Weekly oil news round up by Oilman Jim – OOTT COVID19 88E TLW PTAL PANR GKP EME RMP SOU CORO ECHO

Oil has been trading like a penny share, bagging at one point earlier in the week.  For the first time ever, the price even went negative for delivery.  It’s being hit from both ends with too much supply and too little demand and the worry is when will conditions stabilise.  Producers are cutting output, but the great unknown of course is the Coronavirus, which countries around the world have attempted to counter with varying degrees of success.  It will all stabilise, people will just have to adapt.  However that takes time and governments are hesitant to disclose what will be the necessary new rules until the population gradually adjusts.  It’s not really about politics (experienced doctors, scientists and civil servants are in charge), the political aspect just impacts the way it’s all presented, which unfortunately in some countries hasn’t been done too well.

For shares it was another volatile week and many companies tried their best with news.  88 Energy (88E) announced that a petrophysical interpretation has indicated hydrocarbon pay in two formations.  There’s always a laboratory somewhere that will produce a soothing analysis to keep the necessary optimism alive, but the reality is that Premier Oil pulled out and let 88 Energy have their interest for free.  I think it’s time to move on from this chapter.  88E gets interesting again after it’s financed for the next drill.

Tullow Oil (TLW) issued an AGM trading update.  It’s positive and the shares are now up over 200% from the low they hit last month.  It just shows the type of quick profits that can be made in the current market environment.  And this is a company capitalised at over £300 million.  You don’t have to trade only small cap pump and dump stocks to make fast money now.

PetroTal (PTAL) is being hit hard by the current oil price.  The company now effectively has suspended all further development activity and the talked about reserve based lending facility looks doubtful in this climate.  Contractors also need to be paid.  But financed, this still has potential and with a reasonable sized placing, PTAL could get going again.  It’s one to keep an eye on.

Pantheon Resources (PANR) continues to seek a farm in partner for its Alaskan projects.  It would like a meaningful up-front cash component as well as carried terms on future drilling.  I think that in the current environment this could take some time.  For the moment, they’re reducing their salaries by 20%.

Gulf Keystone Petroleum (GKP) announced full year results.  Cash at 22 April 2020 was $164 million.  Current market cap is £166 million.  Operations now have been reduced to focus on the minimum safety critical activities required for production, but once macro conditions improve, including resolution of outstanding payments from the KRG, Gulf will restart expansion activity to increase production to 55,000 barrels of oil per day.  It doesn’t look expensive.

Empyrean Energy (EME) announced an open offer at 3.5p.  There’s a sense of deja vu here.  I remember buying EME at 3.5p in 2017.  It looked like a no brainer then and so it turned out going to over 30p and delivering some of the best trading gains that year.  Now we’re back where we started, unfortunately I don’t get the same feeling again.

Red Emperor Resources (RMP) issued its quarterly activities and cashflow report.  They say they’ve continued to conduct due diligence on a number of potential projects,  but the current state of the global economy, and depressed oil prices, has made valuing companies and assets difficult.  With A$4.7 million cash and access to more, they’re now waiting to take advantage of any opportunistic deals as and when they become available.  It’s one that will get interesting again in the future.

Sound Energy (SOU) issued final results.  I’m only commenting on this now since it claims to have assets of £186 million.  It’s one that’s been continuously pumped for cash by certain people as a result of which large numbers of investors have lost hundreds of millions  of pounds.  It’s not a joke and I see some of the same people working Coro Energy (CORO) now.  Reality is that these two companies plus Echo Energy (ECHO) (all three under the same control) have significant debt of over £20 million each and possibly worthless assets.  The CORO auditors made reference to a material uncertainty in relation to going concern within their audit report last week.  So watch out.  I’ve been warning about these three all the way down.

Regardless of circumstances, the good companies will pull themselves back together and the bad companies will fail.  If you want to know how to spot the differences, I explain it all in the Special Trading Course.  Plus of course how to choose the ones that will deliver the large returns.  The link for that is https://www.oilnewslondon.com/trading 

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 

If you’re not yet familiar with me, I’ve been involved in the markets for quite a long time.  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.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors, which enables me to see very quickly whether or not these companies are telling the truth.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – BLOE AAOG ZEN BOR CLNR UJO RBD PRD TLOU BPC RPT CORO EME ECHO SOU NUOG AST HUR

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.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – RKH 88E PMO CHAR RRE PVR LOGP COPL NTOG ZEN AST BLOE

A short week, but plenty of interesting news.  Rockhopper Exploration (RKH) announced final results.  At 1 April this year, it had $21.9 million cash, having sold its Egypt assets, and is now focussed on the Sea Lion Falkland Island development.  Market capitalisation is £35 million; net assets per the balance sheet are $396 million.

88 Energy (88E) announced a large condensate discovery, unfortunately Premier Oil (PMO) viewed it as non-commercial and decided to exit.  That’s the oil business and prudent traders don’t hold for the end result.  I highlighted 88E as a favourite several times around 0.7p and it more than doubled to over 1.4p.  As I’ve always said, it’s critical to take profits, de-risk and never get greedy.

Chariot Oil & Gas (CHAR) issued a strategic update.  They now intend to focus on monetising near term potential of the Lixus licence and maximising value for investors by developing a Moroccan gas business.  Their 2019 year-end unaudited cash position was $9.6 million, with no debt and no remaining work programme commitments.  Market capitalisation is £7 million.

RockRose Energy (RRE) delivered a strong set of results.  At the year end, total cash was $375.5 million, of which $59.7 million was restricted.  Pro forma adjusted earnings before interest, tax, depreciation and amortisation was $162.4 million.  The Company’s current expectation is that in 2020 unit operating costs will fall to below $30 per barrel of oil equivalent.  With its heavy burden of upcoming decommissioning costs, RRE remains a highly geared play on oil and gas prices.

After the Chinese debacle which knocked the share price to the floor, Providence Resources (PVR) has now agreed non-binding and non-exclusive heads of terms with the Norwegian company, SpotOn Energy, in relation to the farm out of the Barryroe oil and gas field.  SpotOn has been given a period of exclusivity until 31 October 2020 during which time they will agree an appraisal work programme for the Barryroe field and develop commercial terms with the aim of concluding a binding farm out agreement.  As a sign of good faith, they put up £300,000 of a £2.7 million fundraising at 1.5p, which will fund PVR through to April 2021, Barryroe 20% partner, Lansdowne Oil & Gas (LOGP), already being funded through to the end of this year.  It’s a step forward, but very far from conclusive.

In contrast, Canadian Overseas Petroleum (COPL) appears to be taking a step back.  The joint venture company which owns OPL 226 is being sued by Essar Mauritius, who are claiming $63 million of damages in respect to amounts invested in the OPL 226 project.  Unfortunately for COPL, the claim has been filed in the High Court of Justice of England and Wales, where the judges are unlikely to be persuaded by the usual type of statements made by Mr. Millholland.  Could eventually be lights off here now.

Nostra Terra Oil & Gas (NTOG) had a busy week with four announcements.  Looks like Matt Lofgran is going to save his salary by taking 10.8% of the company for £80,000.  The latest placing has been done at just 0.25p per share, but none of that matters.  The value to those involved lies in virtually always being able to raise money just by lowering the share price at which that is done.  That’s the worth of a public listed company to those who control the board, its ability to raise cash and keep paying them, and that’s why people fight to get control of these things.

