Weekly oil news round up by Oilman Jim – RRE TRP UOG TLW ECO AAOG ZEN LEK NTOG MSMN AOGL EDR EOG UJO 88E

It’s been an interesting week and some of the shares I mentioned last weekend performed strongly.  RockRose Energy (RRE) traded at nearly £23 a share, up from just under £20 the previous Friday and Tower Resources (TRP) traded at nearly 0.8p on Tuesday up from just over 0.5p.  I said a couple of times towards the end of last year that Tower was a good buying opportunity under 0.4p.  

Both issued news.  RockRose announced the change of operatorship of the Brae Area, although they point out it is of no strategic or financial consequence.  An alternative take is expressed in Saturday’s Energy Voice article.  Tower Resources announced a Cameroon operational update, they’ve been granted a further extension of the production sharing contract until 19 September this year.  All now hinges on whether they can negotiate a farm out.

On that subject, United Oil & Gas (UOG) has no takers for its Jamaica farm-out of what they describe as a “super wildcat area.”  They’ve managed to get a short licence extension until 31 July for the final “drill-or-drop” decision, but the reality here is that when Tullow Oil (TLW) gave UOG 20% of this for free they were simply binning a work programme liability.

This was confirmed by Tullow’s trading statement and operational update last week, which stated “exploration costs written off…include Jethro, Joe and Carapa well costs in Guyana as a result of drilling results and…Jamaica licence costs due to the levels of planned future activity or licence exits.”

Tullow’s statement also includes Eco Atlantic (Oil & Gas) (ECO)’s assets, so if I was an investor, I’d be asking them some very hard questions now.  ECO is one that I highlighted as a favourite last year and which then more than doubled.  I did say that the price rise had run out of steam before the collapse on the heavy oil revelation, but it underscores what I say about always taking the profit while it’s there.  Never get greedy with these things.

I’ll move back to the positive news shortly, but first let’s get some of the others out of the way.  The Anglo African Oil & Gas (AAOG) general meeting was held on Monday morning and, as expected, the Zenith Energy (ZEN) deal was approved.  Now they need a new licence, but the signature bonus is not agreed and, equally important, they need SNPC to pay up, although why SNPC will pay ZEN when they would not pay AAOG remains a mystery.  It’s now also been revealed that the claim against Anglo African, relating to the abortive acquisition of the Tunisian assets, is for £1.7 million, so the financial situation looks terminal.

Putting them into the shade was Lekoil (LEK) which announced that its Qatari financing was false, resulting in the share price collapsing from 9.5p to 2.5p.  LEK want to present themselves as the victim of an advance fee fraud, but this “victim” saw its share price double and do more than £10 million volume at the higher level before anything was said.  A TR-1 appears to show large buying at the time of the initial financing announcement, but check it out and the previous holding has been omitted to make it look like they’re buying, when in fact they’re selling.  Strange the NOMAD didn’t spot that.  Also troubling is a post by a well known influencer that he had met with LEK the previous working day to the false finance admission and bought a further 1%+ stake in the company.  There’s no reason to doubt the accuracy of this, but it means that while the company was spinning its story to him, other directors in the next room were consulting with professional advisors regarding what then must have been known was a bogus financing and preparing the explosive RNS.  

Moving forward, the big commercial problem for LEK is they are required to pay Optimum Petroleum sunk costs and consent fees by February 2020 – a payment estimated at around $10 million.  LEK is also required to show its ability by February 2020 to raise 42.86 per cent. of the drilling costs for one appraisal well, which is estimated to be about $28 million.  LEK needs real financing fast – by February means the end of this month.

Nostra Terra Oil & Gas (NTOG), who coincidentally has the same NOMAD as LEK, announced a requisition to convene a general meeting and remove the CEO, Matt Lofgran.  The only surprise here is that it took so long.  This is another long running saga and investors should seriously ask themselves why they invest in companies like NTOG, Mosman Oil & Gas (MSMN), Attis Oil & Gas (AOGL), etc.  Low impact wells in mature areas are simply never likely to generate sufficient operating profits to cover the costs of running a London listed company.

This is just “lifestyle” for the directors, but if drilling the occasional well in the US is something you like the sound of, you can just go straight to the source and buy non-operated working-interests in wells from the same type of operators/promoters these companies deal with and receive the revenue checks yourself each month, rather than let the directors spend the money.  You don’t need the public company with its directors’ salaries and bloated overheads in between.  You can get the same terms as the companies do and operators generally will allow you to participate for as little as 1/32nd or even 1/64th, that’s 3.125% or 1.5625% of the well, it’s always expressed in fractions.  It might be interesting for some who have a few thousand spare and would like to start to learn how it all really works in practice.  In the worst case, I doubt losses would exceed those of an investment in NTOG.

To have a chance with small stock market oil companies, best is to be in those with a big, high impact drill coming up, so back to shares and some better ones, starting with 88 Energy (88E) which announced a Charlie-1 appraisal well update.  Ice road construction is underway, the permit to drill application is submitted, approval is expected this month, and operational activity is progressing to plan for a February 2020 spud.  This is is now up around 100% from when I mentioned it as a favourite towards the end of last year.

Finally, and at long last for Egdon Resources (EDR), Europa Oil & Gas (EOG) and Union Jack Oil (UJO), their Wressle development was granted planning consent on appeal.  Icing on the cake for them is that North Lincolnshire Council has to pay their costs.  Regulatory issues probably will be easier now for onshore UK oil companies following the election.

I’ll be back mid-week with the next blog and podcast and if you’re interested in knowing all my trading ideas now and more about what I think of the various companies, then subscribe to the private blog at http://oilnewslondon.com/subscribe  I think you’ll find it’s worth it.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – RKH PMO 88E RRE BPC PET PVR TRP LEK ZEN AAOG

First full week of the New Year and plenty going on.

Rockhopper Exploration (RKH) announced Heads of Terms with Navitas to farm-in to Sea Lion.  This adds additional strength to the Sea Lion joint venture, which Rockhopper believes will increase the likelihood of a successful senior debt project financing for the Sea Lion Phase 1 development.  Key of course will be the local political situation.

Sea Lion JV partner Premier Oil (PMO) announced its trading and operations update.  2019 production was 78,400 boepd.  It’s also looking forward to drilling its first well in Alaska, which it describes as “potentially transformational” for Premier, whose own interest comes via a farm out from 88 Energy (88E), which incidentally is now up 100% from when I mentioned it as a favourite towards the end of last year.

