Share Talk Small Cap Review Week Ending 4th July 2021

88Energy Ltd (LON:88E), which is riding high following positive results from its Merlin-1 well in Alaska at the end of June, had another good week.

Despite strong competition from other companies in the sector, the stock topped the weekly small company growth rankings. The share price more than doubled after the group completed the sale of its oil reserves and tax credits in Alaska and used the proceeds to pay down outstanding debt.

The publicly-traded company is currently debt-free and has a cash balance of approximately A$14.8 million.

Hurricane Energy PLC (LON:HUR) has had a busy year, with this week seeing a welcome turnaround: the stock has been among the top performers, rising 72% after the High Court refused to approve the company’s controversial restructuring plan.

A spokesman for Crystal Amber, an activist fund that owns about 14.7% of Hurricane, called the court’s decision “a victory for shareholders, large and small, who have faced the fact that their legal rights have been violated.”

Crystal Amber withdrew its request to convene a general meeting to vote on the proposed restructuring and all of Hurricane’s non-executive directors resigned from the board with immediate effect.

Rounding out the oil and gas stocks, i3 Energy PLC (LON:I3E) came in third place among the smaller companies, with a return of 55%. The company was “very pleased” with the results of the first Marten Hills Clearwater well in Canada.

Eight horizontal lateral sections were successfully drilled in this well and the work was completed on time and on budget, says an i3 operations report.

All lateral wells drilled encountered clean Upper Shore sandstones with porosities ranging from 24% to 27%, and the presence of oil throughout the well is evidenced by oil slicks in the cuttings. The rig has moved to the second well in the Marten Hills Clearwater 02-12-075-26W4 drilling program, which is scheduled for completion in mid-July.

In the mining sector, IronRidge Resources Limited (LON:IRR) has convinced Nasdaq-listed lithium exploration and development company Piedmont Lithium Inc. to fully fund and accelerate production at the Ewoyaa lithium project, part of IronRidge’s lithium portfolio in Cape Coast, Ghana. The shares soared 38%.

Outisde of the resources sector, Cambridge Cognition Holdings PLC (LON:COG) has clearly had a bright idea. Shares soared 55% after the company announced the spin-off of Monument Therapeutics, a drug development company that uses digital phenotyping to treat central nervous system diseases.

Cambridge Cognition has been a Monument Therapeutics incubator since 2018.

The week’s biggest loser was Tricorn Group PLC (LON:TCN), the pipe handling specialist, whose shares fell 29% to 6p after results for the 18 months to the end of September 2020 revealed further details of the “failure of control and oversight of the finance function” during that period, which chairman Andrew Moss described as “extremely disappointing”.

The group entered the current fiscal year with confidence, but warned that the impact of COVID-19 and delays in the supply of imported materials will continue to put pressure on labor costs and related productivity in the near term.

Bidstack Group PLC (LON:BIDS) raised £10.86 million to fund the development of a new platform for its native in-game advertising technology, which it believes will accelerate the growth of this type of advertising.

At the IPO, almost 500 million shares were sold at 2 pence each, a third less than the previous day’s closing price. So it is not surprising that the shares have fallen 25% this week, to 2.175 pence.

7digital Group PLC (LON:7DIG) was another tech stock hit; shares fell 24% to 0.975p after the company, which operates a cloud-based music app platform, reported a £1.4 million loss for 2020 on revenue down to £6.5 million from £9.3 million in 2019.

“The revenue momentum from late last year has continued into 2021, leading us to expect significant year-over-year revenue growth and positive EBITDA for the full year,” said Paul Langworthy, CEO of 7digital.

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