To keep us all further amused, Zenith Energy (ZEN) announced a quick £525,000 placing at 0.7p, while waiting for the 2.5p “premium placing.”  This company appears to raise money almost every single week, but what actually happens to all the cash?  I suspect this will all end in tears.

Ascent Resources (AST) says that the defaulting placee has agreed to pay up.  Guess they must now have been promised that those in charge can ramp them out of it.  To that end the receipt of a letter of intent for litigation funding was announced.  It doesn’t amount to anything at all, in fact it’s barely worthy of a RNS and could even be said to be misleading, but at least it gives those who promote these things at the bottom end of the market something to talk about and try to get the dissatisfied 5p placees out.  Hasn’t worked yet though.  All involved here are tired and starting to look like they’re past it now.

Block Energy (BLOE) is mothballing West Rustavi.  The whole thing is, and always has been, completely unviable.  I’ve been calling this one out as a scam for a year now and, despite personal attacks plus threats from people connected to the company, I’ve continued to state my views firmly.  Following yesterday’s announcement, I suspect Block will just fade away now.  Interestingly, shareholder Georgia Oil & Gas (of the British Virgin Islands) was selling before this announcement, just as it has done immediately before previous bad news.  It’s now trading around 10% of last year’s placing price.

As regular readers and listeners know, I also write a private blog available by subscription, which focusses on my actual trade ideas.  Details of that can be found at https://www.oilnewslondon.com/oilman-jim  In addition, I’ve now compiled a trading course, which vastly expands on some of the principles I expound in the blogs and podcasts and provides information that most will never have heard before.

There are many books and courses on investing and trading, but hardly any that address the actual peculiarities of the speculative small cap markets.  The few that do exist deal with the North American markets, which operate in quite different ways to the UK.  What does exist is quite useless for AIM and the London small cap market.

Investment techniques which are suitable for main markets and large companies are not appropriate to AIM and most of those that try to apply them lose, and often a lot.  It’s a completely different game.  There’s virtually no genuinely beneficial information out there about trading AIM and small cap companies.  Hence I decided to write this course.

I cover everything you won’t read elsewhere, particularly subjects which others either don’t understand, or even know about, or even if they do, are unwilling to talk about openly.  I set out exactly how it all works in detail.  Exactly how the insiders make their profits.  And how you can profit too.  I explain all the things that no one else can or will and all the secrets the insiders don’t want you to know.  Lots of money can be made if you know how it all actually works, and what goes on behind the scenes may be completely different to what you think.  The course will be of great benefit to all trading the AIM and small cap markets, not just oil stocks.  I believe most will find it eye-opening.

I’ve been involved in the markets for a long time.  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.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors.

Small cap speculative companies exist to enrich their insiders, not their public investors, and everything those involved do is for their benefit, not yours.  The vast majority lose with these companies, but some do profit and you can be one of those too.  The link is https://www.oilnewslondon.com/trading 

Contact me on Twitter @Oilman_Jim 

Click “SUBSCRIBE” to receive these blog posts by email 

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.

Weekly oil news round up by Oilman Jim – I3E PET BPC NOG TLW JKX LEK UKOG UOG UJO EDR EOG TLOU CORO ECHO SOU ZEN TRP PRD CERP ECO CASP PTR EME NTOG MSMN AAOG 88E PMO

I know it can all look gloomy, but actually it’s not.  The number one on the private blog list rose over 100% in 8 trading days.  It all just depends upon which shares you’re in.  On to the news, and it’s been a busy week.  I3 Energy (I3E) entered into an option agreement to acquire Toscana, a Canadian company producing around 1,000 barrels of oil equivalent per day.  They say that the average breakeven price is $21.74 per barrel of oil equivalent, but what they don’t disclose is that this oil sells for well below US prices.  It’s a dog of a deal and I3E now has squandered its cash buying Toscana’s defaulted debt, while it’s own debt remains outstanding. 

Petrel Resources (PET) updated on its projects.  Good progress now appears to be being made with the issue of its Tamo 2A licence in Ghana.  I highlighted Petrel Resources as a favourite several times in the blog last year around 1p and it’s now 6p, having been as high as 26p.  More companies with this potential in the private blog at https://www.oilnewslondon.com/oilman-jim  

The issue of convertible loan notes by the Bahamas Petroleum Company (BPC) board isn’t looking too clever now.  Last conversion was at 1.28p.  Yet the board was refusing finance at 2p + recently, when it got greedy again, as it does.  I did warn about this.

Nostrum Oil & Gas (NOG) is finding itself in a difficult situation too.  Per its announcement this week, they recognise the precarious liquidity position of the company and will therefore look to engage with their bondholders.  They’ve also got a 272 million barrel of oil equivalent reserve downgrade, which will lead to a significant impairment being taken when they release their full year results.

Tullow Oil (TLW) reported that “strengthening the balance sheet continues to be a key priority with the Group seeking to raise proceeds in excess of $1 billion through portfolio management.”  Things aren’t necessarily too bad here: “operating costs remain less than $12/bbl, with Ghana operating costs at c.$9/bbl.”  

JKX Oil & Gas (JKX) was not so informative.  It reported its 2019 financial results, but they’re academic now and unfortunately when it came to the outlook for 2020, rather than providing any hard information, they chose just to waffle.

Lekoil (LEK) meanwhile confirmed that the payment of $2 million in respect of OPL 310 has been received by the operator Optimum.  LEK now is pursuing cost reduction measures, targeting an annual reduction of $8 million or at least 40% in G&A costs, which is inclusive of a reduction in staff numbers and these measures will be completed within the next four to six weeks.  Just shows really how bloated most of these small public companies are.

UK Oil & Gas (UKOG) issued financial results.  Cost reductions should enable Horse Hill to break even at low Brent prices, but I’m not sure how appropriate the £310,000 bonus for Stephen Sanderson is in the current environment.  Tellurian have been issued with a further 255 million shares in respect of the final payment for their Horse Hill interest, another 47 million shares also were issued last week in relation to a loan note conversion, with a further £2.4 million worth still to be converted.  None of this helps the share price and the CEO now appears to be more focussed on his personal remuneration unfortunately.

United Oil & Gas (UOG) announced an operational and corporate update.  They say that “low operating costs at Abu Sennan of around $6.5/bbl provide solid operating margins even at low price levels.”  They’re going to be prudent and are “stepping away” “where licences offer a more uncertain or marginal return.”

Union Jack Oil (UJO) and Egdon Resources (EDR) confirmed their Biscathorpe development offers commercial upside with break-even full-cycle economics estimated to be $18.07 per barrel of oil.  Meanwhile, Europa Oil & Gas (EOG), also active onshore UK, has completed a comprehensive review and cost reduction programme and their existing cash reserves are expected to be sufficient to finance current and upcoming activity without the need for additional external funding.  This of course is going to be rather harder now for small companies without a really exciting story.

Another in a similar category, Tlou Energy (TLOU), announced that an interim 2MW CBM Pilot Power Purchase Agreement has been agreed with the Botswana Power Corporation.  They just need to produce some gas and generate some electricity to sell to them now.

