Weekly oil news round up by Oilman Jim – UKOG TOM MSMN PRD TRP BOIL SOLO AEX COPL RBD PVR

After its recent run, UK Oil & Gas (UKOG) announced the disappointing news on Monday that planning consent had been refused for the Loxley Portland gas appraisal project, then followed through on Tuesday with a hard dose of reality in the form of interim results.  Those who had been buying based upon an organised social media ramp saw the share price back to where it started and lost half or more of their investments; those who engaged the rampers to clear the placing stock and warrants had already taken their money.  They’re quite open in last week’s RNS that “raising funds from equity remains the most prudent and only feasible way to fund projects” so further large placings are certain. 

I said last weekend regarding TomCo (TOM) that next up would be a new placing and that’s exactly what happened on Thursday, when exactly as expected a new placing was announced on exactly the same terms as the previous cancelled one, which had created the “short squeeze” story enabling the actual placing to be sold into the market in advance at a huge profit for those inside.  The shares had traded up to 2.3p and the real shorts would have been covered in the placing at 0.4p, so 80%+ losses for some here.

Similar shenanigans at Mosman Oil & Gas (MSMN).  I said that a placing was imminent and inevitable when it conducted its last ramp, which took the share price up to 0.25p.  The usual horde of idiots who’d bought it then came on then screaming that Mosman was a profitable producer and required no placing, even saying they’d been assured of such by the company, who would finance everything using their current oil revenues.  I tried to explain the facts to them, but they were having none of it.  Reality perhaps only dawned for them on Thursday when they were hit with news of a 0.08p placing, less than a third of what some of them had paid.

Short term losses for ill-informed investors on these three are massive, but always remember that in cash terms the market is a zero sum game and what came out of the victims’ pockets went straight into those of the professional operators.  It really does amaze me, though, the number of people coming on and arguing that I’m wrong about these things, even resorting to insults.  Whether it might be better just to start sharing what is consistently correct information with those who appreciate it is something I’m seriously thinking about.  I actually do “know the game” (unlike some others who like to use the phrase) so I can tell very easily what’s coming, good and bad.  It’s become second nature now to spot the moves in advance, both up and down.

If you want to “know the game” too, I’d suggest the special trading course which explains it all in 10 parts, one a week, at £19.50 each.  You can try out the first part for just £1 to see whether you like it and I’m sure you will.  It’s a very small price compared to the value of the information.  Details are at https://www.oilnewslondon.com/course 

Positive news from Predator Oil & Gas (PRD), which updated on its forthcoming drill in Morocco.  The state of emergency there in response to the COVID pandemic is being extended to 10 July, but the rig remains securely stacked in the country ready for mobilisation when circumstances permit.  They’ve also identified a new additional target for the first exploration well.

Tower Resources’ (TRP) drill also has been delayed by COVID.  They have the added complication of also requiring finance.  The first payment from one potential partner has been delayed (again they use Coronavirus as the excuse), but even if received, more will be required.  It doesn’t look great, but let’s see.

Baron Oil (BOIL) issued its AGM statement.  Again, and as with many others currently, the theme is delay.  There is no obligation to drill before 2022 in Timor-Leste and there are no plans to drill in the UK in the foreseeable future.  In Peru, where they have been attempting to facilitate the drilling of the El Barco-3X well, it is now becoming clear that the impact of COVID will push any proposed drilling into 2021.  In the meantime of course, the bloated overheads that these small public companies like to carry consume all the cash.

Solo Oil (SOLO) announced a $5 million investment facility, but it’s death spiral finance.  They do have a plan, but so far that’s all it is and it’s difficult to say that Monday’s strategy, corporate and operations update inspires confidence.  The main focus appears to be compensating management.  

Delays at SOLO’s partner Aminex (AEX) too.  They’ve agreed to extend the long stop date for satisfaction of the conditions to the farm-out from 30 June to 14 July, but in this case, such a short extension may be a positive sign.

Canadian Overseas Petroleum (COPL) is another one which I said was going to be doing a placing and it’s now done two in the past two weeks.  The settlement with Essar Mauritius is potentially transformational, but if COPL want to increase their effective 5% stake in OPL 226, substantial further funding will be required.

Reabold Resources (RBD) provided an update on Romania well flow test operations.  Unsurprisingly, it’s disappointing.  I really don’t think this team has the ability to deliver operational results (or successful investments as they might prefer to call it), which is what they’ve foolishly set themselves up to do, and as regular followers know, this is a view I’ve held for quite some time now.

Providence Resources (PVR) is sharpening itself up, appointing Davy as NOMAD and sole broker, plus appointing existing 1.66% shareholder, Andrew Mackay, as an independent non-executive director.  All here now depends on whether SpotOn Energy can pull together the necessary operational and financial elements for a Barryroe farm-out.  There’s a good chance it can.

Finally, a quick reminder that my actual trading ideas are in the private blog each week.  My personal trading philosophy is based upon only going for those which I’m sure are certainties and I’m invariably right.  A month’s trial subscription costs just £23.75 and includes much more.  Details are at https://www.oilnewslondon.com/subscribe 

Contact me on Twitter @Oilman_Jim 

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – I3E TOM PQE PQEFF MYN AOGL COPL UKOG PRD ANGS PPC UOG SAVE IGAS DELT CLNR ZEN CASP GKP AST LOGP PVR 88E XCD BPC EDR UJO SOLO MSMN SLE

Another interesting week.  I3 Energy (I3E) announced news which appears to have confused many.  Key point is that the warrant and management option strike prices are being reset to the nominal value of I3’s shares (£0.0001/share), which means that the I3 equity is being deemed worthless.  The Canadian acquisition and any future North Sea activity therefore is of academic interest only now to existing shareholders.  You can perhaps see why a well-known group was pumping I3E so hard before the suspension, trying to get the stock away.

As expected the TomCo (TOM) “short squeeze” ran out of steam and the price has retreated significantly.  Next up here will be a new placing.  Let’s be clear, associated company Petroteq ($PQE $PQEFF) is a promotion.  No one is expecting it to achieve commercial success.  The purpose of its announcements is to sell shares.  Any company doing “business” with it is the same.  Mayan Energy (MYN) (now Attis Oil & Gas (AOGL)) is one example.  There can be occasional trades in such shares, but they’re not investments, since holding long term would only result in losses.  Same applies to TOM and all other companies involved.

I said on Monday that a placing was certain at Canadian Overseas Petroleum (COPL) and, lo and behold, one was announced on Tuesday morning.  It’s had a good run since it terminated the equity sharing agreement and we’ve seen the same in recent days with UK Oil & Gas (UKOG), which also now is free to move with the convertible loan notes being redeemed.  If you learn anything, it should be to avoid like the plague any companies with death spiral type financing.  The only time to get into these is when the death spiral is ended.  Another recent example is Predator Oil & Gas (PRD), which rose from 1.3p to over 4p once its convertible loan notes were cancelled.  I explain everything about this, exactly how it works and how you can make money out of it in my new book, details of which are below. 

Back to the news, Angus Energy (ANGS) are trying to get rid of their death spiral too and made a partial payment to Riverfort last week.  They also announced their half year report and say they are confident that their efforts for the rest of 2020 will have a transformational effect.  Let’s see.