Premier also announced proposed UK North Sea acquisitions, which will add around 23,000 boepd production with development upside. The acquired assets are forecast to generate over $1 billion of free cash flow to the end of 2023, exactly the type of acquisition that RockRose Energy (RRE) is looking for.  They announced a year end trading update.  Year end total cash was $370.7 million ($54.9 million restricted), similar to the current capitalisation.

The market valuation of RockRose is very much a mystery.  I first bought it around 130p and a few months later received a 150p per share return of capital, leaving me in for free.  I said at the time it was financial alchemy, but so far it appears to be working.  RockRose now is nearly £20 a share and average production in 2020 is forecast to be around 21,000 boepd, a 9% increase on 2019, and they continue to look at opportunities to make acquisitions.  That’s the key to the next step up here.

Bahamas Petroleum Company (BPC) announced an update regarding their mutual fund set up to allow locals to invest.  The fund has opened for receipt of initial subscriptions and the proceeds received from investors will then be utilised for the purchase of ordinary shares in Bahamas Petroleum.  It will be interesting to see how this goes and may open some new fund raising ideas for other exploration companies looking for extra finance.

Petrel Resources (PET) shocked investors, announcing that payment for the second tranche of shares has not yet been received from the Tamraz group.  The shares fell sharply, but still look fairly resilient at 7.75p, some 520% above the 1.25p price Tamraz is paying and it would be rather strange if this transaction did not complete.  I highlighted Petrel several times last year as a favourite around 1p and I suspect that most who bought at this level will be long gone now.

The arrival of Alan Linn as CEO at another Dublin company, Providence Resources (PVR), has perked the share price up considerably.  He’s looking forward to working with the board to bring new investment into the Barryroe project.  Tower Resources (TRP), another looking to drill soon, also is starting to firm up.  I said a couple of times last year that this was a good buying opportunity under 0.4p.  Now 0.53p, key of course is a farm-out.

Lekoil (LEK) has been strong since it announced appraisal funding secured at the start of the year.  It followed up last week with an announcement of the commencement of site survey on OPL 310.  Currently 9.4p (up over 100% from 4.65p at the time of the 2 January announcement), Hannam & Partners have calculated a risked net asset value of 23p a share and an un-risked net asset value of 239p a share.

Meanwhile, the Zenith Energy (ZEN) and Anglo African Oil & Gas (AAOG) saga draws to a close.  Voting on the deal is Monday morning and it looks like Zenith is going to get the old Congo field.  It will be goodnight and goodbye to Anglo African though and, absent a relative miracle, I see it being sold down to virtually zero and delisting mid-year.  I’ve been seriously critical of this company for a considerable period of time, unfortunately most just wanted to argue with me.

Now, if you’re interested in knowing my trading ideas and want to read a more critical assessment of some of these and other companies, then subscribe to the private blog at https://oilnewslondon.com/oilman-jim  I receive a lot of enquiries from people interested in subscribing asking whether there is a minimum subscription term.  To clarify this point, there is no minimum term and you can unsubscribe at any time.  There’s also a first month’s trial subscription at 25% of the usual monthly cost, so why not give it a go.

For those who are not familiar with me, I focus exclusively on small cap oil and gas companies and I know this sector inside out.  I have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works.  I also have many years’ operational and corporate experience in the oil business, which enables me to see very quickly whether or not these companies are telling the truth.  It’s not investment advice that I offer and if you want that, you should speak with a financial advisor.  I share my take on companies and the markets and, as those who follow me know, I’m rarely wrong about these matters.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – PET I3E 88E ECO TLW LEK PANR AAOG ZEN

It was pleasing to see Petrel Resources (PET) end up as top performing share of the year, closing on 31 December at 15.5p.  PET was highlighted as a favourite in the blog several times last year around 1p.

The New Year has got off to an interesting start.  I3 Energy (I3E) announced a corporate and funding update: it’s now preparing for a mid-2020 appraisal programme to delineate the fields which the Company believes could contain more than 600 million barrels of oil in place P50.  It says that it is simultaneously conducting a farm-down process of its licences to potentially fund the 2020 drilling campaign and will continue working with its senior lenders on a development facility for its assets.  Important to remember that future drilling remains entirely subject to funding, which may not be as forthcoming and on as attractive terms as last time.  Unfortunately, a lot of investors (institutional and retail) don’t trust this company anymore.

On the bright side, 88 Energy (88E) which I listed as a favourite recently (and I list very few as that), started the year trading up around 100%.

Eco Atlantic Oil & Gas (ECO) issued an announcement noting the recent news from Tullow Oil (TLW) regarding the light oil discovery made at the Carapa-1 well, offshore Guyana.  Testing indicated that the oil is 27 degrees API, with a sulphur content of less than 1%.  ECO is another blog favourite that gained more than 100% last year, but then collapsed when it turned out that their oil was heavy.  I did say that the upward share price movement had run out of steam before that happened, but since then it appears the CEO knew about the issue and said nothing while he was actively promoting investment in the company.  A lot of investor trust has been lost here sadly and the shine has rather gone off ECO.

Lekoil (LEK) issued a strong announcement.   It has secured $184 million funding from the Qatar Investment Authority for the appraisal drilling and initial development programme on the Ogo field within OPL 310.  Currently 9.5p (up from 4.65p at the time of the announcement), Hannam & Partners have calculated a risked NAV of 23p a share and an un-risked NAV of 239p a share.

Pantheon Resources (PANR) never ceases to surprise.  This £83 million market cap company has been suspended from trading due to its failure to publish its accounts on time.  The auditors are now requiring a third-party report to independently confirm the directors estimates of recoverable oil before they will sign off.  I wonder why.

The soap opera continues at Anglo African Oil & Gas (AAOG) with the war of words between Align Research/Jub Capital and Zenith Energy (ZEN)‘s social media representatives escalating.  Looking at matters pragmatically, the ZEN proposal sucks virtually all the value out of the company, leaving just enough cash to pay the directors’ salaries until AAOG probably delists in six months time and the share value goes to zero.  The Align Research/Jub Capital proposal, due to the promotional capacity of the parties and the structure of their deal, offers the possibility of significant share price appreciation.  Unfortunately, the directors do not appear to be considering stock market realities and perhaps are more focussed on their own personal liability.  They’re also not particularly aligned with the shareholders since, very wisely, like Sefton and Berwick before them, neither the CEO nor the Chair own any shares at all.

The people who’ve always got hurt with this (and hurt very badly) are those who believe that Tilapia has value.  Based upon the information released by the company and other information in the public domain, I view Tilapia as worthless.  As readers of the blog know, I’ve held this view for some time, all the way down from much higher prices.  If the project was real, SNPC would have been happy to pay their share.  If the project was real, they would have completed in the Mengo and now be producing.  If the project was real, Sefton and Berwick would have done that last year, instead of the absurd charade over a never to be completed CPR.  The whole carry on was nothing short of embarrassing and an insult to the intelligence of anyone with even the most basic understanding.

