2020 is 19,000 to 20,000 barrels of oil equivalent per day, with full year 2020 revenues greater than $200 million, group depreciation, depletion and amortisation of $35 million to $37 million, group administration and operating costs of $43 million to $47 million and capital expenditure of $8 million to $10 million. The market cap by comparison is £137 million. Also aiming to be a producer, Canadian Overseas Petroleum (COPL) announced a £6 million placing at 0.2p. The net proceeds will be used towards its acquisition of Atomic Oil and Gas LLC.
Zenith Energy (ZEN) announced its successful bid for Tilapia II. Subject to the outcome of the Congolese Ministry of Hydrocarbons’ enquiries this month, ZEN now looks set to become Anglo African Oil & Gas (AAOG) II. AAOG always blamed its staff and contractors for its operational failures. Let’s now see whether or not that was true.
The important point with most of these small-cap/AIM companies, though, is that buying them on the basis of their stated fundamentals rarely works. More relevant are their promotional abilities. I explain all this in great detail to private blog subscribers in the new introductory material sent to them upon subscription. Try it out and you’ll see where I’m coming from. The link is https://www.oilnewslondon.com/oilman-jim
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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.