President Energy (PPC) announced its audited Results for the year ended 31 December 2019 and say they look forward to rising to the challenges ahead.  The shares closed on Friday at 1.5p, down nearly 20% from the recent 1.85p placing price, and down 40% from the 2.5p level, where it was being pumped by professional touts pre-placing.  Note the names of those involved and be careful in future.  Again, this is something I explain fully in the new book.

United Oil & Gas (UOG) announced a reserves upgrade, but it didn’t help the share price much.  It’s important to understand that generating and buying production is easy, the hard part is getting profits down to the bottom line.  Despite all the supposed good news from United, it is still trading under its last 3p placing price at which the Egypt production acquisition was financed.

Savannah Energy (SAVE), which announced a trading update, is another one like this.  Once a promising exploration company trading over 40p, its drilling plans were cancelled by the CEO to make a Nigeria production acquisition.  Some investors thought they were going to get rich, but after a financing at 35p, it now trades under 7p.  Don’t fall for such propositions.  These types of deals rarely work on the AIM and small cap markets.

I know a lot of people don’t like to hear any of this, but it’s the unfortunate reality of these markets.  Generally, you’ll lose money investing in these companies, they’re for trading only – but some can be very good for that.

If you don’t believe me, take a look at the five year charts for a selection of these types of companies.  The only times you want to be in them are for the short periods of time when they have the occasional large upward moves.  Over time, you can only lose.  But read the book, there’s actually some very good money to be made in these markets.

Back to the company news, IGas Energy (IGAS) announced an operations and cost saving update.  In light of the recent oil price improvement, IGAS has decided to return nine fields to production and effect a reduction in the numbers of employees on furlough.  Deltic Energy (DELT) (the old Cluff Natural Resources (CLNR)) announced its change of name.  It is intended to symbolise the transition in the company’s main investments into a more operational phase following their farm-outs and ongoing partnership with Shell.  Any impact from that of course is years away.

Zenith Energy (ZEN) announced it has ceased all oil production operations in Azerbaijan.  After its failure there, field production personnel have been transferred to a division of SOCAR.  It doesn’t appear that ZEN has any oil and gas assets now.  In Kazakhstan, Caspian Sunrise (CASP) announced its annual report and financial statements.  In the short term, they are focused on surviving the impact of the Covid-19 virus and until its full impact becomes clearer, they will continue to conserve cash.  Meanwhile, in Kurdistan, Gulf Keystone Petroleum (GKP) announced that Jón Ferrier, its Chief Executive Officer, has decided to leave the company.

Ascent Resources (AST) announced its final results for the year ended 31 December 2019.  They’re very proud of themselves, although they haven’t actually achieved anything yet and, based upon the individuals’ track records at other companies, are highly unlikely to do so.  Lansdowne Oil & Gas (LOGP) also announced results for the year ended 31 December 2019.  Unsurprisingly, they remain steadfast in their belief of the significant potential of Barryroe and are focused on unlocking its inherent value.  Where this goes from here, though, depends entirely on the outcome of Providence Resources’ (PVR) farm out negotiations through SpotOn Energy.

88 Energy (88E) announced it now has a relevant interest in 79.84% of XCD Energy’s (XCD) shares and 79.22% of XCD Energy’s listed options.  It’s extending the offer period until 13 July.  Bahamas Petroleum Company (BPC) announced the completion of administrative formalities regarding its BPC Investment Fund.  This will enable local people in the Bahamas to participate in the outcome of the project, and of course raise some money for the company.

Egdon Resources (EDR) has reached a settlement with Humber Oil & Gas regarding Biscathorpe.  As a result, Egdon will hold a 35.8% operated interest in the PEDL253 licence.  Union Jack Oil (UJO) also picked up an additional 3% and now has a 30% interest in the licence.

Solo Oil (SOLO) delayed filing its financial statements.  Importantly, though, it confirmed it has sufficient cash to support its operations in its current state to the end of Q1 2021 and remains funded for its share of the firm budget for its Tanzanian operations, capital programme and strategy.  In contrast, Mosman Oil & Gas (MSMN) announced a corporate and operations update.  It encapsulates pretty much everything that’s wrong with the worst of the AIM companies.  Basically it’s just nailed on, guaranteed losses for anyone who holds long term.

San Leon Energy (SLE) issued final results.  They had a cash position of $36.5 million as at 19 June 2020, with an expected $10 million to come in Q4, and a further $103.9 million expected in interest and loan note repayments by end 2021.  Market capitalisation is £102 million and they have an interest of 10.58% in OML 18, which can produce around 40,000 to 50,000 barrels of oil per day.  It doesn’t look expensive.

As mentioned above, my new book explains exactly how it all works and how you can actually make money out of these markets, using a method where risk doesn’t actually matter in the end from a trading perspective.  The book is exceptionally frank and I think virtually all will find it extremely useful.  Details of how you can obtain a copy are at https://www.oilnewslondon.com/oilman-jim 

Contact me on Twitter @Oilman_Jim 

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – PET PTAL 88E PPC PRD UJO RBD TOM QFI ZEN BLOE AOGL ADME NTOG MATD CHAR CERP BPC TXP TRIN TLOU COPL

Quite a busy week for news.  Petrel Resources (PET) announced preliminary results for the year ended 31 December 2019.  The Chairman’s statement is a grand read and John Teeling just tells it all frankly as it is.  This was a blog favourite last year around 1p and is now nearly 4p, having been many times higher.  It could move strongly upwards again with positive Iraq news.

PetroTal (PTAL) announced 2019 year-end financial and operating results, reporting a “difficult trading environment” plus a placing to raise £14 million, which will allow them to continue the development of the Bretana oil field, but at a slower pace.  I’ve been warning about this one in the blog all the way down from the 30s.  It’s now just over 10p.

88 Energy (88E) declared its XCD Energy takeover offer to be unconditional.  This was another blog favourite last year around 0.7p, which ran up over 100% before the drill.  But, unless you’re into gambling, remember never to hold for the results of these.

President Energy (PPC) announced a drilling and work over plan update.  This is one that was pumped by paid commentators up to 2.5p, before it announced the inevitable placing.  It’s now 1.75p.  Another one that I warned about in the blog – several times.

Predator Oil & Gas (PRD) updated regarding its new Irish venture.  “Estimated project revenues are consistent with those quoted for the Barrow-in-Furness FSRU Project of £80 to £100 million” it says.  PRD is moving up strongly now in anticipation of its forthcoming Morocco drill.

Union Jack Oil (UJO) and Reabold Resources (RBD) were trying to make the case that oil and gas production at West Newton will be “green.”  I’m not sure how many people will be convinced of this.  More important for investors I think will be the announcement of dates for the drill.  RBD also announced the commencement of well test operations in Romania.  Whether this gas will ever actually will go into commercial production is another matter entirely though.