There are no real oil companies interested in Tilapia and the reality of the situation is harshly illustrated by the fact that in terms of actual cash on the table now for Anglo African, Zenith have offered £83,333 and Align Research/Jub Capital have offered £100,000.  Reality is, an actual oil company could put together a “killer proposal” with an upfront cash offer of £125,000 and take this out now if they wanted it.  But none of them do.  If I was a shareholder, it’s a no brainer: reject the ZEN offer and push the board to do a deal which most benefits those to whom they have a fiduciary responsibility.  The reality is though that ZEN will probably win, since the board will vote the 22% owned by Riverfort and YAII in favour of the deal, but the legality of the issue of over a hundred million shares de facto at less than nominal value to provide votes for themselves is something I see there being quite an argument about.  In reality, these shares that the board is going to vote have not even been paid for.

Now, if you’re interested in other information which can’t be published in this blog and even franker appraisals and assessments of the various small cap oil and gas companies, why not subscribe to the private blog.  The big advantage I have is that I know whether they’re stock promotes or real projects, which enables the approach to them to be tailored accordingly.  My track record on assessing these companies speaks for itself.

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 have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works.  I also have many years’ operational and corporate experience in the oil business, which enables me to see very quickly whether or not these companies are telling the truth.  It’s not investment advice that I offer and if you want that, you should speak with a financial advisor.  I share my take on companies and the markets and, as those who follow me know, I’m rarely wrong about these matters.”

Further information on subscription can be found at https://oilnewslondon.com/subscribe

I’ll be back mid-week with the next blog and podcast.  Main flow of oil news should start on Monday.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – PET UKOG 88E EME RBD AAOG ZEN

Quiet Christmas week, but still plenty to comment on.  Starting with the positives, Petrel Resources (PET) is turning out to be the top performing AIM share of the year.  This was highlighted as a favourite many times in the blog around 1p.  It’s now 19.5p, up 1,850%.  There’s another one with similar potential in the current issue of the private blog for those who are interested.

UK Oil & Gas (UKOG) announced a HH-1 and HH-2z extended well test update.  HH-2z achieved initial rates of up to 1,087 barrels of fluids per day and oil cuts of up to 60%.  HH-1 Kimmeridge oil flow was resumed thereafter with an average daily rate of 301 barrels of oil per day.  UKOG now aims to shut off formation water ingress in HH-2z and conduct an extended test on both wells simultaneously and try to surpass the psychologically important production number of 1,000 barrels of oil per day.  Thereafter, the plan would be to drill up to four more horizontal wells and achieve the maximum production number allowed under the current planning permission of 3,500 barrels of oil per day.

88 Energy (88E) announced all is on track to drill Charlie-1 in the first quarter of 2020 and Empyrean Energy (EME) is progressing its objective to drill its first well in China during 2020.  The latter also announced that a £10 million equity placement facility has been secured, but however you dress these things up they’re death spirals, so I’d say that for the time being, EME is best avoided.

Reabold Resources (RBD) also issued news, but since it’s the festive season I’ll refrain from commenting on this, since I don’t want to spend the rest of the day dealing with tweets from angry shills and shareholders.  Normal coverage of Reabold will resume in the New Year and for those who say I’m wrong about this company, it’s now standing at less than 42% of its year high.

What I’ll certainly comment on though is Anglo African Oil & Gas (AAOG), where even its most ardent supporters have now accepted that I was right all along.  Latest is that it wants to sell off 80% of its Congo subsidiary to Zenith Energy (ZEN) for £500,000 cash to be paid in six equal monthly instalments, which nicely and conveniently enables the Sefton appointed board members to keep their full salaries until at least mid-2020. (For the sake of completeness, there’s also a further £500,000 of eventually to be worthless ZEN shares with sale restrictions.)

Under this deal, ZEN get 80% of the SNPC debt due to AAOG, which currently stands at $5.3 million (c. £4 million), so that’s a return to ZEN of £3.2 million cash for an initial payment of c. £83,000 cash (and a total over 6 months of £500,000, if they pay the rest of it).  The justification for this deal is that SNPC won’t pay AAOG to whom the money is actually owed, but for some strange, unexplained reason will pay it to ZEN.  If AAOG shareholders are stupid enough to believe this and approve the deal (and they may well be), then Sefton, Berwick and the Board get away with it all scot free.

Align Research have an alternative proposal to put to the shareholders: dismiss the Sefton nominees on the Board, appoint Alexander MacDonald (the previous CEO), pursue monies owed to AAOG by Sefton and Berwick’s company, ATOG, and carry out a full forensic examination of all the funds spent/transferred out of AAOG by Sefton and Berwick.

I’m not a shareholder, but after the shafting delivered by the existing Board, why continue to vote as they want you to.  ZEN and the AAOG Board, who are responsible for this disaster, certainly aren’t going get you your money back.  All this deal does is get Sefton, Berwick and the AAOG Board off the hook in return for them handing over the last few million pounds of Anglo African shareholders’ funds to Zenith.

Now, if you’re interested in knowing my trading ideas and want to read a more critical assessment of some of these and other companies, then subscribe to the private blog at https://oilnewslondon.com/oilman-jim  I receive a lot of enquiries from people interested in subscribing asking whether there is a minimum subscription term.  To clarify this point, there is no minimum term and you can unsubscribe at any time.  There’s also a first month’s trial subscription at 25% of the usual monthly cost, so why not give it a go.

For those who are not familiar with me, I focus exclusively on small cap oil and gas companies and I know this sector inside out.  I have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works.  I also have many years’ operational and corporate experience in the oil business, which enables me to see very quickly whether or not these companies are telling the truth.  It’s not investment advice that I offer and if you want that, you should speak with a financial advisor.  I share my take on companies and the markets and, as those who follow me know, I’m rarely wrong about these matters.

I’ll be back next weekend with a full blog and podcast.  In the meantime, I wish everyone all the very best for the New Year 2020.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – AAOG BLOE SOU UOG RKH TXP UJO RBD SOLO PXOG ECHO

Companies are now saving up their good news for next year, but there were still plenty of interesting announcements last week.  Anglo African Oil & Gas (AAOG) CEO, James Berwick, resigned on Monday and the share price now is down to around half a penny.  They’re only going to “commence a search for a new CEO at the appropriate time” so it’s looking like things are over at this company.  It’s a good result for those who paid attention to what I’ve being saying about Anglo African over the past year and shorted it.  Most though were simply very angry with my comments.  As Mark Twain said: “It’s easier to fool people than to convince them that they have been fooled.”

