Oil Man Jim Company Oil & Gas Podcast, 5th October 2019
October 5, 2019
In today’s update, Jim covers the companies he is interested in and what is catching his attention this week.
It was a quieter second half of the week, but still a few pieces of news worth mentioning.
I3 Energy announced the spud of the Serenity SA-1. This is now stated to be an appraisal well and is expected to take four weeks.
Petro Matad announced the commencement of testing of Heron-1. Operations are expected to be completed this month.
Coro Energy and Empyrean Energy announced the Tambak-2 well spud. Total time to drill, core, log and test is estimated to be approximately 33 days, after which the rig is planned to move to the Tambak-1 location. The Tambak-2 well is primarily designed as an appraisal of the southern area of the Mako gas field and is a very large step out (over 13 km) south of the Mako South-1 location. It sounds more like an exploration well.
Anyway, all four companies should offer trading opportunities over the next month or so.
Zenith Energy announced results of its C-37 well. It came in at a maximum of 50 barrels of oil per day after a significant water cut, exactly the same as Block Energy's recent well next door in Georgia.
Bahamas Petroleum Company had a turbulent week. By Wednesday, it had collapsed to half of the price of two weeks ago when I said it looked overvalued. Thursday it issued a statement regarding potential fundraising denying any immediate intentions of undertaking an equity placing.
Shorts panicked and pushed the share price back up over 2p. Reality is it's very unlikely that they will be able to arrange a farm-out and in my opinion, it's only going to be possible to raise the funds for the well they have to drill with a very substantial equity placing. I think this will happen and at a much lower price, at which point I believe it's worth looking at.
Another company which is going to need a large placing is Tower Resources, which issued non-news last week I guess to excuse a price move up. TRP is another one that will be interesting post-placing.
Still, on the subject of placings, Reabold Resources also issued a statement regarding potential fundraising. It's in the process of taking indications of interest from investors with regard to an equity placing of between £20 - 24 million.
The same group that runs Coro Energy, Echo Energy and Sound Energy have taken Nu-oil & Gas as their next shell. There's undoubtedly a deal coming up, but with the group controlling a billion 0.05p placing shares and 5 billion more shares coming from a £2.5 million loan converting at the same 0.05p price, there's going to be a huge amount of stock coming out.
It all comes down to the strength of the deal coming in, but confidence in the group has been weakened by a poor choice of deals leading to large investor losses at Sound and Echo and NUOG is a pure bet on how high they can ramp it.
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.