As I mentioned on Wednesday, I’ve written a new book “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” which explains exactly how it all works in all its gory detail and how you can make money out of it.  The book is exceptionally frank and I’m not aware of anything else like it.  I am certain virtually all will find it useful.  For a limited time, I’m offering a complimentary, pre-publication copy in electronic format to all new private blog subscribers.  If you read the book, you’ll understand my approach to the market and see how I apply the principles in the private blog.  A first month trial subscription (including the book) costs just £23.75 and if it’s not for you, you can cancel anytime you wish.  The link is https://www.oilnewslondon.com/subscribe  

Back to the week’s news, there were certainly some grim goings on at the bottom end of the market.  TomCo (TOM) announced a placing and a commercial agreement.  Those in the placing started forward selling, then another company involved, Quadrise Fuels International (QFI), denied the accuracy of TomCo’s RNS and trading in TOM shares was suspended.  It was reinstated two days later with the placing terminated, leaving the forward sellers short and the share price jumped over 250%.  The forward sellers thought they were part of the inner circle; in fact, they were just the marks and John Geoffrey Bolitho sold his entire 5.58% stake to them, plus no doubt others buying in on a ramp based purely upon other people being short.  I guess they also want to try to clear the warrants too.

You can perhaps see why I think these companies and markets have got zero to do with investing.

In the same peer group, Zenith Energy (ZEN), Block Energy (BLOE) Attis Oil & Gas (AOGL), ADM Energy (ADME) and Nostra Terra Oil & Gas (NTOG) all issued announcements hypothesising about future events, but none of them have any real record of actually delivering.  Matt Lofgran, CEO of NTOG, complained about my statements in the blog regarding Nostra Terra last weekend, but there’s no apology, because to say they raised millions from investors with no return to shareholders other than an ever declining share price is absolutely correct.  Just take a look at the RNS announcements and the chart.  Instead of a few barrels of oil every so often here and there, Mr. Lofgran needs an exciting new deal with big numbers to promote if he ever wants to achieve anything.

On to slightly better companies, Petro Matad (MATD) announced final results.  I’ll say it now, a placing is absolutely inevitable here.  Chariot Oil & Gas (CHAR) announced final results and was quite frank: exploration in frontier regions has fallen out of favour and there is a need for nearby / adjacent discoveries to unlock basin potential.  Focus now is going onto its gas development project in Morocco and at a £7 million market cap (with more than that in cash at the year end) it doesn’t look too bad a bet.

Columbus Energy Resources (CERP) announced the issuance of their so called “Lind Facility” shares.  Like Bahamas Petroleum Company (BPC), with whom they are merging, CERP also is dependent on convertible loan note financing.  It does not augur well.  Meanwhile, Touchstone Exploration (TXP) announced final production test results from the Cascadura-1ST1.  They say it is ”reasonable to design for an initial gross production rate of between 7,750 and 9,700 boe/d.”  Trinity Exploration & Production (TRIN) announced its AGM statement.  Production levels are at a five year high, with a year to date average of 3,269 bopd, and peak production from the new Echo platform is expected to be in the order of 3,250 to 3,900 bopd net to Trinity’s interest.

Tlou Energy (TLOU) announced an entitlement offer to raise up to £1.65 million and further announced the receipt of an Electricity Generation License  from the Botswana Energy Regulatory Authority.  Canadian Overseas Petroleum (COPL) announced a loan agreement for £600,000 and termination of the equity sharing agreement.  I said on Monday it was a step in the right direction, which looks like the case since the share price more than doubled on the week.

My new book “UNDERSTANDING THE LONDON SPECULATIVE MARKETS and THE SECRETS OF HOW TO PROFIT FROM THEM” explains it all.  I hope you take the opportunity to read it.

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – UJO ANGS EDR EOG BPC CERP HUR PTAL TRP RBD ECHO NTOG AAOG

Stock market and oil prices gave back some of their recent gains last week, with plenty of uncertainty still remaining on the international macroeconomic front due to virus related demand concerns.  Domestically, the main issues now are Coronavirus and its economic impact, Brexit and the “no deal” possibility which will soon come into focus, plus whatever the BLM protests and counter protests might turn into over a long, hot summer.  It all makes for interesting (and potentially dangerous) times.

Moving on, there were a couple of grumbles last weekend regarding negative coverage of companies.  Just to clarify, these blogs and associated podcasts cover the news being issued by the more speculative oil and gas companies each week.  Some issue good news, some issue mediocre news, some issue bad news, and some pretend that their bad news is good.  It’s different to the other blogs and podcasts, because I don’t accept compensation from the companies, so I can say it as it is and I don’t pretend news is exciting or positive when it isn’t.  I’m genuinely independent and simply state the truth as I see it.  I’m rarely wrong.

I’m sorry if anyone doesn’t like my commentary, but it’s the reality of the news which the companies issue.  If you’re looking for solace, there are plenty of other commentators retained by these companies to soothe your financial pain.  But you’ll only ever succeed in the markets if you can handle the type of uncomfortable truths that I provide and adjust your approach accordingly.

I know about this stuff, because I’ve been deeply involved in the small cap speculative markets since the early 1980s, both in the UK and the US.  I understand exactly what everyone is doing and precisely what their agendas are.  My particular focus is on the oil and gas industry, where I have significant experience, but I also understand fully how the game is played in all the other sectors, whether it’s mining, pharmaceuticals, technology, or any other area.  The modus operandi with all of them is just the same.

On to the company news, Union Jack Oil (UJO) announced the acquisition of an additional interest in the Wressle project.  It’s buying a further 12.5% for £500,000.  Most importantly, because it’s only maintaining this current market capitalisation due to the upcoming West Newton drill, Union Jack says it “remains in a strong financial position with current cash reserves in excess of £5.5m and fully funded for its existing drilling, testing and development commitments on all of its projects during 2020.”  Among other small cap companies with UK interests, Angus Energy (ANGS) announced that prior approval has been obtained for the installation of processing facilities at the Saltfleetby ‘B’ site, Egdon Resources (EDR) announced approval by the Oil & Gas Authority of their farm out to Shell and Europa Oil & Gas (EOG) announced the acquisition of a further offshore Ireland licence.

A busy week for Bahamas Petroleum Company (BPC), which announced both the award of a petroleum licence offshore Uruguay and the acquisition of Columbus Energy Resources (CERP) in an all share merger.  The latter was not received well by the market and the share prices of both fell sharply.  It’s looking more and more like the Bahamas drill may be purely promotional.  Regarding Columbus, it’s fascinating that VSA Capital was saying to retail clients that it was worth over 20p, yet when it came to the crunch, they were happy to advise the CERP directors that tuppence a share was fair and reasonable.  You see why I sometimes can be cynical.

Hurricane Energy (HUR) announced the departure of founder, Dr. Robert Trice.  It’s a sorry saga for those investors who believed, but you see this so often, with the share price ending up lower than it was before the initial drilling “success.”  It’s one reason I believe these types of shares really are only for buying and selling over a timeframe of a few months and not for holding longer-term.

As I said it would, PetroTal (PTAL) announced a placing.  It’s raising £14.1 million at 10p, with warrants attached.  It’s far from out of the woods yet though.  The contingent liability to Petroperu was approximately $43 million at end May and the production facilities at Bretana are having to be pledged to Petroperu in respect of that, plus there are further obligations to suppliers of approximately $49 million, excluding the contingent liability.  It does still have its fans, the very ones who were vehemently denying the existence of the supplier liabilities until last week.  Next foul up by management, I guess Petroperu just takes the the field from them under the pledge.