Another winner for shorts over the last six months is Block Energy (BLOE), which ramped up its share price in anticipation of a placing on the basis that it was producing 1,100 barrels of oil per day and didn’t need a placing.  In fact, as I warned numerous times, the production was mainly water and the price collapsed once the truth was admitted by the company.  Block announced an operations update on Tuesday in relation to its latest well, but I would guess that having been spoken to very firmly by the regulators, it’s taking no chances now, disclosing only that the well is “flowing” and not even mentioning the word “oil” this time.  It’s remarkable looking back on this now, how aggressively I was attacked at the time by those peddling the false stories and also by those who wanted to believe them.

A third disgrace is Sound Energy (SOU), which I’ve been calling down from the mid 40s.  It announced yet another “keep the lights on” placing on Wednesday, this time at 2p, but it’s still capitalised at £26 million, so has plenty of room to fall further, which it may well do since the sale of its assets now sounds very far from certain.  A big success for those who shorted it though.

A further company attracting controversy is United Oil & Gas (UOG), where some placees who were sitting on losses have gone on a ramp.  The claims being made on social media were so excessive that the company was forced on Friday afternoon to issue a RNS disclaiming them and emphasising that sustainable production rates could be significantly lower than the initial test.  The group responsible for the statements which prompted the RNS has previously been distributing other misleading information and I would strongly suggest taking the time to read carefully and understand fully all the RNS announcements from United Oil & Gas and Rockhopper Exploration (RKH).  On the brighter side for those stuck in at higher levels, if the pump continues to work temporarily, it could provide an opportunity to get their money back.

More realistic news from Touchstone Exploration (TXP) which announced strong test results from its COHO-1 well, plus an oil discovery.  In the New Year, they’re going to comprehensively test the the Cascadura-1ST1 well and, if the findings are positive, it will set up a development drilling program.  Still to be resolved though is how this would be funded.

Union Jack Oil (UJO) and Reabold Resources (RBD) announced that extended well test operations are to be recommenced following receipt of the required regulatory approvals.  The market was not impressed unfortunately and the share prices of both companies dipped, although Union Jack looks to be the firmer of the two now.

Solo Oil (SOLO)’s production acquisition is looking uncertain.  They’re now trying to renegotiate terms with ONE Dyas to reflect changes since signing, but there are no guarantees that new terms can be agreed and the deal may not proceed.  No market changes here though since the shares currently are suspended.

Prospex Oil & Gas (PXOG) announced the possible acquisition of a minority stake in a Spanish gas power project.  They say they believe their current market cap represents a fraction of Prospex’s underlying value, unfortunately, the market probably won’t believe that and the financing for all this is likely to be at an even lower price next time.

Echo Energy (ECHO) announced mobilisation of the rig to drill the Campo Limite exploration well, which is due to spud before year end.  The operator’s estimated volumes for gross gas initially in place for the Campo Limite area is 48.9 billion cubic feet P50 mid case.  Estimated geological chance of success is 70%.  Let’s see if luck changes over the New Year for this part of Mr. Parson’s self styled “holy trinity.”

I’ll be back next Sunday with a full blog and podcast and if you’d like to know my actual trading ideas, then subscribe to the private blog at https://www.oilnewslondon.com/oilman-jim  The next issue will be sent out on Friday.

In the meantime, I wish you all a very Merry Christmas.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – I3E AAOG PRD UOG TLW RKH HUR ECO EOG PANR RRE

Plenty of excitement last week and not just with the election.  The week started with I3 Energy (I3E) seeing its price collapse back down on Monday after readers of the blog and listeners to the podcast were alerted last weekend to the false statements being made about the previous week’s announcements.  I started challenging the misstatements on Friday and a crescendo of abuse built up right through the weekend, only finishing on Monday morning after what I said would happen did.  Most of this was from those promoting the false interpretations of I3’s announcements, but some was from genuine investors who having been deceived and bought the shares, now wanted to believe the lies.

The same thing happened with Anglo African Oil & Gas (AAOG) who announced on Thursday no further repayments from SNPC, lower than expected payments under the investor sharing agreement and yet another rig delay.  This proved too much even for core investors and the price collapsed 70% to 0.7p.  As those who follow me know, I’ve been calling this down from the high teens and, just like with I3E last weekend, I received much abuse on the way.  Some of this came from known shills, but the majority was from those who had bought too many and wanted desperately to believe.

As I said mid-week, I can understand how upsetting it is for those who believed the misrepresentations and bought these companies’ shares, but all I do is look at the facts and report them.  There’s nothing personal in this, there’s no agenda and all I can say is be very careful in future who you listen to.  Particularly in the case of AAOG, I think some people have racked up enormous losses, multiplied up by averaging down and, if it’s any consolation, some parties are looking to try to put together an investor group with 5%+ to call an EGM and remove the directors.  I understand there could be a good case to recover damages from previous and current directors, plus the company’s professional advisors.

Back to more normal news, Predator Oil & Gas (PRD) announced that it has entered into a rig option agreement.  They have until 31 January 2020 to finalise a legally biding contract.  No word yet as to how they will finance this, although they do say that it creates a catalyst to attract drilling partners if required.  They already have a convertible loan note outstanding, so my view would be to do nothing here until financing news is released.

United Oil & Gas (UOG) returned from suspension on Monday, possibly not the best of days with Tullow Oil (TLW)’s simultaneous announcement of its difficulties.  Tullow of course is co-venturer in UOG’s most significant asset offshore Jamaica.  On the bright side, they announced the receipt of $855,000 from Hibiscus in relation to their North Sea blocks. Unfortunately, their Egypt acquisition from Rockhopper Exploration (RKH) turns out to be being financed at 3p, which is nearly half the price of their last placing.  I’ve never been particularly keen on this company, since it’s an arbitrary collection of assets and doesn’t really appear to have any direction.  The ones that do best in the market generally have one big project and 100% focus on it.  Share prices also tend to stagnate once companies reach the production stage and dreams turn into realities.  The money usually is in the run up to that point.

Hurricane Energy (HUR) announced a trading and operational update.  All looks solid.  Average production rate of 13,300 barrels of oil per day for 2019 and 20,000 barrels of oil per day forecast for 2020.  Currently 33.2p, it trades under the 34p placing price of three years ago, even though it has achieved its targeted objectives.  Think about it.

Eco (Atlantic) Oil & Gas (ECO) announced the renewal of its Guyana licence, another one where Tullow is the operator and major interest holder, but everything here comes down to the operating decisions that will be made in January.  Will Tullow want, or be able to continue, is the question.