Coro Energy (CORO) is more or less throwing in the towel.  Whatever Parsons, Fumagalli and MacAulay do, it fails, so this approach makes sense from their point of view.  Why waste the companies money on oil and gas projects when it can be used for their fees and expenses?  Fortunately, there’s sufficient cash left to keep them all in comfort for a year or two.  It’s best not to end up like their other company Echo Energy (ECHO) whose announcement last week made clear that it now is unable to pay its debts as they fall due.

Meanwhile, yet another of their companies, Sound Energy (SOU) issued an announcement of pure waffle regarding a still uncompleted gas sales agreement.  In the same category, Zenith Energy (ZEN) announced a letter of intent for a “premium placing” at 2.5p.  For those who want to fully understand these things (and learn how actually to profit from small caps) these type of tricks (and all the others) are explained in the Special Trading Course.  Link for that is: https://www.oilnewslondon.com/trading

Tower Resources (TRP) finds itself delayed by the Coronavirus.  They’ve notified the Ministry of a force majeure event to obtain more time, but overall the situation doesn’t sound great.  It’s a project that’s at the margin and I wouldn’t be too confident that it will proceed.  Directors took 0.2p warrants in lieu of fees, though, but why not, since it’s better than nothing.

The Predator Oil & Gas (PRD) Morocco drill isn’t happening either.  Usual Coronavirus excuses and they’re now talking about using the funds for acquisitions.  In the meantime, they confirmed that the Trinidad project economics (in partnership with Columbus Energy Resources (CERP)) are still attractive even at West Texas Intermediate $20 a barrel.

Eco (Atlantic) Oil & Gas (ECO) issued a market update.  Usual COVID-19 stuff, but importantly the Board and management are taking pay cuts of up to 40% and with all work commitments for 2020 under the various petroleum agreements offshore Guyana and Namibia met, only minimal costs are expected to be incurred over the remainder of the year.  As at 31 March 2020, the company has cash of $18.8 million and zero debt, remaining fully funded for its share of further appraisal and exploration drilling offshore Guyana up to $120 million (gross).  It will start to look quite interesting if it drifts off under 10p.

Caspian Sunrise (CASP) announced the successful perforation of New Well 150, which is flowing at the rate of approximately 500 barrels of oil per day using a 7 mm choke.  The infill drilling programme now is being suspended, as will work on the deep wells in a few weeks time.  It’s a company that has its followers, but now perhaps is the wrong time.  PetroNeft Resources (PTR) also has made progress, announcing the completion of a 26 kilometre pipeline allowing year round production from their Licence 61.  

Finances are getting tight for Empyrean Energy (EME).  It currently has sufficient working capital to the end of April 2020, but will need additional funding to enable it to satisfy its share of final costs in relation to the drilling of the Tambak wells last year and to provide sufficient working capital beyond that date. The board is currently reviewing a number of funding alternatives, including (but not limited to) drawing a portion of the Longstate Facility, an equity placement or undertaking an Open Offer to existing shareholders.  Doesn’t sound like one to buy now either.

Meanwhile, the boardroom row at Nostra Terra Oil & Gas (NTOG) has flared back up and a new requisition to convene a general meeting has been received with a new resolution to remove Matt Lofgran as a director of the company. All quite pointless really since the assets now must be more or less worthless and no matter how bad Lofgran may be, I don’t see who they’ve got to propose that’s any better.  It’s all really about someone else trying to nick his £250,000 a year salary.  They’ll never be anything in it for the shareholders here.  Same applies to Mosman Oil & Gas (MSMN), which reported a loss from ordinary activities of $4.3 million.  It’s an equally pointless company that exists only to profit its directors and connected parties, but it still looks like a “blue chip” compared to Anglo African Oil & Gas (AAOG) which now is being financed on the drip by its new control party, Forum Energy Services, who advanced them £50,000 to pay its most pressing debts.  Chair, Sarah Cope also finds herself in the novel position of owning shares now, 100 of them (a full 20p’s worth) to enable a quorum at the upcoming general meeting.  Such confidence in a company from which the directors took £395,000 for themselves in the last reported 6 months.

Back to more viable companies, 88 Energy (88E) issued an operations update.  Total depth of 11,112 feet now has been reached in the Kuparuk Formation and logging while drilling results were largely consistent with Malguk-1.  Wireline logging now is underway and is expected to take around seven days.  Premier Oil (PMO) is the majority partner in this venture.  Results this coming week.

Remember, normal fundamental and technical analysis doesn’t work on AIM.  Critical with these small caps which constantly require funding is to understand how the finance and promotion side works.  That’s why I know what’s going on at these companies and where they’re likely to go.  I’ve 40 years experience in the markets from both sides of the fence.

My personal trading philosophy is based upon conviction, elimination of possible loss making trades and only going for those which are certainties.  It takes discipline, but it maximises profits, which is what this is all about.  I write two blogs.  The main blog (and associated podcast) focusses on the news. The private blog focusses on the trades.  Writing it all down and publishing it requires focus and accuracy, since I’m open to criticism if I don’t get it right.  Writing the main blog ensures staying on top of and correctly assessing all the oil and gas public company news each week.  Writing the private blog and sharing my thoughts ensures careful and accurate analysis of the trading ideas.  The link for that is https://www.oilnewslondon.com/oilman-jim 

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – RRE HUR GKP BPC LEK PVR UKOG PMG MATD BLOE PANR TLOU ECHO AAOG AST ZEN

Another interesting week:

RockRose Energy (RRE) issued an operations update.  Cash at close of business on 25 March 2020 was £287 million, of which £248 million was unrestricted.  They anticipate unit operating costs of around $30 per barrel of oil equivalent in 2020 and at least $50 million capital expenditure will be deferred.  Current market capitalisation is £85 million.

Hurricane Energy (HUR) reconfirmed that it has a strong balance sheet, including $164.3 million of unrestricted cash at 18 March 2020 and is in a strong position to weather this current downturn.  However, it warned that should this change in the market environment persist, it is likely to have a material impact on their capacity to fund capital expenditure.  A further concern was the announcement on Friday that a crew member on the floating production storage and offloading vessel at the Lancaster field had been evacuated to the mainland for medical reasons and subsequently tested positive for COVID-19.  Their current market capitalisation is £213 million.

Gulf Keystone Petroleum (GKP) announced an operational and corporate update, confirming that “at current production levels, the Company covers all operating, general and administrative costs and interest payments with a Brent price of around $35 per barrel.”  Production currently is around 38,000 barrels of oil per day and the balance sheet is strong with cash of $154 million at 23 March and no debt repayment until mid-2023.  Current market capitalisation is £135 million.

Bahamas Petroleum Company (BPC) has delayed drilling again.  Reality is it doesn’t have the cash and little chance of obtaining it via the convertible loan note route.  To save the day, since its licences expire at the end of the year, it’s claiming that the Coronavirus constitutes a “force majeure” event under the terms of the licences and has notified the Government of The Bahamas of such.  They say it is expected to result in a corresponding extension to the term of the licences.  Whatever the outcome, though, I don’t think there’s going to be a drill this year.