Full year results were announced by Tower Resources (TRP) (loss of $2.7 million), Reabold Resources (RBD) (loss of £4.3 million) and Echo Energy (ECHO) (loss of $13.5 million) with nothing exciting in them.  Managements of this trio have all lost their shareholders substantial amounts in recent years.  These, however, are relatively serious companies compared to Nostra Terra Oil & Gas (NTOG), which announced an operational and corporate update.  After years of supposed effort and millions upon millions raised to finance the oil and gas equivalent of a corner shop, which every other operator in the area can somehow make a good living out of, NTOG still can’t even pay its overheads.  Same as others, it’s just an endless share price decline, with financings at ever lower levels.  To cap it all though, Anglo African Oil & Gas (AAOG) entered into another death spiral financing to pay their directors’ salaries.  It doesn’t even have a business to provide hope to its shareholders.  Are these the sort of companies you want to invest in?

There are always a few good ones, but most are not and, even with the good ones, there’s only a relatively short window of opportunity in which gains can be made.  Understanding this is what it’s all about.  It’s no good being stuck in losers and supporting them tribally, watching your money drain away.  You need to get out of them, get into those with actual immediate potential and make sure to turn your paper profits into cash while they’re still there.  I’ve written a 10 part trading course, which explains everything for those who want to understand how these companies and markets actually work and how to make money out of them.  Details are at https://www.oilnewslondon.com/course  I also write a private blog each week covering my actual trading ideas and other matters.  Details of that are at https://www.oilnewslondon.com/subscribe  

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – BPC UKOG ANGS IGAS IOG PVR LOGP CERP PRD PPC CLNR EME UOG COPL AST PET

Both the markets and oil prices continued to firm up last week and, on the company front, it was an interesting week for news.

Bahamas Petroleum Company (BPC) announced its final results.  Nothing remarkable in them, but rather disconcerting that they’re converting over £1.5 million of the notes at 1.27p per share, when the market price was standing at nearly 3p.  The company will proceed to issue a further 120 million new shares and continue on its path of dilution for the reward of certain undisclosed “investors.”  People appear to have been misled into thinking Bahamas Petroleum is now fully financed for the drill and have been buying these new 1.27p shares at up to nearly three times that price.  Unfortunately, it’s not and it’s come back quite a bit since I pointed this out on Twitter.  You really have to read the RNS announcements carefully.  The financing talked about is “conditional.”  There likely will be money to be made, though, and possibly big money at that, but you need to be alert and aware and, of course, enter at the right price, which I suspect will be quite a bit lower than where it is now.  The special trading course explains all about how to do this.

UK Oil & Gas (UKOG) announced a placing to raise £4.2 million at 0.2p per share.  It’s not clear yet if they’re paying off the CLN with cash, or with shares as per the mechanism they refer to in their RNS.  One way or another, though, the convertible should be gone and once all the new shares have churned, there’s at least potential for the share price to move higher.  Meanwhile, also onshore UK, Angus Energy (ANGS) has submitted its application to Lincolnshire County Council relating to the extension of the Saltfleetby pipeline to the National Grid Terminal and IGas Energy (IGAS) announced they are seeking to develop new assets as they position themselves to play what they say will be an important role in the UK’s energy transition.

Independent Oil & Gas (IOG) announced the award of the Phase 1 Well Management Contract.  They’ve appointed Petrofac, who look like a good choice.  Phase 1 comprises the development and production of the Southwark, Blythe and Elgood fields in the UK Southern North Sea through a total of five wells, with gas transported onshore via the Thames Pipeline.

Providence Resources (PVR) issued their 2019 annual results.  Providence has entered a period of exclusive negotiation with SpotOn Energy in relation to the Barryroe farm-out following SpotOn Energy’s recent £500,000 investment in Providence, but it looks like there’s plenty still up in the air here.  Lansdowne Oil & Gas (LOGP) also have a 20% stake in Barryroe, so their fortunes remain very much tied.

Columbus Energy (CERP) and Predator Oil & Gas (PRD) announced the start of Phase 2 of their CO₂ Pilot Project in Trinidad.  The aim is to increase oil production and they will be building up to continuous injection in the coming weeks.  The results are awaited with interest.

President Energy (PPC) announced a deeply discounted placing last week at 1.85p.  I expected this, in fact I was certain it would happen, and I warned about it a number of times over the past couple of weeks or so.  Remember, when you see paid commentators recommending a stock and even interviewing each other about it, it’s not for your benefit, rather for those who employ them.  Avoiding holding shares over a placing is one of the most important keys to success on AIM.  I explain exactly how to spot these upcoming placings in the special trading course.  It’s easy when you know how to do it.

Cluff Natural Resources (CLNR) issued an operational and corporate update.  Shell and Cluff are fully committed to drilling the Pensacola and Selene prospects, they say, with drilling anticipated to commence in the second half of next year.  Those who choose to read this lengthy RNS further will also see that while both Shell and Cluff remain committed to drilling the Selene prospect, in light of the current investment environment it is anticipated the Selene well will now be drilled in 2022.  So there’s nothing exciting happening here for quite a long time.  Best avoided now perhaps, but it could be a good one for a later date at possibly a much lower entry price. 

Empyrean Energy (EME) announced that an extension has been agreed with the China National Offshore Oil Corporation for the first phase at Block 29/11, offshore China.  The company now has until 12 June 2022 to drill its first well.  They hope to do that sooner, though, as soon as it is practicable and safe to do so.  It should be an interesting one if and when it happens.

United Oil & Gas (UOG) announced its latest Egypt well results.  Flow rates of around 8,700 barrels of oil equivalent per day were achieved during testing and United’s net production from the Abu Sennan asset as a whole is likely to rise to over 2,500 barrels of oil equivalent per day in the coming weeks.  What matters now is whether in a company like this, any of that can actually flow down to the bottom line.

Canadian Overseas Petroleum (COPL) issued what appears to be a rare piece of good news.  They’ve reached an agreement in principal to resolve the dispute with Essar Mauritius and will retain an effective interest of 5% carried through the drilling of the first appraisal well.  It’s not going to amount to riches, but at least it’s something.  They also have the option to increase their effective interest to 15%, by paying 10% of historic expenditures of Essar Nigeria at cost through the drilling of the first appraisal well, although that option could require a relatively substantial fundraising.

Ascent Resources (AST) announced the Administrative Court of the Republic of Slovenia has ruled that an EIA is required for their planned work.  No surprises there.  The Slovenian environmental agency has been saying that all along.  It would not be unreasonable to think that it has been the company itself delaying operations, rather than spending the funds raised for their actual intended purpose.  As I’ve said before, it’s just a lifestyle company for the Board, so the “news” doesn’t really matter anyway, since nothing of value will ever be achieved for the shareholders, as at the other companies of which they have previously been or still remain directors.

For balance, I should say that these types of shares can occasionally perform, but only on organised ramps where you risk getting spiked.  These ramps also generally presage a heavily discounted placing.  Overall, if you hold, you will inevitably lose money.  Just take a look at some historic charts and you’ll see what I’m talking about.