Europa Oil & Gas (EOG) announced its AGM statement.  Key here is whether they can secure farm-outs for their Inishkea licence, offshore Ireland, and their newly awarded licence in Morocco.  At a £10 million market cap, it remains a pure gamble.

Pantheon Resources (PANR) announced successful bids for acreage in an Alaska lease sale.  27,840 acres might sound a lot, but the announcement is pure fluff and PANR remains very much on the avoid list.

In closing, RockRose Energy (RRE) announced the commencement of its development drilling campaign.  The company is set to participate in at least seven wells before the end of 2020.  I bought a couple of tranches of RRE around 130p and received a 150p per share “return of capital” a few months later, so I’ve always liked it.  Now 1,735p, it appears to be temporarily stuck, but another acquisition should move it.

If you’d like to know my trading ideas now (and as those who follow me know, I’m rarely wrong), then subscribe to the private blog at https://www.oilnewslondon.com/oilman-jim

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – HUR I3E CLNR UKOG ALBA ANGS ECHO CORO ZEN PVR RBD RMP

It was another interesting week.  Getting the bad news out of the way first, Hurricane Energy (HUR) announced a disappointing well result and the share price fell around 25%.  I mentioned HUR two weeks ago as a gamble for those who prefer to ignore what I say about only going for the “certainties,” the small number of shares each year which, absent a “black swan” event, look virtually certain to perform.  Hurricane also illustrates the law of diminishing returns as a company develops and requires more capital.  It’s now trading below the 34p placing price three years ago.

A further North Sea focussed company, I3 Energy (I3E) confused many people with its two RNS announcements on Friday.  The first RNS announced that “it is expecting to complete the subscriptions for 14,285,715 new ordinary shares in the Company at 35 pence per share…and expects the admission of the new shares to be on or around 9th December”  Unfortunately, certain social media posters either ignorantly or deliberately ignored the first part of the announcement stating that it was “further to its announcement of 8th November,” before the latest Liberator well disappointment.  This subscription in fact was nothing new.  The second RNS announced the receipt of the funds exactly as expected and in line with the legally binding agreements announced on 8 November, thus again nothing new.  This, however, was spun by certain parties into a post Liberator fundraising at several times the market price.

Even more seriously misrepresented was I3E’s statement that “BP Oil International Limited, funds managed by Lombard Odier Investment Managers group, and James Caird Asset Management…all took up their contractual rights to be granted warrants to subscribe for new ordinary shares in the Company…at an exercise price of 40 pence per share.”  The spinners falsely interpreted this as BP at al. actually exercising their warrants and paying 40p per share.  The truth is that these were simply free extra warrants granted to these parties, pursuant to the terms of earlier agreements.  They didn’t pay anything.

Overall, I3E ended up 52% on the day and, absent any meaningful news next week, it’s going to come back down.  Problem here is people relying on a tweet rather than reading the RNS themselves, or reading the RNS and not understanding it.  As I’ve said before, be careful whose tweets you believe.

Another one operating in the North Sea is Cluff Natural Resources (CLNR).  I highlighted this at 1.325p last weekend and some strong buying came in Monday.  It turns out partly to have been well known oil company investors, David and Monique Newlands, who’ve bought 3.1%.  Still well below the last 1.75p placing price, it’s one to think about.

UK Oil & Gas (UKOG) announced an 0.85p placing and the share price has fallen back into the 0.90s.  They need extra cash since their co-venturers at Horse Hill (principally Alba Mineral Resources (ALBA))  are considered unlikely to contribute their 14.365% share of current cash calls.  Short-term, the UKOG share price is going to come down to the results of the extended well test and the quantity of shares sold by the convertible loan note holders, plus of course the new placees.

Angus Energy (ANGS) now is talking about paying dividends to shareholders.  Sadly, there’s a long way to go to achieve that; all they actually announced last week is OGA approval for the transfer of the Saltfleetby licence and the appointment of an operator.  Big question is, when/if they do get to the point of production and sale, will the company at the plc level actually operate profitably?  And then there’s the tedious formality of clearing off the £6,226,000 accumulated loss first before they can legally pay any dividends.  Remember, someone paid Angus £2.5 million to take Saltfleetby off their hands and they knew what they were doing.

Echo Energy (ECHO) updated regarding its South American assets.  Santa Cruz Sur is producing 587 barrels of oil and 11.96 million cubic feet of gas per day net to Echo’s interest.  Further upside could come from the Campo La Mata x-1 well currently being drilled and the upcoming Campo Limite exploration well.  Like Angus, the issue is can they ever actually operate profitably at the plc level and return money to shareholders.

Stablemate Coro Energy (CORO) announced the disposal of its Italian assets to Zenith Energy (ZEN) for £400,000 payable in new ZEN shares issued at more than double the market price.  Theoretically, there’s a further payment if a certain production target is met, but that’s far from certain.  I think it’s a good deal for Coro, who probably correctly viewed the “assets” as liabilities and it gives Zenith something to talk about for no cash.  It’s quite interesting to read and compare the perspectives in the two RNS announcements.

Providence Resources (PVR) announced a leadership change.  Tony O’Reilly has stepped down as CEO with immediate effect.  His position had become untenable after the Barryroe fiasco when the funds failed to arrive and the board now is looking to identify and recruit a replacement.  It’s difficult to see where this goes now in the current environment, but it’s an interesting one and always worth keeping an eye on.

Reabold Resources (RBD) announced an increase in its shareholding in Danube Petroleum to 51%.  The problem is that none of these investments have yet been shown to achieve any return and the share price is back down to where it was two years ago, well below the price of recent fund raising exercises.  I’ve been critical of this one for some time and others are now starting to see the problems too.  If RBD want to retain credibility they’re going to have to disclose production numbers and I’m not sure they’re going to be sufficient to satisfy the market.

On a more positive note, Red Emperor Resources (RMP) is back in business.  It’s signed an option agreement to acquire a large scale Perth Basin oil play in Western Australia.  Unfortunately, it’s not particularly exciting since they’re only talking about acquiring 3D seismic in order for drillable prospects to be matured.  They do, however, say that they are continuing to identify and evaluate additional projects that can potentially provide relatively near term, high impact drilling opportunities.  With this one, that’s what to look out for.