Lekoil (LEK) issued a slightly curious announcement that they’re “in the process of making the agreed payment of $2 million for OPL 310 in accordance with the agreement reached and announced by the Company on 21 January 2020.”  They say they’ve “given instructions for the payment to be made by [their] bank and will provide a further update when this process is completed.”  The wording here reminds me a little of Providence Resources (PVR) and their China payment. 

UK Oil & Gas (UKOG) announced that it has filed a planning application with the Isle of Wight Council for the appraisal drilling and flow testing of the Arreton oil discovery, which is a geological analogue of the Horse Hill oil field, containing calculated aggregate gross P50 oil in place of 127 million barrels.  It makes for an interesting addition.

The Parkmead Group (PMG) announced interim results.  “Gas prices have fallen from highs of approximately 25.70 Euro per megawatt hour in October 2018 to lows not seen in over a decade of around 8.60 Euro per megawatt hour in February 2020 due to the oversupply of liquefied natural gas into the European market.”  They’ve moved from an operating profit in the 6 months ended 31 December 2018 of nearly £4 million to an operating loss of £1.5 million in the 6 months ended 31 December 2019.  Let’s now see if they can make the money back from wind power on the piece of land in Scotland they bought from the Chairman’s wife.

Petro Matad (MATD) announced an operational update.  They’re progressing the Block XX exploitation licence application and a new CPR increases the total mean un-risked in-place oil resource potential of the Heron structure by 20% to 194 million barrels.  Reservoir stimulation studies indicate significant improvements in the recovery factor are possible and the Heron development base case has increased to 33 million barrels recoverable.  Challenge is whether they will actually be able to get any further work done this year with the current Coronavirus situation.

Block Energy (BLOE) acquired two blocks in Georgia from Schlumberger for no cash.  Reality with this deal is that Schlumberger have successfully binned what they, as experts in such matters, regard as liabilities.  BLOE have got the same social media pumpers on it as last time, so perhaps brace for another placing from this one, although perhaps not, since with the credibility of both the company and the pumpers shot after last year’s false production number claims, the initial ramp appears to have failed miserably.

Pantheon Resources (PANR) announced upgraded resource estimates: the shallowest horizon now is estimated to contain 1.8 billion barrels of oil in place and a P50 technically recoverable resource of 483 million barrels of oil.  They’re impressive numbers, but will they be able to achieve a farm-out is now the question.

Tlou Energy (TLOU) issued a response to prevailing financial market conditions.  Main point is that directors are reducing their salaries by 50%.  No such luck for shareholders at Echo Energy (ECHO).  They’re just “asking the holders of its debts to defer all cash interest payments during 2020.”

There were other announcements from “old favourites” Anglo African Oil & Gas (AAOG), Ascent Resources (AST) and Zenith Energy (ZEN) too, but I’m not sure that, other than the comedy aspect, there’s that much interest anymore in what are openly non-viable companies.

What there is interest in is the new Special Trading Course and I’d suggest that you at least read the details about it at https://www.oilnewslondon.com/trading  I’m confident it will be of significant benefit to you.  If you’re here because you’re interested in making money, the trading course is for you: it’s all about eliminating losses and going for the certainties which make you the profits.  In the context of the amount people risk (and regularly lose), it’s not at all expensive, a bargain in fact to learn all the things I know and profit yourself from that knowledge.  Link again is https://www.oilnewslondon.com/trading 

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – 88E PANR JOG RKH CASP GKP JSE HUR BPC I3E EDR EOG UJO ANGS ECHO NUOG SOU AAOG ZEN

Interesting times.  Many say there should be a lockdown and some even think the markets should close.  A lockdown is a virtual certainty now and the Coronavirus is going to change society’s priorities massively.  The stock market will keep going, though, just as it did all the way through World War II, and the game there will remain the same, as it has through all the changes over the last few hundred years.  Just with a larger audience now, since in future most people will be in front of the computer working (or not) from home.

Moving on to the oil and gas company news:

88 Energy (88E) announced drilling of the production hole is to commence imminently.  They say that “results from the logging while drilling phase of the program are expected to be announced after total depth has been reached and initial analyses have been completed, scheduled for early April.”  88E was a particularly strong performer on Friday rising 25% to 0.75p.  Perhaps sensing the tone, Pantheon Resources (PANR) now have strategically refocussed with Alaska as their primary asset and are looking for a farm out.

Jersey Oil & Gas (JOG) announced it is evaluating with neighbouring field operators a collaborative development of the wider Greater Buchan Area, which contains discovered oil and gas resources in excess of 200 million barrels of oil equivalent.  It’s a sensible scheme, endorsed by the Oil & Gas Authority, and JOG has sufficient working capital to keep going through to the end of 2021.

Rockhopper Exploration (RKH) outlined the impact of the Coronavirus on its operations.  In fact, none, and it appears the announcement was really just an excuse to mention that their cash balance is greater than their market capitalisation.

Caspian Sunrise (CASP) decided to suspend all new drilling activities and the Board will defer a significant portion of its salary payments to help bring ongoing costs into line with the income receivable at the reduced world and domestic prices.  New wells obviously are uneconomic, even for this low cost producer.

Gulf Keystone Petroleum (GKP) has decided that in view of the impact of Coronavirus on operations, it is “prudent to suspend drilling and certain production facility expansion operations during this time.”  Fortunately, they should be capable of riding out the storm with a cash balance of $159 million as at 13 March 2020.  Jadestone Energy (JSE) also announced the delaying of their Southwest Vietnam gas development.

Hurricane Energy (HUR) announced final results and stated that at their “guided production rate of 18,000 barrels of oil per day (which includes a 90% uptime assumption) cash operating costs are expected to be approximately $17 per barrel.”  They also pointed out that they had “$164.3 million of unrestricted cash as at 18 March 2020.”  

Bahamas Petroleum Company (BPC) announced an expansion of the death spiral financing, but it’s all theoretical, since after an initial small ramp, it went under 2p, the lower limit for conversion.  Eventually the board is going to have to face reality here and do a large, heavily discounted placing.  What the investor appetite may be for that though at the current oil price is another matter entirely.  But the hard fact is that if they don’t drill this year, they lose the licence and perhaps it’s time for them to stop playing games.

I3 Energy (I3E) announced a drilling contract with Dolphin Drilling to commence not later than 1 September 2020 or as otherwise agreed between the parties.  The contract is conditional on I3E confirming availability of funds 90 days prior to drilling commencement.  The minimum programme for the appraisal drilling consists of two appraisal wells on Serenity plus a sidetrack on each well, contingent on drilling outcomes, at a total expected gross cost of approximately $33 million.  They estimate 197 million barrels P50 oil initially in place for Serenity which, as a stand-alone development, demonstrates an after-tax NPV10 break-even at $20 per barrel Brent pricing.

Egdon Resources (EDR), Europa Oil & Gas (EOG) and Union Jack Oil (UJO) all announced that their Wressle development project has an estimated break-even oil price of $17.62 per barrel.  UJO also re-confirmed that “with in excess of £6.2 million in cash and no debt, Union Jack is funded for all testing and drilling commitments for 2020.”

Angus Energy (ANGS) meanwhile is trying to make a positive out of the recommendation by the Planning Officer to decline the Balcombe Oil Field Planning Application by claiming it will reduce cash outflow during calendar 2020 due to forecast capital expenditures at the site.  If Balcombe is uneconomic, as it may well be, then the recommendation actually is a hidden bonus for them.