Meanwhile, some chancers were tipping Petrel Resources (PET) around the 6p level last week on its Iraq oil potential.  I highlighted this company several times last year at a penny and a number of regular readers made significant money.  It actually got as high as 26.5p at one point.  Note, though, that despite what some of these accounts are saying, I’m not endorsing it at 6p.  It was a favourite of mine last year at one penny.  At that price it was a certainty, at several times that price it’s not.  What some fail to understand is that opinions change in relation to the share price level.

For those interested, my personal trading focus is on the elimination of all potentially loss making trades and only going for those which I view as certainties.  That is the secret to actually making large profits.  I set out my trading ideas in the private blog each week and I’ve also written a 10 part trading course for those who want to understand these small cap markets fully and make money out of them.  Details of the course are at https://www.oilnewslondon.com/course and details of the private blog are at https://www.oilnewslondon.com/subscribe  There are trial offers for both.

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 – PVR LOGP PET CLON PRD RBD UJO UKOG RPT ENW CORO EME AST BPC 88E PTAL ECHO HUR

A short week, but no shortage of news:

Providence Resources (PVR) announced receipt of the outstanding £200,000 from SpotOn Energy and progress with the farm-out of Barryroe is back on.  It’s not clear why PVR needs SpotOn as an intermediary, but the important point is can a deal with a well financed, larger oil company be done.  If so, it will be good news for 20% partners, Lansdowne Oil & Gas (LOGP) too.

In other Dublin oil and gas small cap news, Petrel Resources (PET) announced that it is raising £250,000 at 3.25p per share, with the main purpose of advancing its interests in Iraq, where it maintains strong relationships with government officials.  I highlighted PET as a favourite several times last year around 1p and it’s now over 4.5p, having been as high as 26.5p. 

Sister company, Clontarf Energy (CLON), announced preliminary results for the year ended 31 December 2019.  Clontarf’s reports are usually worth reading, if only for Dr. John Teeling’s comments and opinions.  Their main interest is a a 60% stake in the Tano 2A concession offshore Ghana, in which Petrel owns a 30% interest too.

Quite a lot of Irish news last week.  Predator Oil & Gas (PRD) announced its intention to proceed to apply for a liquefied natural gas import licence for Ireland following the execution of confidentiality agreements with a global supplier of LNG and an owner of LNG re-gasification vessels.  It’s an interesting idea, since Ireland risks running short of gas in the not too distant future.

Back in the UK, Reabold Resources (RBD) announced the conditional acquisition of a further 16.665 per cent. interest in West Newton, plus a £5 million “Discretionary Cash Facility” with “death spiral” potential.  It’s good news for Union Jack Oil (UJO), less so for RBD shareholders.

UK Oil & Gas (UKOG) gave notice of its Annual General Meeting.  Due to Covid-19 health and safety advice, it will be held via an electronic platform.  It could be lively with online attendance.  Let’s see how many questions they allow, and from whom.  There’s a considerable amount of dissatisfaction, since the outstanding loan notes are being converted at ever lower prices.  Last tranche announced on Thursday was at 0.1796p and there’s still a further £1.85 million outstanding.  With 8.686 billion shares now in issue, all investors are seeing is endless dilution.

The old Regal Petroleum (RPT) is giving itself a makeover.  It now has a new, more contemporary name, Enwell Energy plc (ENW) and has launched a new website.  It’s probably a good move and indicates that they’re looking to increase investor appeal.

Coro Energy (CORO) and Empyrean Energy (EME) announced their much expected Mako resource upgrade.  No surprises there and no positive impact on their share prices either.  Question now is can they develop and commercialise it, because that’s the hard part.

Coro connected company, Ascent Resources (AST), announced a “Slovenian Strategy Update.”  It was a neat way of disguising a 200,000 Euro default.  It’s just a lifestyle operation for the Board, so none of the “news” really matters anyway.

Bahamas Petroleum Company (BPC) announced signature of the drill rig contract.  The window for commencement of drilling is between 15 December 2020 and 1 February 2021. It’s a big drill with significant speculative potential, but it all now comes down to whether and how they can finance it.

88 Energy (88E) announced the despatch of its bidder’s statement, which contains its offers to acquire all of the ordinary shares and listed options in XCD Energy Limited.  I mentioned 88E as a favourite several times last year and it rose over 100% in the run up to the drill.  It’s a regular money maker if you know how to get the timing right and the next drill is awaited with interest.

PetroTal (PTAL) announced that publication of its two outstanding sets of accounts are further delayed.  Meanwhile it “continues to assess a variety of financial arrangements to ensure it has the necessary funding.”  I said a number of times before that it would require funding, regardless of all the self-financing hubris and, as regular readers and listeners will know. I’ve been negative about this one all the way down from the 30s.

As an aside, I write critically about many companies.  Most comments receive little challenge and, if there is one, it’s usually a polite communication explaining what the writer thinks I’ve got wrong.  I always know the ones whose share prices will completely collapse though.  It’s indicated by the receipt of a barrage of abuse and sometimes threats.  AAOG, BLOE, RBD and PTAL are some recent examples.

Back to the news, Echo Energy (ECHO) announced that while it was being ramped the previous week, Lombard Odier sold more than half its stake.  Always remember that when you see paid commentators promoting a stock, it’s to enable someone to sell it.  ECHO is another one I’ve been warning about, all the way down from 17p.

Hurricane Energy (HUR) issued disappointing news the previous week and fell into the 6p range, but Hannam & Partners have issued a new report with a target of 45p.  It’s a very rare event indeed that a share price reaches a broker’s target, but it does indicate some potential.  The link to their full report is in my Tuesday Twitter post on the subject.  The Oil and Gas Authority has been understanding of the situation and it was announced last week that they have extended the deadline for the commitment well on Lincoln to 30 June 2022 and extended the deadline for plugging and abandoning Lincoln Crestal to 30 June 2021.

For those interested, my personal investing and trading focus is on the elimination of losses and only going for those trades which I view as certainties.  That’s the secret to large profits.  I set out my trading ideas in the private blog each week and I’ve also written a 10 part trading course for those who want to understand these small cap markets in detail and make money out of them.  Details of the course are at https://www.oilnewslondon.com/course and details of the private blog are at https://www.oilnewslondon.com/subscribe  Subscription to the private blog also gains you full access to the subscribers section of the Oil News London site, including key information such as the full schedule of upcoming drills.  There are trial offers for both.

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – 88E UKOG PET PXOG AEX PVR JOG

I said last week it wouldn’t be long before 88 Energy (88E) started planning its next drill and they confirmed that on Thursday in their latest operational update.  It could be quite interesting once fully financed.  It’s a share, where if you time it right, delivers returns virtually as good as guaranteed (it did an easy 100% last time from the 0.7p placing in the run up to the spud and I highlighted it as a favourite several times in the blog before that run).  It’s one I’ve also profited from many times before.  Obviously, you never hold for the drill result.

Overall, there’s been a strong recovery for both the oil price and the markets this past week, with confidence returning and money flowing back into shares.  It’s all looking much better now than it was a few weeks ago.  Some further news:

UK Oil & Gas (UKOG) converted another £75,000 of the convertible loan, this time at 0.1944p per share.  The remaining loan balance is £1.93 million, so still quite a lot to go.  Balanced against that is some potential strong news flow regarding not just Horse Hill, but some of their other assets too.  Where the price goes from here depends entirely on how much new buying comes in.