Now, if you’re interested in knowing my actual trading ideas and want to read a more critical assessment of some of these and other companies, then subscribe to the private blog at https://www.oilnewslondon.com/oilman-jim

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 have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works.  I also have many years’ operational and corporate experience in the oil business, which enables me to see very quickly whether or not these companies are telling the truth.  I share my take on companies and the markets and, as those who follow me know, I’m rarely wrong about these matters.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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 – 88E BPC CLNR EDR GBP I3E IOG LBE MNRG PET PMO PTAL PVR RBD RPT UJO UKOG

It turned out to be quite an exciting week.  Global Petroleum (GBP) announced a new prospective resources estimate of 964 million barrels of oil for its petroleum exploration licence 94 in Namibia.  One reservoir is estimated to have best estimate unrisked gross prospective resources of 772 million barrels of oil with a 15% chance of geologic discovery.  It’s worth a go, yet at the same time it’s worth nothing to them unless they can drill it, which will require either a farm-out or a large financing.  News of that is still awaited.

Regal Petroleum (RPT) announced a memorandum of understanding to acquire licences in the Ukraine with estimated oil initially in place of approximately 675 million barrels.  They intend to appraise the licences with the drilling of up to three wells.  Existing 3P reserves for RPT currently are estimated at 3.89 million barrels of oil equivalent, so this transaction, if it proceeds, could represent a very significant uplift.  Generally I’m cautious about companies operating in the former Soviet Union, but this now is one to keep an eye on.

More bad news for Providence Resources (PVR) unfortunately.  TOTAL have withdrawn from the licence containing the “Avalon” prospect.  And there’s still no news of a replacement farm-in partner for Barryroe, so the share price just continues to drift lower.

Another Dublin company continues to go in the opposite direction.  Petrel Resources (PET) pushed on with its remarkable journey higher, hitting 26.5p last week, up 2,550% from the 1p price at which I stated it as a favourite several times earlier this year.  More companies like this in the private blog if you’re interested.

Cluff Natural Resources (CLNR) announced that it has submitted multiple applications for additional licences in the latest 32nd UK Offshore Licensing Round.  Interestingly, one has been made jointly with an established international operator (I would guess Shell).  The blocks applied for contain a number of drilled discoveries, undrilled prospects and leads, which will create a strong pipeline of future drilling opportunities. They say they’re making significant progress on the existing portfolio, in particular the licences which Shell farmed into earlier this year, and they’re now working towards a firm well commitment on Selene and Pensacola.  With a £19 million market cap and a £15 million fundraising completed over 30% higher than the current 1.325p share price, it’s certainly one for the watch list.  Their farm out process on the Dewar prospect has generated significant interest and announcement of the completion of this could act as a catalyst.

UK Oil & Gas (UKOG) announced the completion of HH-2z.  Extended well test operations are expected to start next week.  Stephen Sanderson, UKOG’s Chief Executive, is “confident that the 2,500 ft of permeable Portland sweet-spot reservoir section, 70 times that seen in HH-1, can deliver significant rates.”  What I think we can be confident of is that UKOG will issue the most positive press releases possible.  Where this goes now though is very much going to be a function of how much the convertible loan note holders sell.

PetroTal (PTAL) announced a drilling and production update, providing an increased 2019 exit oil production rate of 11,000 – 13,000 barrels a day.  They will complete new production facilities towards month end, increasing capacity to 10,000 barrels of oil per day, but expect that the facility will be able to handle in the order of 15,000 barrels per day.  This is the first “forward looking” RNS that the company has issued and some are expecting a placing, but let’s see.

Union Jack Oil (UJO) finally announced its placing.  £5 million is being raised at 0.15p.  They and Reabold Resources (RBD) now are funded for two further wells at West Newton, which are expected in the second quarter of next year.  The interesting mystery here now is what is going to happen with Humber’s share.

Independent Oil & Gas (IOG) announced that henceforth it will be known simply as IOG.  The aim is to have a new identity and hopefully put behind controversial associations of the past.  It’s another one to keep an eye on and once the many loose shares in issue have found more permanent homes, it should start to work its way higher.

88Energy (88E) announced completion of the farmout with Premier Oil (PMO) and approval of the plan of operations for Charlie-1, which is expected to be drilled in February next year.  The gross mean prospective resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 billion barrels of oil (480 million barrels net to 88E).

Bahamas Petroleum Company (BPC) now is trying to raise funds from locals to finance next year’s drill via the creation of a Bahamas-domiciled mutual fund that will exclusively hold BPC shares.  It’s quite a novel approach and I imagine people could be interested.  It will be fascinating to see how this goes and I’m sure many other companies will be interested in the outcome.

I3 Energy (I3E) announced another disappointing well result, but many obviously knew about it in advance of the market.  I said on Wednesday that this one is a rigged deck and unless you’re an experienced trader I would suggest leaving it alone.  The share price continued to collapse again on Thursday prior to a further announcement of the conclusion of its 2019 drilling campaign (people had been led to believe there might be a fourth well).  I now view this as uninvestible.

Longboat Energy (LBE) listed this week.  Essentially it’s a cash shell looking for a deal.  Could be interesting and I’ll be looking into it further.  Another one that appears to be entering the oil and gas space is MetalNRG (MNRG) which announced the signature of an exclusivity agreement to acquire 75% of an established operating company based in Romania, which owns 100% of an oil and gas concession.  No details on this yet, but as they become available I’ll share my thoughts.

Finally, Egdon Resources (EDR) announced licence extensions covering the Resolution gas discovery where a Competent Persons Report by Schlumberger reported estimates of mean contingent resources of 231 billion cubic feet of gas.  They announced earlier this month an exclusivity agreement regarding these licences  with a large internationally recognised exploration and production company and they have until 31 January next year to demonstrate to the Oil and Gas Authority’s satisfaction that a farm-in agreement has been fully executed which provides for funding of the licence work programme.  It’s potentially interesting if they can pull this off.

In closing, if you’d like to know my trading ideas (and as those who follow me know, I’m rarely wrong), then subscribe to the private blog at: https://www.oilnewslondon.com/oilman-jim

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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.

PET ECHO CORO SOU ECO HUR UKOG and making money in the markets (part 2)

Interesting second half to the week.  Petrel Resources (PET) announced that the issue of new shares to friends and business acquaintances of the new control parties has been approved.  It is anticipated that a flow of potential investment proposals now will be offered to the company.  I suggested Petrel and stated it as a favourite numerous times around 1p earlier this year (see https://oilmanjim.blogspot.com and numerous posts on Twitter) and it closed at 8.75p yesterday, up 775%.  There’s more shares with this sort of potential in the private blog.