Echo Energy (ECHO) admitted that their Santa Cruz Sur assets are not currently cash flow positive and existing cash resources are not sufficient to sustain operations.  I’ve been warning about this one all the way down from 17p and ECHO would have come back to where it is now anyway, regardless of the oil price.  The giveaway here right at the start was the initial share structure.  It’s only ever been a stock promote.

Nu-Oil & Gas (NUOG) announced that it’s now willing to take on any business that might give the directors an excuse to raise money and keep paying their salaries.  Like ECHO had, they’ve also got a lot of stock to shift privately.  NUOG halved on the news and I’m not sure whether these type of games are still going to work in the current market.  Times are starting to look hard for this crowd, since those left at Sound Energy (SOU) have now managed to ensure that Parsons and Mitchener can no longer clear out whatever little will be left of the company’s cash.  I guess they want it to pay their own salaries.  Are there really still investors left who are willing to finance these absurdities?

Reality is most of these companies are flawed and would eventually have gone to zero anyway.  Let’s face it, what relevance does the oil price have to the success or failure of companies from Anglo African Oil & Gas (AAOG) to Zenith Energy (ZEN).  Failure was factored in right from the start and I’m sure the directors are greatly relieved that the oil price has collapsed giving them a credible excuse for that failure now.

Away from all this sort of nonsense, which only exists due to the special circumstances which I explain in the trading course, there actually are some excellent opportunities out there now and they’re highlighted in the private blog.  The market never stops and I’ve seen all this before.

Links for the private blog are https://www.oilnewslondon.com/oilman-jim and for the special trading course https://www.oilnewslondon.com/trading

“Don’t throw darts at a board, bet on sure things.”

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – RRE JSE TRIN CASP TLW PMO RBD EOG MSMN AST TXP UKOG PTAL BPC BOIL TRP SOLO EDR UJO 88E LBE CLNR IOG

It’s been a busy week.  The oil price dropped into the $30s, which prompted a number of company announcements, some credible, some not.  The worst of them also took the opportunity to blame their misfortunes on the Corona-virus.

Starting off, RockRose Energy (RRE) was hammered on Monday, “closing the gap” from its last pre-suspension price.  On Tuesday, it confirmed it was “debt-free with net cash of £272.1 million (equivalent to £20.75 per share),” more than double the current share price.  Jadestone Energy (JSE) confirmed “the business is resilient and expected to generate positive operating cashflow in 2020, even at oil prices below $30 a barrel.”  In similar vein, Trinity Exploration & Production (TRIN) confirmed their “operating break-even has consistently been below $30 a barrel in all periods since the new management’s measures took effect in 2016.”

Caspian Sunrise (CASP) knows all about low oil prices.  Although restrictions have relaxed somewhat of late, it’s used to having to sell most of its production at a special domestic price per barrel, currently $17.82.  An export price in the $30s still looks good by comparison to a long time low cost producer.  The current oil price certainly doesn’t look good for Tullow Oil (TLW), though, whose final results disclosed a free cash flow breakeven of around $45 a barrel.  Its shares have collapsed from a high of over 250p last year to just 10p last week.  Premier Oil (PMO) has a similar problem.  Its cash flow breakeven price is stated to be “under $50” a barrel and this includes the benefits of the hedging programme.  Its shares also fell to 10p last week, having been over 120p just two months ago.

With its share price having collapsed from 1.7p last year to 0.3p last week, Reabold Resources (RBD) also jumped on the oil price/market volatility/Coronavirus RNS bandwagon.  No matter how much sand they throw in investors’ eyes, the issue really is will they even recover their investments in California and Romania?  Yet this “proven track record” of one of the RBD co-CEOs (£600,000 a year each for this pair) apparently “will prove invaluable” to Europa Oil & Gas (EOG), which nicely illustrates the alternative business reality which prevails in the AIM/small cap sector.  On that subject, Mosman Oil & Gas (MSMN) didn’t miss the opportunity either to blame in advance all the current events for its upcoming bad news.  I’ll add Ascent Resources (AST) to this group.  Now run by two failed AIM company directors, investors perhaps don’t think they’re going to be able to “perform” in this type of market and of the £800,000 supposedly raised, only £500,000 was actually paid over.  Hopefully, it will cover their salaries for a month or two.

There was a better quality announcement from Touchstone Exploration (TXP), who reported that the Cascadura well tests had delivered a combined average of over 10,600 barrels of oil equivalent per day.  Good news from UK Oil & Gas (UKOG) too, who announced both the flow of dry oil to the surface as a result of their water shut off programme and that Horse Hill has been granted long-term production consent.  This will enable net recoverable reserves to be allocated and also permit UKOG to enter into long-term field operations contracts which can help reduce operating costs below $19 per barrel, making the field more profitable even at current low oil prices.

South American producer/developer, PetroTal (PTAL) took a hammering.  It’s 2020 capital program is based upon $60 oil.  They issued news on Tuesday stating that “given the strong relationship PetroTal has with its key contractors, the Company has agreed to manage payments with a number of its contractors, allowing for ongoing operation of the contractors’ crews.”  In other words they don’t have the cash now to pay them.  Another one without enough cash, Bahamas Petroleum Company (BPC), announced the possible execution of a possible convertible loan note agreement deferred to 15 April, perhaps 15 May.  In the meantime, the possible CLN holders who were already granted options, exercised at 2p and, I guess, sold them for a nice profit.  Now, BPC is announcing well delay and blaming it on the Corona-virus.  The reality of course is they don’t have the funding to drill.  Let’s see how oil in the $30s works for these two.  I reckon we could be seeing placings by both of them soon.

Baron Oil (BOIL) announced the completion of its £2.5 million placing at 0.1p per share. The proceeds will be used to fund Baron’s share of the ongoing work programme in Timor-Leste, the drilling of the onshore El Barco-3x well in Peru, and to provide additional working capital.  Tower Resources (TRP) managed to get away a £500,000 placing at 0.375p just in the nick of time.  Now, lets see if the first farmee provides proof of funds this month and whether the second one signs up.  They may well do since Tower says it’s comfortable in the lower oil price environment and still believes that the Thali license can earn excellent returns.  Solo Oil (SOLO) announced the return of the ONE-Dyas deposit.  Now, they’re confident they have sufficient cash resources to meet current firm budgeted commitments within the existing portfolio of assets in Tanzania, and to cover general working capital needs for the remainder of 2020.

Egdon Resources (EDR) announced that the subsurface review of their eastern Humber Basin licences has identified a new low-risk near-field exploration opportunity, which can be targeted by drilling from the current Keddington location. This presents a number of low-risk/low-cost drilling opportunities.  Union Jack Oil (UJO) has an even larger interest than EDR in these now and announced it’s also expecting news during the remainder of Q1 and Q2 in respect of the extended well test at West Newton A-2 and the commencement of site works in preparation for the drilling of the West Newton B-1 well.  They also confirmed that they’re fully funded for drilling.  Meanwhile, 88 Energy (88E) confirmed the Charlie-1 surface hole is complete and they are commencing drilling the production hole.  Now we wait for the important announcements from the only company currently drilling a potentially transformational well.

