Share Talk Weekly Small Cap Movers & Shakers, Saturday 10th September 2022

Fracking is a new way to boost oil and gas stocks, according to the call of the PM.

After weeks of speculation and rumours, Liz Truss was finally able to grant the go-ahead for fracking in the UK. This came after a three-year moratorium.

This was not surprising as it lit up the blue touch paper for junior companies that have onshore projects that could contribute to gas self-sufficiency.

Union Jack Oil up +38% was the week’s biggest mover, followed by Egdon Resources (+31%), UK Oil & Gas (+28%), Reabold Resources (+27%) and IGas (+27%).

A stampede in select stocks was triggered by speculation about the possible return of fracking ahead of Thursday’s announcement.

Egdon has risen 540% in the past year, while IGas has risen 666%, a good return for the hedge fund that Crispin Odey, a multi-millionaire investor, owns.

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The fracking ban has been lifted with the caveat that long horizontal boreholes, which are controversial, will not be permitted unless there is community support.

According to reports, protest groups are willing to reform to try to stop the kibosh plans. Stephen Bowler, chief executive of IGas, believes that the mood in villages and towns near these onshore gas projects is changing.

He stated that recent polling by YouGov had shown that local residents support shale development in areas where it can provide real benefits to their community, such as reducing their bills.

“We will collaborate with local communities to provide this resource in the near future and show that it is possible safely.”

Looking at the larger market, it was not immediately obvious if the City was mourning the passing of Queen Elizabeth II.

The AIM All Share rose 0.8% Friday to cap a strong performance by the small-cap tracker.

Last week’s column discussed the rapid devaluation in stocks on the junior stock market. These stocks have fallen a combined 27% in the past year.

Cenkos Securities raises money to support London’s growth businesses. Julian Morse, the boss of the group, said that he felt the sell-off was excessive in an interview with Proactive after the interim results.

He stated that he believes small-cap equities have been incredibly oversold. But the sentiment is a powerful thing. Once the market is able to process how long it believes a recession will last, sentiment will begin to improve.

Investors in Clontarf Energy saw a return to normal with a bump (down 37% after the lithium-oil and gas explorer stated that there was no news to support the spike in share price last week, which jumped from (0.75p to 1.2p).

However, it did disclose that it was in talks with experts in lithium extraction and has entered into a joint venture in principle to test the brines at the Bolivian salt-lakes projects.

Investors in Inland Homes were hit hard this week. The company launched a strategic review after stating that it was on track to losing £37.7million over the year to September 30, and it had already lost 19%.

It hopes to force a land sale that will bring down the deficit for the full year to a slightly more acceptable £12.1million (pre-tax).

Stephen Wicks, the chief executive, will be retiring at the end of the month.

Finally, if you had invested in Wishbone Gold six months ago, you would have a 66% profit due to Australia’s exploration success.

The group did what every small-cap does, when it is making progress and adding value: it reached out to the market for additional funds to finance its continued work.

It is the owner of Red Setter, a gold-copper mine in Western Australia, and Halo in Queensland.

It raised just £2.4 million by issuing slightly discounted stock. The shares dropped around 18% over the week, but this was more technical than sentiment driven.


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