James Parson’s “Holy Trinity” had a busy week.  Echo Energy (ECHO) announced the commencement of drilling of the CLM x-1 well.  This is the first of an expected four-well exploration drilling programme.  It’s expected to take approximately four weeks, plus a further five to six weeks if logging supports completion.  Maybe at last they will have a success, but so far at ECHO it’s been only failure.  Now 2.95p, it’s down from 17p.  Coro Energy (CORO) updated on operations at the Tambak-1 well.  This was designed to both appraise the Mako gas field and test the underlying Tambak prospect.  Appraisal success was a given, but the exploration failed and the shares fell to 2.2p.  Sound Energy (SOU) had earlier in the week announced approval of the environmental impact assessment for a 2D seismic acquisition programme, but the directors’ hearts simply are no longer in it.  None of their names were stated anymore in the RNS and the only contact for the company was an email address.  I’ve been critical about all three companies for some time and have been calling SOU down since last year when the price of their so called “golden tickets” was over 10 times higher (again see https://oilmanjim.blogspot.com and posts on Twitter), but it still has a market cap of nearly £40 million and plenty of room to fall further.

Eco (Atlantic) Oil & Gas (ECO) recognised the market reaction to their last announcement on the oil quality discovered at Jethro and Joe, and the partners are considering alternatives for further drilling and testing. Crucial will be the further update on the partners’ drilling plans for next year to be made in January 2020.  I stated ECO as a favourite several times around 80p (see yet again https://oilmanjim.blogspot.com and posts on Twitter) and it subsequently went to nearly £2.  ECO is a prime example of why you should never fully believe any of these companies – and always take profits or de-risk.  This is a permanent statement in the blog and I really can’t emphasise the importance of this enough.

For those who like a gamble (and prefer to ignore what I’m about to say below), Hurricane Energy (HUR) announced commencement of drill stem testing on the Warwick West well.  They will provide an update on initial results of the well, including flow rates and oil type, following completion of this test.  Rumour is that they they’ve a hit a huge pay zone and odds of a successful test are probably better that evens.  Currently 44.34p, parameters to look at are a 52 week low of 37.84p and a high of 64.5p.  UK Oil & Gas (UKOG) too is currently testing, in its case an extended well test of HH-2z.  I feel sure they’re going to have lots of positive announcements to put out.

Moving on to the subject of making money in the markets, on Wednesday I detailed some of the changes which have come about with advent of social media and concluded with five main points:

First, know where the company is in its operational, financing and promotional cycle.  Understanding that unlocks the door to market success, since by entering at the right point you’ll always be buying into upward moves.  And this is key.

Second, only go for the certainties, even if that just means just 10 or so trades a year.  Profits are worth nothing if they’re wiped out by losses, the losses have to be eliminated.  One of the most important lessons is that it is not just about the shares you buy, even more importantly it’s about the shares you don’t buy.  You need to control yourself and go only for the certainties, the small number of winners each year that are virtually guaranteed.  Only buy when you’re absolutely certain and don’t let it bother you if you miss a few.

Third, conviction.  You must have that so you don’t get shaken out of the position.

Fourth, position sizing.  No position must be so large that it stops you sleeping at night and fear shakes you out.  Choose a position size where even if it goes to zero, you won’t be too badly hurt.

Fifth, always de-risk as the price rises, or take profits completely.  End up holding the position for free and ride it if you want, but remember that ultimately, these companies’ business projects usually fail.

Now, although it’s enjoyable and interesting to participate, social media isn’t going to help you much with any of above, but since it’s such a big source of information for people now, let’s stay with the subject for the moment.

I think that anyone new to the market who joins Twitter must find it quite daunting.  Thousands of unknown stock symbols and tens of thousands of unknown people (or perhaps let’s say accounts) commenting on them.  They’ve no idea who even to follow and no idea at this stage whether their comments are bona fide or bogus.  I’m not going to name any names here (that’s for the private blog), but it might be useful to broadly describe the various different groups.

First, those with a good market knowledge, who have no particular agenda, but enjoy commenting and stating their opinions.  This is the group you should try to follow.  They do not depend on you buying the shares they mention.

Second, those with a good market knowledge, who do have an agenda, but this agenda is possibly only visible to the first group.  These ones are very dangerous for your pocket.  They will try to inveigle you into buying shares that result in a direct financial reward for them, either by selling you their shares at a higher price than the price at which they bought them, or because they are being paid to promote the stock.  Needless to say, these shares are rarely the best.

Third, those with limited market knowledge, but no agenda.  Harmless, but they’re generally just repeating the views of the first and second groups without discernment, although when they repeat the misrepresentations of group two, that’s usually in good faith.  They are generally unable to see the difference between groups one and two.

Fourth, those with limited market knowledge, but an agenda.  Group two hanger ons, or subalterns, they’re minor pumpers and promoters, who become unpleasant when their line is challenged.  They have no answers or proper responses, since they have no actual knowledge, and generally they have to resort to ad hominem attacks.

Fifth, those with no market knowledge, who are seduced by the promises and misrepresentations of groups two and four.  This is the largest group and feeds groups two and four.

The most money is made by groups one and two, although group one probably sleeps better at night.  Group three hovers around break even.  Group four makes a little money, but no huge rewards.  Group five lose most of their cash quite quickly.

If you do just want tips, then you need to make sure it’s only the people in group one you’re following and ignore completely the other four groups.  The problem you’ve got is that all you’re going to get is a throw away line with none of the detailed reasoning and without that you’re not going to know why you hold the share other than because someone else does and you’re not going to have the essential conviction needed to hold and not be shaken out.

I’ll move on to the third part next week, when as usual there will be a mid-week podcast and both a podcast and a blog at the weekend.  If you’re interested in knowing my actual trading ideas and want to read a more critical assessment of some of these and other companies, then subscribe to the private blog at https://www.oilnewslondon.com/oilman-jim

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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

It’s been an interesting week, with some very good news and some very bad.  To start off, Savannah Petroleum (SAVP) was able to announce that, at last, it has completed the Seven Energy transaction.  This now gives Savannah a material producing asset base to complement its Niger exploration and development assets, in respect of which it aims to recommence activity in 2020, with expected delivery of first oil from R3 East and a multi-well exploration drilling campaign.  This was financed by institutions two years ago at 35p per share and I expect to see the share price now start to work its way up from the current level of 26p.

Reabold Resources (RBD) and Union Jack Oil (UJO) advertised upgraded potential volumes  at West Newton in a pre market RNS first thing Monday morning and spiked the early buyers.  Union Jack slid down from nearly 30p to under 20p by the end of the week and the coup de grace was delivered just after market close on Friday when it announced that it is in the process of taking market soundings from investors in regard to an equity placing of up to £5 million.  Investors are not happy and are hoping that it’s not below the last placing price of 17p.  More on what’s going on here in the private blog.