Longboat Energy (LBE) announced a market update.  They believe that if the recent fall in the oil price is sustained, it will provide an increasing number of material and attractive opportunities.  They expect transaction valuations to decrease and thus potential returns to shareholders to grow significantly.  Cluff Natural Resources (CLNR) remains confident too.  It’s in a position of relative strength with £13.3 million cash and remains funded for its share of the Selene and Pensacola wells plus its working capital requirements through to the end of next year.  Independent Oil & Gas (IOG) also delivered reassurance.  Work on its Key Core Project Phase 1 is proceeding to plan and it is fully funded to cash flow from its proven gas resource base.

Now, if you feel you’ve had a bit of an awakening this past week or two with the sharp market moves, it might be time for my fact based trading course, which really will open your eyes.  It vastly expands on some of the principles I expound here and provides information that most will never have heard before.

I cover everything you won’t read elsewhere, particularly subjects which others either don’t understand, or even know about, or even if they do, are unwilling to talk about openly.  I set out exactly how it all works in detail.  Exactly how the insiders make their profits.  And how you can profit too.  Lots of money can be made if you know how it all actually works, and what goes on behind the scenes may be completely different to what you think.

I’ve been involved in the markets for a long time.  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.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors.

It’s not theory in this course, rather how it all actually works in the real world, keeping it practical and realistic, so that everyone can use the information for their own advantage regardless of the level of their trading or investment.

Small cap speculative companies exist to enrich their insiders, not their investors, and everything those involved do is for their benefit, not yours.  The vast majority lose with these companies, but for the whole scheme to work, some investors have to profit, and you can be one of those too.  The link is https://www.oilnewslondon.com/trading 

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – 88E PMO ANGS LEK SDX PRD PTAL SOLO NTOG ZEN AST TRP

The lower they go, the harder they bounce and there’s still good money to be made, even in (perhaps because of) such markets.  Just look at some of the movements between the previous Friday and last Wednesday.  For those using CFDs and spread bets, there were 100% gains possible even just with retail leverage.

On the news front, the usual mixture, but I sense that with the current conditions, companies are holding the good ones back and I expect to see more this coming week.

88 Energy (88E) announced that Charlie-1 appraisal well drilling has commenced.  They say they’re “optimistic that success is just around the corner.”  This is a credible drill since Premier Oil (PMO) has farmed in, and a big one targeting 1.6 billion barrels of oil with 480 million barrels net to 88E.  There are seven stacked targets and multiple oil and gas show announcements are highly likely.  I highlighted this as a favourite several times around 0.7p in the blog and it’s now 1.075p, having been nearly as high as 1.5p.

Among the less credible projects, Angus Energy (ANGS) announced a CPR for the Saltfleetby gas field, touting reserves of 16 billion cubic feet of gas which will, they claim, generate a total cash flow after costs of approximately £50 million.  I think it’s worth remembering that the party who “sold” them the Saltfleetby gas field viewed it as such “a gem of an asset” (as Angus describe it) that they paid them £2.5 million to take it off their hands.

Lekoil (LEK) announced the results of their internal investigation into the OPL 310 facility agreement.  All the directors are, of course, exonerated, although the company was the principal beneficiary of the fraud, seeing its share price rocket up on huge volume to 11p, allowing large shareholders to sell at higher prices.  Blame is placed upon the external advisors.  Regardless of the rights and wrongs here, though, LEK has some interesting news coming up and now down to 2.4p, it’s one to keep an eye on.

SDX Energy (SDX) announced that their play-opening BMK-1 well in Morocco encountered commercial quantities of gas in both target horizons.  The rig now moves to drill the potentially play-opening LMS-2 well.  Predator Oil & Gas (PRD) also announced approval of the environmental impact assessment for their upcoming Morocco well.  The shares are well under their 4p placing price with large numbers to be flipped and it’s amusing to see the CEO already starting to talk about someone acquiring the company.  It’s worth bearing in mind, though, that PRD will be covered to convert the outstanding convertible loan into shares down to 1.5p.

One thing this correction has done is inject a much needed dose of reality into the oil and gas small cap market.  For those who are puzzled about some of the larger falls in the share prices of what they consider to be “good companies,” there usually are good reasons for these.  For example, PetroTal (PTAL), which I frequently get asked about, where what I think many perhaps do not realise yet is that the company’s 2020 capital program only is fully funded on the basis of a Brent oil price over $60 per barrel.  The same oil price issue applies to many other companies’ projects too.

Back to the news, Solo Oil (SOLO) announced a transaction update and restoration of trading.  The transaction with ONE-Dyas has fallen through and they’re now looking to sell their Tanzania assets to pursue acquisitions within the European gas market.  They’re currently in discussions with several separate vendors.  At 0.95p and a £6 million market cap, there could be potential.

Nostra Terra Oil & Gas (NTOG) and Zenith Energy (ZEN) issued their announcements.  The NTOG board room drama has been brought to a close with Andy Morrison becoming Chairman and Ewen Ainsworth stepping down.  It doesn’t change the nature of the extremely poor assets one little bit though and losses for shareholders plus high salaries for directors will continue as normal.  Any new deal the new directors bring in will just require even more funding.  In the meantime, ZEN has lost its “flagship” Azerbaijan licence and they’re trying to compensate with talk about a possible acquisition in Tunisia.  In the meantime, all I can do is suggest that bondholders and shareholders take time to check out their latest accounts.  Reality of course is none of them will do that, which is of course why they all continually lose money.  I’ve been calling NTOG and ZEN down for some considerable time and, within just the last year, both of their share prices have collapsed by around 80%.  Remarkably, these and other similar companies continue to have their fans, the question of course is are they just stupid – or compensated?  Meanwhile, the ex-Nostra Terra Ewen Ainsworth stepped up, along with the ex-Sound Energy James Parsons, as new directors of Ascent Resources (AST), both having passed the “necessary regulatory due diligence” checks, however low they may be.  The merry-go-round of failed AIM company directors continues to turn.

On a brighter note, Tower Resources (TRP) announced a Cameroon farm-out update.  Half the well costs are now covered and other half is under discussion, with the company confident.  Let’s see if the private company they’ve farmed-out to has the money though.  They’ve got until the 29th of this month to prove it.

As regular readers and listeners will know, I also write a private blog available by subscription, which focusses on my actual trade ideas.  Details of that can be found at https://www.oilnewslondon.com/oilman-jim  In addition, I’ve now compiled a trading course, which vastly expands on some of the principles I expound here and provides information that most will never have heard before.    

There are many books and courses on investing and trading, but hardly any that address the actual peculiarities of the speculative small cap markets.  The few that do exist deal with the North American markets, which operate in quite different ways to the UK.  What does exist is quite useless for AIM and the London small cap market.  

Investment techniques which are suitable for main markets and large companies are not appropriate to AIM and most of those that try to apply them lose, and often a lot.  It’s a completely different game.  There’s virtually no genuinely beneficial information out there about trading AIM and small cap companies.  Hence I’ve decided to write this course.  

