In today’s update, Jim covers the companies he is interested in and what is catching his attention this week.
Chariot Oil & Gas announced its first half results. The 30 June cash position was $12.1 million, with no debt and all commitments fully funded. The market capitalisation by comparison is £14 million, so you’re not paying much for their licences in Morocco, Brazil and Namibia. The Lixus licence alone has audited total remaining recoverable resources in excess of 2 trillion cubic feet of gas. They’re looking to farm out all these licences and given their ability to farm-out prospects previously there is big upside here.
Independent Oil & Gas announced its interim results. They’ve set out their future news flow which will include: completion of Farm-out to CalEnergy Resources; First Investment Decision and commencement of Core Project Phase 1 project execution; Full Harvey appraisal well results; and CalEnergy Resources option to farm in to Harvey. I’m starting to warm towards Independent Oil & Gas and it’s also encouraging to see Lombard Odier keep buying too.
Borders & Southern announced results for the six months ended 30 June and the company is now actively pursuing a farm-in partner for its Darwin project. Industry reach has been extensive and they continue to present what they say is their robust technical and commercial proposition to new companies. If they can pull off a farm-out of their Falkland’s licences, the potential is huge. The market capitalisation is just £7 million, but assets in the balance sheet are over £296 million
Bahamas Petroleum Company announced interim results. They’ve entered into a framework agreement with Seadrill for the provision of a rig in the first half of 2020; they’ve appointed Halliburton for integrated well services and BakerHughes for provision of various well-related equipment. There’s a £10.25 million conditional convertible loan note to underpin finance necessary for the drilling of the well if required, and additional finance sources being evaluated. They say the farm-in process continues. To give them insurance, they’ve now got AGM approval for the temporary authority for issue of new shares to further contribute to the financing of drilling, if required. I said last weekend that the most likely outcome here is a large discounted placing and that the shares were looking expensive. Now they’ve come off quite a bit since then ( the market cap was ,£41 million a week ago, it’s £32 million now), but it still looks expensive on an un-financed basis. I do think it could be interesting once the fund raising is done, so it’s one very much to keep an eye on
Lansdowne Oil & Gas announced Interim Results. As they stated, “The key issue facing the Company is the delay in the delivery of the loan funds from APEC, as called for under the Farm-Out Agreement.” The last extended backstop date is this Monday and it won’t be looking good for them if the cash has still not arrived. Same applies to Providence Resources too.
Anglo African Oil & Gas issued its Half-year Report. Well re-entry operations have started and with an operational team in place and a funding package finalised, they’re now concentrating on signing a rig contract for the sidetrack into the Djeno. Difficult to know what’s going to happen here, but it’s always worth keeping an eye on.
Reabold Resources released Interim Accounts showing average production in California of 42 bopd in the 1st half with operating costs running at 56% of revenue. They claim production of 142 boepd for July & August, but how much is gas, which in the US is really worth very little? And unlike the first 6 months of the year, they didn’t state oil production. Finally, why did they disclose only 20 bopd net as current production in their September RNS? Other questions asked by me in July regarding the £3 million offshore purchase of the California earn-in agreement also are being asked by others too, so let’s see if the answers come out now.
I’ll be back mid-week with more on the podcast.
In the meantime, all the small-cap oil companies are covered in the Sunday blog and daily on Twitter.
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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.
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