Amerisur Resources (AMER) announced a recommended cash acquisition by GeoPark Colombia.  Each Amerisur Shareholder will receive 19.21p cash per share.  It’s less than people were hoping for, but significantly higher than the 12.1p price at which the shares were trading before bidding opened.  It’s also a small profit for those who bought in the 17s and 18s over the last few months.  The board undoubtedly tried for a better price (directors and institutions were in much higher) but South America is not the best place to be right now unfortunately.

Anglo African Oil & Gas (AAOG) reported that it has entered into a rig option agreement, but the rig might not be available until 30 March 2020.  Unfortunately, November turned out to be the date for a rig agreement, not the rig arriving as investors had hoped.  The problem for them though is that paying for the drill depends on Riverfort selling shares at a higher price than now and how does that situation come about?  Slippery language isn’t working anymore for these companies and I see only one way for the Anglo African share price now, which is to decline further.  I’ve been warning about this one all the way down from just under 20p and the shares hit an all time low of 2.4p on Friday.

On a brighter note, UK Oil & Gas (UKOG) announced the successful completion of its Horse Hill horizontal drill.  A total of approximately 2,500 ft of horizontal trajectory was drilled within the reservoir’s most oil productive zone, which gives around 70 times greater exposure than in the vertical discovery well.  This is why HH-2z is capable of delivering significantly greater flow rates than those seen in the vertical well.  HH-2z is now being prepared for an extensive extended well test, which is expected to commence in the coming weeks and I expect to see some impressive numbers being reported here soon.

Sound Energy (SOU) announced that James Parsons and Simon Davies have confirmed their decision to leave the Company.  This follows on from the announcement that the CFO is leaving and not being replaced.  Last week’s announcement was deliberately drafted to make people think the sale of the Morocco assets is a certainty.  So, it’s the end game here now and it appears that they’re trying one last ramp before lights out.

Interesting developments at Cadogan Petroleum (CAD).  Requisitioning shareholders had an overwhelming majority (93.08% to 6.92%) at the general meeting, thus Adelmo Schenato and Enrico Testa have been removed as directors of the Company with immediate effect, Fady Khallouf, Lilia Jolibois and Jacques Mahaux have been appointed to the board, Zev Furst has tendered his resignation as a director, Fady Khallouf is succeeding Guido Michelotti as CEO of the company and Michel Meeus, a non-executive director of the company and one of the requisitioners, has been appointed as chairman.  One of the complaints against the old board is that the company has continuously underperformed and the company’s share price has not materially improved in recent times.  The market capitalisation is £13 million and net assets (including around $14 million cash) are nearly $52 million, so there is significant upside here.

Eco (Atlantic) Oil & Gas (ECO) announced an update on the initial analysis of the Jethro and Joe wells and the share price more than halved.  This is a prime example of why you should never fully believe any of these companies – and always take profits or de-risk.  This is a permanent statement in the blog and I really can’t emphasise the importance of this enough.  All I can say in this case is that it is inconceivable that Tullow Oil (TLW) and hence ECO did not know it was heavy oil before the announcement.  Remarkably, indeed shockingly, Gil Holzman, CEO, was promoting ECO to private investors at a London South East promotional event the day before.  If you believe people can be judged by the company they keep, then him sharing a promotional platform with Matt Lofgran of Nostra Terra Oil & Gas (NTOG) possibly says it all.

Coro Energy (CORO) and Empyrean Energy (EME). announced their Tambak-1 well intersected the intra-Muda reservoir of the Mako field as expected and data have established the well as a successful appraisal of the Mako gas field.  The interesting part is coming up for CORO and EME, since their Indonesian well now will be drilled to a total depth of around 4,005 feet to test the potential of the Tambak prospect, which is estimated as having a mid-case prospective resource potential of 250 Bcf and a geological chance of success of 45%.  The impact of this drill to date has actually been negative for the share prices of both companies, but perhaps an exploration success can galvanise them.

On the subject of Indonesia, Baron Oil (BOIL) announced that it has entered into a non-binding agreement to acquire SundaGas, which owns the Chuditch Block, offshore Timor-Leste, and the Telen Block, offshore Indonesia.  The vendor will receive 66.67% of Baron before the fundraising.  There is no indication yet as to what type of financing they will do, for what amount and at what price, so we’ll have to wait for the details to form an assessment.  The shares are now suspended pending the publication of an admission document.

Finally, there’s been a lot of interest in the new private blog and some confusion too, so let’s try to clarify everything.  Currently I record two podcasts each week, one mid-week and one at the weekend, and I write a blog on Sunday.  All these remain the same, unchanged and free of charge.  The private blog contains the information which cannot be published in the public blog and podcasts due to legal constraints and it also includes my actual trading ideas with full reasoning.  It is sent out immediately by email as events dictate so you receive the information straight away.  There is a charge for the private blog, but I think you’ll find the information within it is worth many times its cost.

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 have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works.  I also have many years’ operational and corporate experience in the oil business, which enables me to see very quickly whether or not these companies are telling the truth.  It’s not investment advice that I offer and if you want that, you should speak with a financial advisor.  I share my take on companies and the markets and, as those who follow me know, I’m rarely wrong about these matters.  This is the link to subscribe: https://www.oilnewslondon.com/oilman-jim

In other news, Oilex (OEX) announced an extension of the bid closing date for Cambay, Aminex (AEX) issued a Ruvuma joint statement with Solo Oil (SOLO) who also announced the appointment of an independent non-executive director, Columbus Energy (CERP) announced a medium term funding agreement and the extension of the Inniss Trinity IPSC, SDX Energy (SDX) announced the commencement of production at South Disouq and a directorate change, Predator Oil & Gas (PRD) announced a CO2 EOR Trinidad update, Alba Mineral Resources (ALBA) announced a Horse Hill update, Echo Energy (ECHO) announced the completion of an acquisition, Range Resources (RRL) announced a continuous disclosure update and a Trinidad tax appeals update, Canadian Overseas Petroleum (COPL) announced Q3 2019 results, Touchstone Exploration (TXP) and Serinus Energy (SENX) announced third quarter 2019 results, President Energy (PPC) announced the expiry of Decree 566 and oil prices in Argentina returning to normal, Zenith Energy (ZEN) announced the filing of quarterly results, Lekoil (LEK) announced the acknowledgment of the OPL310 licence extension payment, The Parkmead Group (PMG) announced preliminary results for the year ended 30 June 2019, Cabot Energy (CAB) announced directorate and management changes and Angus Energy (ANGS) announced a Balcombe update.

Contact me on Twitter @Oilman_Jim

Click “SUBSCRIBE” to receive 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.