I’ll be covering everything you won’t read elsewhere, particularly subjects which others either don’t understand, or even know about, or even if they do, are unwilling to talk about openly.  I’ll set out exactly how it all works in detail.  Exactly how the insiders make their profits.  And how you can profit too.  I’ll explain all the things that no one else can or will and all the secrets the insiders don’t want you to know.  Lots of money can be made if you know how it all actually works, and what goes on behind the scenes may be completely different to what you think.  The course will be useful to all trading the AIM and small cap markets, not just oil stocks.  I believe most will find it eye-opening.

I’ve been involved in the markets for a long time.  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.  I’ve also had significant involvement in the oil and gas industry along the way, from drilling wells to negotiating farm-outs to majors.  

Small cap speculative companies exist to enrich their insiders, not their public investors, and everything those involved do is for their benefit, not yours.  The vast majority lose with these companies, but for the whole scheme to work, some have to profit and you can be one of those too.  The link is https://www.oilnewslondon.com/trading

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.

Weekly oil news round up by Oilman Jim – 88E PMO SOU INFA ZEN AAOG RBD UOG RKH PRD TLOU ECO PTAL AEX SOLO

Quite a week and a particularly savage one for those holding the poorer companies.  The most positive event was 88 Energy (88E) confirming rig mobilisation for the upcoming Charlie-1 appraisal well.  Spud now is imminent and drilling & logging are estimated to take around 30 days.  I highlighted this as a favourite several times around 0.7p and it’s now over 1p, having been nearly as high as 1.5p.  It’s a big drill targeting 1.6 billion barrels of oil and 480 million barrels net to 88E.  There are seven stacked targets and multiple oil and gas show announcements are highly likely.  It’s also a credible drill with Premier Oil (PMO) having farmed in.

On to the news from a few less credible ones (better ones will be along shortly), Sound Energy (SOU) announced the immediate appointment of Graham Lyon as Executive Chairman.  Mr. Lyon is a former Chairman of Infrastrata (INFA).  It will be interesting to see if he presides over a final collapse of the share price to the sub-penny fractional level.  I suspect he will.  In which case, fellow director, Brian Mitchener, who sold 2 million shares last week at just over 1.5p will be able to look back with satisfaction at the excellent price he achieved.  I saw SOU featured in someone’s bucket list last week, down over 80%.  It’s also in my list, down over 95%.  Thing is I said it was rubbish; the other guy said it was one of the best.  That’s the problem with supposedly independent commentators getting too close to the companies and failing to remain detached.

Moving on with the bad ones (it’s a sort of reverse bucket list where instead of saying buy them, I said the opposite), Zenith Energy (ZEN) announced it intends to drill in the Congo in April.  But that is dependent on so many things and in reality it’s not going to happen.  I’ve been warning about ZEN for some time and it’s down from 4.2p to 0.9p (79%) in the last few months alone.  That’s nothing compared to its Congo co-venturer, Anglo African Oil & Gas (AAOG) which is down from 11.7p to 0.21p (98%) over the last year.  In fact, I’ve been saying it’s a con since around 20p.  It never stops with them, though.  AAOG’s own news last week revealed that RiverFort et al effectively received a present from the other AAOG shareholders of £336,926 in the form of the ISA.

I sometimes wonder why some people criticise me so heavily for warning about these scam companies.  What’s most fascinating is how those who are being scammed speak up and defend those who are scamming them.  A social media version of Stockholm syndrome perhaps.  The ones who attack me hardest, though, generally are those stuck with stock in placings that they’re trying to flip and are furious with me speaking out the facts about their companies.  I find it particularly amusing when they refer to their co-conspirators as “other respected posters.”

The two companies which present the most trouble to comment upon are Reabold Resources (RBD) and United Oil & Gas (UOG).  But the reality with these two is in their share price performances.  RBD is down from 1.7p to 0.57p (66%) in the last six months and UOG is down from 6.25p to 2.65p (58%) over the past two years.  Their business models simply aren’t the best and there’s no getting away from that.  In the last week, RBD announced an update on California operations.  The number that’s missing from their RNS is current oil production. There’s a heavy decline rate on these California wells, that they prefer to avoid to mention.  Meanwhile, UOG announced the completion of its acquisition and re-admission to AIM.  114.5 million shares are being issued to Rockhopper Exploration (RKH), 150.6 million shares are being issued to placees, plus 8.4 million to subscribers, all at 3p.  With that lot, it’s difficult to see the UOG share price doing anything positive for some time.  RKH meanwhile has the extra funds to get on with its much more exciting North Falkland Basin development.

Predator Resources (PRD) is down from 12.65p to 3.45p (73%) over the last year.  PRD announced a drilling team update last week; they also announced the exercise of the rig option the previous week.  What they didn’t announce was the publication of their CPR.  I don’t think that any company grounded in reality can seriously expect potential investors to be checking their website daily, so the question is why.  There’s still a lot of 4p placing stock out there to be flipped and shifty looking behaviour by the company is never a good sign.

Tlou Energy (TLOU) is down from 10.35p to 2.6p (75%) in the last year.  TLOU last week reported that dewatering is taking longer than originally anticipated.  I thought it might.  Sustained higher gas rates will take more time and/or require more wells.  They’re now talking about including solar, but are the management here really the most competent people to undertake all this?

On to the ugly as opposed to the bad, Eco (Atlantic) Oil & Gas (ECO) announced unaudited results and a corporate update.  It appears there will be no drilling on the Guyana block this year, indeed perhaps never.  ECO is down from 194.5p to 24.5p (87%) in the last six months, since it wasn’t entirely truthful about the nature of the oil it had encountered.  If the majority partners do somehow agree to drill, though, there could be significant upside.   ECO was a blog favourite that gained more than 100% last year, but then collapsed when it turned out that their oil was heavy.  Fortunately, I warned that the upward share price movement had run out of steam before that collapse happened.  It just shows how these type of companies are more for trading than investing.

The shine is now starting to come off PetroTal (PTAL) which is down from 32.5p a month or so ago to 18.25p (44%), having been as low as 16p (down over 50%) last Friday.  There were some fairly unpleasant exchanges over that one last weekend, but yet again it’s turning out that I was right.  PTAL announced the publication of a presentation on Thursday and the 20,000 barrels of oil per day year end target, far from being a virtual certainty, now is something to which there only is “a clear line of sight.”  Hitting such a target, of course, is another matter entirely.

On the brighter side, Aminex (AEX) pushes forward in Tanzania, so that when approvals are given, they can quickly move into the operational phase.  This also is positive for Solo Oil (SOLO), whose shares currently are suspended although the company hopes to be able to shortly provide an update on its proposed reverse takeover transaction.  Whilst the form in which SOLO will emerge from suspension is as yet unknown, there’s significant potential with AEX if it can pull it off.

The preceding commentary relates only to companies which issued news during the week.  Surveying the carnage, there are many other interesting possibilities.  Most of these companies of course are worthless and last week simply accelerated their inevitable declines, but such times present great opportunities and I’ll be reviewing the good ones in the private blog.  It’s at times like these that the big money is made.  

Fundamental analysis isn’t primary here (indeed, I see huge losses being made by those who try to apply it to AIM oil and gas companies); critical with these small caps which constantly require funding is to understand how the finance and promotion side works.  That’s why I know what’s going on at these companies and where they’re likely to go.  I’ve 40 years experience in the markets from both sides of the fence.