Petrel Resources (PET) announced an update on their agreement with the Tamraz Group.  Petrel still haven’t received the money due and are cancelling the shares that were to be issued to Tamraz, whose remaining shares remain frozen since they still haven’t bought back the shares they sold in breach of the lock-in agreement.  Meanwhile, Petrel is progressing its existing projects, of which the most promotional would be their Iraq activities.  I highlighted PET as a favourite several times last year around 1p and it’s now 3.75p, having been as high as 26.5p

Prospex Oil & Gas (PXOG) issued its 2019 final results.  Timeframes may well have to be extended since project operators are adjusting to the current environment and taking a cautious approach to discretionary expenditure.  Meanwhile, PXOG burns £1 million a year in administrative expenses.  It’s difficult with companies like these for shareholders even to have a fighting chance of making money from them if they hold.

People sometimes get angry when I make comments like these and say I’m negative.  To be clear about this, all I’m negative about is losing money.  I’m very positive about getting it right and succeeding.  To do that you need the right shares.  And if all I do is just say nice things about them all as some other commentators do, then my comments and opinions would be worthless.

Following on from my recent piece about cleaning up AIM, I think a further major problem is caused by investors’ failure to read and/or understand the disclosure information available.  Some trade simply based on someone else’s tweet and, to many, their concept of “research” is to read some recent posts on the message boards.  The more “diligent” might listen to the latest interview.  Very few read the RNS announcements and hardly any read the admission document.  Yet these are the key documents mandated by the authorities to be published for investor information.

There is often a reluctance by some investors to confront facts.  They know a side of the story that they like and they don’t want to hear anything that contradicts their beliefs.  This weakness contributes to huge losses.  In reality, if something isn’t what you think it is, you want to be out.  Unfortunately, most won’t accept they’ve made a mistake until it’s too late and they’ve lost their money.  Pride is the enemy here.

The only way to succeed, of course, is to base decisions on facts, not fallacies which you’d like to be true.  Accepting reality is essential.  Conviction can only be based upon your own assessment of the facts, not the thoughts and opinions of others.

It’s critical to always bear in mind that many commentators and message board/social media posters have their own agendas and will deny the truth of points you may raise in public, particularly regarding sensitive subjects.  You have to be strong enough to believe in yourself and your own knowledge.

Remember with many of these smaller companies, the “other side,” the directors and the promoters, are not playing on the same team as you.  Investors are who they feed off.  Your money is their living.  Read the RNS announcements, the admission document and ignore most of the rest of it.  Reality is many investors would spend more time researching which washing machine to buy than they would with shares in which they’re investing 10 or even 100 times that amount.  Don’t be one of those.  Focus should be on news and share prices and how they’re moving, not the comments of others.  This isn’t negative, the return for not allowing yourself to be misled can be serious financial success.

There’s a lot of money to be made in the markets, but not from those companies which are being touted so someone else can sell their shares to you.  You need to go for shares where you have the conviction yourself that they will perform and avoid the uncertain trades, which have a habit of ending in losses.  The Special Trading Course explains all this.  It’s about how to take advantage of what is an imperfect market.  It warns you about what to avoid so you don’t get cleaned out and also informs you of the type of situations where there can be virtually guaranteed profit.  I think most, even those with significant experience, will find it extremely useful.  There are 10 parts at £19.50 per part and I’m certain that it will be really helpful, so for a limited time, you can receive the first part of the trading course for just £1.  Read it, see what you think and if it’s not for you, you can cancel with the click of a button and pay nothing further.  Special links for blog readers and podcast listeners are https://www.oilnewslondon.com/weekly if you want to receive it weekly over 10 weeks, or https://www.oilnewslondon.com/daily if you prefer to receive it over 10 days.

Back to the company news, Aminex (AEX) announced a farm-out update.  It’s received the Tax Clearance Certificate from the Tanzania Revenue Authority and with onward submission to the Tanzania Petroleum Development Corporation to be forwarded to the Ministry of Energy, Aminex has now accomplished all of the conditions within their control in order to complete the farm-out.  Things are starting to look much better for them now.

There’s a sense of deja vu at Providence Resources (PVR) who announced on Friday that SpotOn Energy has experienced some delays in closing out the necessary arrangements with its consortium and has informed Providence that it will be necessary to delay the second tranche of its investment by approximately one week.  Let’s hope this doesn’t turn out to be a repeat of the Chinese fiasco.

Jersey Oil & Gas (JOG) announced completion of the acquisition of Equinor’s interest in Licence P2170.  It provides them with the opportunity to potentially developing the Verbier discovery as part of the Greater Buchan Area hub, plus further exploration upside.  As always, it will come down to whether, and on what terms if any, financing can be obtained.  It’s potentially a very large project.

This blog covers the news each week.  I write another covering my trading ideas, which may be of interest.  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.  Details of the private blog are at https://www.oilnewslondon.com/oilman-jim 

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – AIM PTAL 88E MSMN COPL PPC MATD UJO UKOG PRD

There was some talk last week about “cleaning up AIM” and I suggested perhaps borrowing a few ideas from the United States, who have been dealing with the challenges of regulating micro-cap fraud on a much larger scale, for a much longer period of time.  Adopting certain provisions of their Securities Act would help, in particular minimum holding periods for shares issued in placings and disclosure of compensation by paid commentators.  Another practical way, and this approach proved very effective, is when a company announces a new business endeavour and heavy promotion starts off the back of a short news announcement, suspend the shares pending publication by the company of what in the UK would be a new admission document disclosing all information necessary for investors to make an informed investment decision.  I’m not aware of any companies to whom this happened in the US ever coming back.  Just a few thoughts if anyone was serious about wanting to clean up the market.

Strange goings on at PetroTal (PTAL).  It closed at 7p in London on Thursday the previous week, then was walked up to the equivalent of 9.6p in the North American markets on the Friday when London was closed.  PTAL had some heavy social media promotion last weekend, the angle being buy at the “bargain” price in London first thing Monday morning.  It did some good volume, although the price of course didn’t go anywhere, but the interesting question is who was behind it?  Entirely coincidentally I’m sure, Miton sold half its stake in the company on Monday.  Fact is PetroTal is now down from 32.5p to 6.9p and has recently disclosed a hitherto unknown contingent derivative liability of $42 million.  Reality is it’s an old style Canadian stock promotion out of a letterbox in Zug and this tends to be what happens with these companies.

The question is and it goes back to the points I made at the start, do we always have to rely on others to protect us?  With common sense and a bit of knowledge, we can do that ourselves.  Problem is the lack of knowledge plus most people’s laziness and unwillingness to learn.  Many investors, particularly new, rely on certain paid commentators for guidance, not realising that person is getting paid to persuade them to buy their offers.  And if you’re one of those investors, understand that while you’re buying, the people who are paying these commentators are selling.  Think about that.  Then when the placing comes along and the share price dives, your trusted guides start chuntering on about how wise the company was to take advantage of increased market interest to raise and they’ve spoken to the CEO and it’s all great, etc. etc.  Hold your shares they say and it will all be fine.  Unfortunately, it never is.  Some of these people cover many shares, using them as clickbait to draw in investors desperate to hear any comments about the shares they’re stuck in and desperate for another tip to make back their losses.  Next time, see if you can spot the one(s) they’re being paid for.

