Another week on and still no full acceptance of the Presidential election result in the US, nor any news about what the UK’s arrangements with the EU will be come 1 January 2021, a date now just 32 working days away. Meanwhile, the Coronavirus rages worldwide, with record infection and death numbers being recorded. It doesn’t seem to bother the markets that much, though, which now seem to realise that the only answer for Governments in the current situation is to continue printing money. These artificially buoyant markets unfortunately have the side effect of helping enable the denial of reality.
The most interesting news this week from the smaller oil companies came from 88 Energy (88E). The Peregrine farm-out is progressing well: multiple bids have been received, the preferred bidder has been selected and the transaction is expected to close within weeks. Meanwhile there has been a resource upgrade at Icewine: total prospective resources are 1.77 billion barrels of oil equivalent with substantial oil volume in the Seabee formation of 1.4 billion barrels and a farm-out process for 2022 drilling at Icewine is to commence immediately. Next up I think will be a placing.
Fellow Alaskan explorer, Pantheon Resources (PANR), announced formal approval of the Talitha unit. Its ambitions to drill the Talitha #A appraisal well in Q1 2021 remain subject to funding and farmout discussions remain ongoing. Compared to 88E’s market cap. of £42 million, PANR appears grossly overvalued at £242 million. I also believe 88E has the more competent and effective management of the two.
Moving down to the more “lifestyle” orientated companies (I’ll cover these today since there was so little news from the more serious companies last week), Union Jack Oil (UJO) announced a Biscathorpe proposed side well planning update. This is not particularly material in the context of a £31 million market cap; maintaining, or exceeding this all comes down to the results announced at West Newton. Of greater interest was the @UnionJackOil account being suspended for violating Twitter rules. What I wonder have the UJO directors and its PR people been posting?
UK Oil & Gas (UKOG) updated regarding the application for judicial review of Surrey County Council’s September 2019 consent for long-term oil production at Horse Hill. A hearing will take place on 17-18 November and the company is well represented by David Elvin QC. It’s unlikely the claimants will succeed and, in any event, focus is now moving on to Turkey. The new prospect there has some decent sounding numbers, although I suspect many of the traditional shareholders who bought in on a rather different prospectus may regard this move as a betrayal.
Rounding off at the bottom end of the junkyard, Mosman Oil & Gas (MSMN) announced an operational update, Nostra Terra Oil & Gas (NTOG) announced a Pine Mills drilling update and Zenith Energy (ZEN) announced the terminations of both exploration in Azerbaijan and its nonsensical LOI for 2.5p per share funding (current share price is 0.35p). As I’ve explained before, all these types of companies do is ramp and place, the “asset” being just a tiresome legal requirement. At the bottom line of the accounts, there’s never actually anything for the shareholders, only losses. Other than occasional ramps to clear placing stock and warrants, and provide the opportunity for insiders to sell short before covering at a profit in the next heavily discounted placing, there is nothing at all in it for investors.
I’ve now nearly finalised the second edition of “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” which includes some interesting new material. Its intention is to be educational, as with my blogs, public and private. Hopefully, what I write can help protect you from being scammed and get you thinking about how you actually can make money in these unconventional markets.
I’ll be sending a complimentary copy in electronic format to all private blog subscribers, existing and new, so if you’d like to read the book, try out a trial subscription to the private blog, details of which are at 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.