My personal trading philosophy is based upon conviction, elimination of possible loss making trades and only going for those which are certainties.  It takes discipline, but it maximises profits, which is what this is all about.  I write two blogs.  The main blog (and associated podcast) focusses on the news.  The private blog focusses on the trades.  Writing it all down and publishing it is an excellent discipline, requiring focus and accuracy, since I’m open to criticism if I don’t get it right.  Writing the main blog ensures staying on top of and correctly assessing all the oil and gas public company news each week.  Writing the private blog and sharing my thoughts ensures careful and accurate analysis of the trading ideas.  The main blog is free.  The private blog costs £95 a month.  Some question the cost, but what I can say is that of those who try the £23.75 first month’s trial subscription, the vast majority see the value of it and continue at the full monthly rate.  The link is https://www.oilnewslondon.com/subscribe

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

The author holds 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.

Weekly oil news round up by Oilman Jim – LOGP PVR PRD PTAL BLOE RBD ZEN UKOG SOU ECHO AST TRP UJO TXP COPL ECO UOG RKH BPC

Another busy week.  Lansdowne Oil & Gas (LOGP) announced its placing: £488,000 at 0.6p to keep the company going until the end of the year.  Now, their target is to complete a farm-out deal within the next six months.  LOGP is trading at a valuation of 8 cents per contingent resource barrel, so there’s scope for a significant re-rating if the farm-out comes about.  Same for its Barryroe partner Providence Resources (PVR) too.

Following its placing the previous week, Predator Oil & Gas (PRD) announced the exercise of its rig option with mobilisation to occur between 15 March and 30 April.  From posts on social media, there’s plenty of placing stock still to be flipped.  The next important announcement here will be the publication of the CPR, which will allow their project to be properly assessed.

PetroTal (PTAL) issued an oil reserves and operational update.  I mentioned declines and a promotion out of Zug and encountered quite a reaction.  It’s always interesting to float a thought on Twitter to test the response and, in particular, see how broker, promoter and company connected accounts respond.  An overreaction usually indicates you’re correct, otherwise they’d just ignore it, particularly when they’re also saying that all your followers are fake and nobody reads what you write anyway.  Some of them who’ve given trouble previously over my comments on companies such as Block Energy (BLOE) and Reabold Resources (RBD) (both of which are down in price very significantly since) were complaining that they were blocked.  I actually block very few people, only around 20 since I first started posting on Twitter in 2013, and very few of them are genuine investors.  I’m happy to have a normal discussion with anyone about anything, but if someone starts posting insults and childish pictures, then sorry, but I’m going to block them, as anyone else would.  More on PTAL and its promotion as it all unfolds.

UK Oil & Gas (UKOG) announced a loan balance reduction to £3 million (so the convertible loan note shares continue to gradually be distributed) and and also reported commencement of the HH-2z water shut off intervention.  Resumption of extended well test operations is planned to follow directly after.  As I’ve said before, where UKOG goes price wise now is down to power of news and new buying verses the level of convertible loan note share sales.

Sound Energy (SOU) announced that the anonymous UK private company, which was previously stated to be the purchaser of their assets, doesn’t have the funds.  No surprises there.  I said in November last year that their “sale” announcement then had been drafted to make people think the sale of the Morocco assets was a certainty in order to help associated parties sell their shares.  Sound is now around just 3% of the price it was when I first started warning about it.  Now CEO, James Parsons, who managed to destroy investors’ capital in Echo Energy (ECHO) too, is off to rescue Ascent Resources (AST).  Per the recent RNS, the “rescue” starts by wiping out the equity of existing shareholders.

Some people ask whether I short these companies.  Actually I don’t and next time there’s a quiet news week I’ll explain why.  My focus is on certainties, companies which I’m certain will perform on the upside.  Finding them involves reviewing all companies, good and bad, and I post my comments on the lot.  I’m only negative on companies because I don’t think they’re very good.  I have no financial interest in their outcomes.  I write two blogs.  The main blog (and associated podcast) focusses on the news. The private blog focusses on the trades.  Writing it all down and publishing it is a good discipline, requiring focus and accuracy, since I’m open to criticism if I don’t get it right.  Writing the main blog ensures staying on top of and correctly assessing all the oil and gas public company news each week.  Writing the private blog and sharing my thoughts ensures careful and accurate analysis of the trading ideas.  The main blog is free.  The private blog costs £95 a month.  Some question the cost, but what I can say is that of those who try the £23.75 first month’s trial subscription, the vast majority see the value of it and continue at the full monthly rate.  The link is https://www.oilnewslondon.com/subscribe 

Back to the individual companies, Tower Resources (TRP) announced a Cameroon update.  They’d like to spud the well in the course of June 2020, but that of course needs financing.  The Company believes that it will be able to complete a farm-out within its desired timeframe, although there can be no certainty.  It remains a bet.

Union Jack Oil (UJO) and Reabold Resources (RBD) announced West Newton updates.  Rathlin, the operator, now has filed a revised plan to the Environment Agency for approval, following which they will notify the Oil and Gas Authority in respect of the recommencement of the A-2 extended well test.  Meanwhile, the bottom hole drilling location for the B-1 well has been finalised and preparations are currently underway for the works required for the commencement of operations at the B site, which will begin during Q2 2020.  It looks like the timetable is slipping a little here, hence the poor market reaction.

Touchstone Exploration (TXP) raised £9 million in a placing at 40p.  Funds will be used to accelerate exploration drilling at Ortoire, where so far they’ve had considerable success.  At the other end of the credibility spectrum, Canadian Overseas Petroleum (COPL) only managed to raise a comparably miserable £117,000 from its Chairman, “reflecting his confidence in the company” they said.

Eco (Atlantic) Oil & Gas (ECO) was “delighted to announce it has been recognized as a 2020 TSX Venture 50™ company, an annual ranking of top-performing companies on the TSX Venture Exchange.”  Makes you wonder how bad the other TSX Venture companies must be.  Meanwhile, United Oil & Gas (UOG) announced completion of the Rockhopper acquisition.  The 114,503,817 shares issued to Rockhopper Exploration (RKH) will be admitted to trading on AIM on 28 February. 

Perhaps more interesting, Bahamas Petroleum Company (BPC) announced it has arranged a second convertible loan note facility.  Imagine the two of them competing to sell when things get going.  Interestingly, it’s a Bahamas based entity which, although the share price now is over 4p, could have participated in the recent 2p offer.  Kind of indicates they see the share price going lower than that.  Indeed, it’s still not certain whether Bahamas are fully funded yet and they say that they are continuing to evaluate farm-in options.  I suspect the recent strength in the share price is more perhaps due to a short position rather than renewed confidence in the company.

For those who are not familiar with me, I focus exclusively on small cap oil and gas companies and know this sector inside out.  I’ve been involved in the stock markets on both sides of the fence since the early 1980s and I also have many years’ operational and corporate experience in the oil industry, which enables me to see very quickly whether or not these companies are telling the truth.  It’s not just about understanding the fundamentals, though, critical is to understand how the finance and promotion side works.  That’s why I know what’s going on at these companies and where they’re likely to go.  If you’re interested in knowing my trading ideas, plus more about some of these companies that I can’t write here, then subscribe to the private blog at https://www.oilnewslondon.com/oilman-jim 

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive these blog posts by email

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.