Many of these companies can’t raise money in the normal manner, only via the market, selling to the most ignorant and ill-informed.  Personally, I would say it’s market abuse, particularly since some commentators vehemently deny receiving payment, even though everyone familiar with the business knows they do.  It also falls foul of advertising regulations.  On their clients’ side, it has to be insider dealing selling shares when you know that a placing is forthcoming.  So plenty of ways to stop it if anyone wanted to.

I explain all this in much further detail in the Special Trading Course along with many other things to enable you to protect yourself.  Also, I explain my methods for making money in the markets, which perhaps are a little different to most.  I actually just finished writing the final part of the Special Trading Course last weekend.  In it I’ve written down all my observations about these markets and companies, the issues with the bad ones and how to make money with those that look certain to perform.  I think most, even those with experience, will find it useful.  In fact, I’m certain that it will be really helpful, so for a limited time, you can receive the first part of the trading course for FREE.  Read it, see what you think and if it’s not for you, you can cancel with the click of a button and pay nothing.  Special link for blog readers and podcast listeners is https://www.oilnewslondon.com/free

Moving on, 88 Energy (88E) released it’s Bidder’s Statement, setting out the details for its takeover of XCD Energy.  As I’ve said before, expect them to start planning soon for the next big drill, which could be quite interesting once fully financed.  It’s a share, where if you time it right, delivers returns virtually as good as guaranteed (it did an easy 100% last time from the 0.7p placing in the run up to the spud and I highlighted it as a favourite several times in the blog before that run).  It’s one I’ve also profited from many times before.  Obviously, you never hold for the drill result.

Mosman Oil & Gas (MSMN) announced the agreement of terms of a fairly uninspiring farm-out agreement whereby it receives an immediate sum of just under £8,000, plus a further similar amount after completion of the required seismic re-processing work.  If all proceeds satisfactorily, it will end up with a 15% interest carried through the first well.  A huge ramp took place, with many getting spiked on a 350% share price rise.  I did warn about it on the day, explaining that a review of the accounts indicated a placing must be imminent.  As expected, it’s now given up the vast bulk of its gains and those who bought it earlier in the week are sitting on some very substantial losses.

I said on 12 April that it could be “lights off” at Canadian Overseas Petroleum (COPL) and that was very much confirmed by their announcement on Wednesday, which stated that “the Company does not currently have sufficient working capital, cash inflows and/or adequate financing to continue its operations.”  They’re now even paying the staff in shares.  The future rests on a share price destroying £2 million equity placing agreement with Yorkville Advisors Global and Riverfort Global Opportunities, but closing of this facility is contingent on the clearing of a prospectus.  It’s hard to see the attraction here.

President Energy (PPC) has been getting a lot of promotion on social media, some from the paid commentators too.  The story is that the government in Argentina is going to institute a minimum oil price of $45 per barrel.  It sounds great, but $45 oil would only be a boon for producers if there were buyers.  There aren’t.  “If there’s nobody to buy the oil,” said one union leader, “how will higher prices help?”  Watch out, because these things often presage a placing.

Petro Matad (MATD) announced cost reductions that they say will see them through to next year with their current cash resources.  Meanwhile, the Block XX Exploitation Licence application is progressing with the Mongolian authorities.  I suspect there won’t be too much happening here for some time, although MATD is always one for an opportunistic placing if the opportunity arises.

Union Jack Oil (UJO) announced final results, but most importantly reconfirmed that it is fully funded for all current drilling and well testing commitments.  UJO had a cash balance in excess of £5.5 million as at 1 May and the company remains debt free.  Works now are underway at West Newton, with further developments awaited.

UK Oil & Gas (UKOG) announced a further loan balance reduction, converting into shares at just over 0.2p this time.  They also paid off £75,000 in cash out of the recent £1.275 million placing at 0.2p, leaving £2.005 million outstanding on the loan.  I suspect we may be reaching the bottom here and it’s now time to start watching UKOG more closely.

Predator Oil & Gas (PRD) now is paying off its convertible loan, partly via a new placing at 2p.  It’s still well down from the 4p price at which most of the funds were raised and COVID plus the oil price remain serious concerns.  Nevertheless, the millstone around its neck now is gone and at least the share price will have room to breathe.

If you’re not yet familiar with me, 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, which enables me to see very quickly whether or not these companies are telling the truth.

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.  You can try out the first month on a trial basis for just £23.75.  The link is https://www.oilnewslondon.com/oilman-jim 

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – PTAL UJO RBD 88E XCD AAOG ZEN JOG PRD AEX

Oil prices have been firming up, making projects more viable now for low cost operators.  It’s still difficult for many, but some can make it work at these levels.  More importantly, for those involved in the stock market, it injects confidence and share prices are starting to perform.

Not all though.  PetroTal (PTAL) now has collapsed, as I expected it eventually would.  As readers and listeners will know, I’ve been warning about this one for some time.  It’s not just COVID and oil prices that brought them down, rather them having to reveal a contingent derivative liability of $42 million, regarding which they are in “discussions for a multi-year settlement.”  In the meantime, the Bretana oil field is shut in and they have zero, in fact negative cash flow, with their contractors unpaid.  It doesn’t look good.  But what’s fascinating is that of all the companies I criticise, those where there is the most outrage end up collapsing the most.  PTAL now is one, BLOE and AAOG are two other recent examples.

On the brighter side, Union Jack Oil (UJO) and Reabold Resources (RBD) reported the Rathlin update to the local community concerning the upcoming West Newton well.  Completion of the access track is expected to take 5 to 6 weeks and “in due course,” site construction works will commence and are anticipated to take between 5 and 6 weeks.  Drilling of the West Newton B-1 well will commence following completion of the access track, site construction activities and the conductor setting operations.  It’s all looking positive so far.

88 Energy (88E) and XCD Energy (XCD – Australia) are merging to form an oil exploration company with operations on the North Slope of Alaska.  I doubt it will be too long before they’re planning a new drill.  It’s a stock promote, but one where if you time it right, delivers returns virtually as good as guaranteed (it did an easy 100% last time from the 0.7p placing in the run up to the spud and I highlighted it as a favourite several times in the blog before that run).  Obviously, you never hold for the drill result.

Anglo African Oil & Gas (AAOG) announced the completion of the sale of Tilapia to Zenith Energy (ZEN) for £200,000.  AAOG now is a shell and has six months to do some kind of transaction.  Either they’ll put some old failed project into it, or perhaps something new.  The deal actually is less important than people might think, because where the share price goes from here short term will depend primarily on the structure of the financing.  What is more or less certain, though, is that even in its new form, renamed with a new deal, new investors will end up losing 95%+ of their investments, just as I warned they would last time.

Jersey Oil & Gas (JOG) announced final results.  Net discovered and recoverable resource estimates have increased to more than 120 million barrels of oil equivalent.  Their year-end cash position was £12.3 million, with no debt and they’re fully funded through concept selection and to at least the end of 2021.  With a market cap of £15 million, it’s not expensive for those who like these types of companies.

Predator Oil & Gas (PRD) announced final results.  The main upcoming project is their Morocco well, in respect of which they remain “drill-ready” awaiting the lifting of COVID restrictions.  They’re financed for that having conducted a placing at 4p, significantly more than the current share price, but the last convertible loan note conversion was done at 1.329p and there’s a lot more outstanding still to be converted.  It could be profitable, but it’s one to be careful about.

Aminex (AEX) issued a farm-out update.  $2.2 million taxes need to be paid before the farm-out can be approved.  To that end, they’ve arranged a further loan to cover it.  Whether this will be the end of the bureaucratic hurdles remains to be seen, but if they can pull it off, there could be some significant rewards here.

Now, if you want to know how to avoid disaster and losses with many of these companies and at the same time learn my methods for making money in the markets, which perhaps are a little different to most, it’s all in the Special Trading Course, where I’ve just finished writing the final part.  I’ve written down all my observations about these markets and companies, the issues with the bad ones and how to make money with those that look certain to perform.  I think most, even those with experience, will find it useful.  In fact, I’m certain that it will be really helpful, so for a limited time, you can receive the first part of the trading course for FREE.  Read it, see what you think and if it’s not for you, you can cancel with the click of a button and pay nothing.  Special link for blog readers and podcast listeners is https://www.oilnewslondon.com/free 

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.

Weekly oil news round up by Oilman Jim – IGAS UKOG RKH NVPT PMO ZEN AST ROSE COPL EUA SLE AEX SOLO UJO RBD PTAL LEK 88E BPC I3E

I mentioned on Wednesday the number of companies referring to being protected by hedges covering future production and, on the other side of these, the example of airlines who buy fuel forwards.  They’re looking at paying out hundreds of millions now on these hedges, which wouldn’t be a problem if they actually were buying and using an equivalent amount of fuel bought at the new lower market price, since that hedged price was what they were basing all their forward pricing calculations upon.  There was some interesting information last week regarding demand in Spain as pipeline CLH is publishing its data and offering a unique view on lockdown impact.  Petrol is down 75%, diesel is down 55% and jet-fuel is down a massive 93%.  You can see the size of the problem.

Another matter which I’m not sure everyone is aware of is that with massive oversupply and lack of storage, producers aren’t getting anything like the prices you see on your screen.  That’s why so much production now is being shut in.  If you’re at the end of a dirt road somewhere in the middle of the US with a few stripper wells, you’re maybe receiving a couple of dollars a barrel and without a disposal well, you could be paying even more to have the water hauled away.  Back in the UK, you can see the benefits for the operators from the numbers in Friday’s IGas (IGAS) announcement: shutting-in 600 barrels of oil equivalent per day has a positive impact on their cash flow of £250,000 a month. 

Moving on with the company news and I’ll focus on the more interesting announcements, good or bad, UK Oil & Gas (UKOG) announced a £1.275 million placing at 0.2p.  There’s still £2.325 million outstanding on the convertible loan notes, so the share price could be going even lower yet.  The oil price is a big damper, but the problem also now is investors not wanting to finance a CEO who they see as having his snout in the trough, taking three quarters of a million a year, enjoying large “bonuses” from a severely loss making company.

Rockhopper Exploration (RKH) issued a Sea Lion farm-in update.  Despite the current oil price weakness, Navitas Petroleum (NVPT) (Tel Aviv market) remains committed to the finalisation of the definitive farm-in agreement.  They’re targeting late Q3 or Q4 for the Falkland Islands Government to approve Navitas becoming a licencee and Premier Oil (PMO) will fund Rockhopper’s share of the remaining pre-effective date costs.  There is no guarantee this will complete, but in the current climate, it’s all looking relatively positive.

Desperate times for those companies which don’t really have any assets.  Zenith Energy (ZEN) is now trying to jump on the Coronavirus bandwagon and sell PPE to Africa.  I said on Wednesday that it would just be another excuse for them to raise cash and lo-and-behold the very next day they announced a £540,000 placing.  Ascent Resources (AST) must have given up on getting the £200,000 out of the disgruntled investor in the 5p placing.  The litigation funding update didn’t work, so they tried a memorandum of understanding announcement and pulled in the necessary £200,000 at 2.75p per share instead.  Rose Petroleum (ROSE) has suspended its acquisition of a 2% stake in a US shale gas unit, but has compensated by developing a series of proprietary tools for use in evaluating assets, “demonstrating the value Rose brings to potential investor and industry partnerships” they say.  It’s quite pathetic really.  Canadian Overseas Petroleum (COPL) announced a £2 million equity placing and equity sharing agreement on Thursday.  It’s already trading substantially below the 0.07p placing price and I guess the RiverFort “Equity Sharing Facility” will bring the share price down further.  I’ll also mention Eurasia Mining (EUA), which although not an oil company (none of these ones are either) fits well into this section.  It’s suspended already, now has lost its NOMAD and will be delisted on the 29th unless it finds another.  This is the regular fate of these types of companies and the result is that you lose all your money.  I’d strongly suggest the special trading course for those who want to understand what’s really going on at these companies and how to actually take money out of these things.  Link is https://www.oilnewslondon.com/trading

Back to the news, Aminex (AEX) and Solo Oil (SOLO) announced the extension of their Tanzania licence.  AEX can now proceed with its farm-out and SOLO can continue to explore its value realisation options.  Good news also for the shareholders of Union Jack Oil (UJO) and Reabold Resources (RBD), both of which announced a positive decision from the environment agency in respect of the testing of the West Newton A-2 well.

PetroTal (PTAL) appears to be in a bit of mess now and it would be interesting to see their most recent financial statements.  Unfortunately, they are playing the Coronavirus card to postpone release.  Absent a strong oil price recovery, I think we could be seeing a placing here.  Meanwhile, Lekoil (LEK) has restructured its financial obligations to Optimum and lives to fight another day.  They’ve agreed a more manageable payment schedule of $1.0 million on or before 15 July 2020, $2.0 million on or before 30 September 2020 and $4.6 million to be paid on or before 30 November 2020, but I think a fundraising is inevitable.

In contrast, San Leon Energy (SLE) actually is making money from its business, not just from selling shares, and is returning some of it to shareholders, this time in the form of a special dividend of 6p per share.  You could have bought SLE for 11p just over a month ago.  It will still have £59 million left though, with a lot more cash expected to come in, and they continue to pursue growth opportunities, which are prevalent in the current market.

88 Energy (88E) didn’t take too long to get going again after its recent duster.  They’re making an offer for XCD Energy, an oil exploration company with operations on the North Slope, to create an Alaska-focused entity with three project areas.  I mentioned 88E as a favourite in the blog several times last year around 0.7p and it gained over 100% in the run up to the drill.  It’s a stock promotion, but one that you can make money from.  It will get interesting again when it announces the next fully-funded new drill.

Bahamas Petroleum Company (BPC) could have been financed itself by now, but got greedy and now they’re converting part of a convertible loan note at 1.17p per share.  Difficult to know whether they can pull this back together.  I3 Energy (I3E) is in a similar boat, having lost focus, gone off at a (misguided) tangent and now is at the mercy of its noteholders.

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 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 I write about are telling the truth.

Contact me on Twitter @Oilman_Jim

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The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research.  This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.