Falkland Oil & Gas (FOGL) has acreage in the North and South Basin of the Falklands, will by 2015 be drilling more fully funded wells than any other Falkland oil company come 2015 – as highlighted by Red Evans HERE – and its shares could treble. Here’s why.
A comment earlier by my colleague Gary Newman, in his excellent write up of Xcite Energy (XEL), made me think about the Falkland Islands’ explorers. I know Gary regards most of these as speculative punts. He tends to prefer stocks with proven reserves, which are producing or are on the cusp of production. However, his point about buying AIM-listed oil stocks when there is little news and interest is a very good one. Most people have followed the Falklands’ story over the last decade and most will be aware that the share prices of the various companies involved haven’t done much for two years. This could all be about to change, as we enter the final six months before the next, long-awaited drill campaign.
Our very own ChrisOil met up earlier this week with a leading fund manager with a penchant for oil stocks in his small cap portfolio…this guy does not hold back. Chris writes:
Today Falklands Oil and Gas (FOGL) released its Final Results, and said that 2013 marks a year of quiet but very significant achievement for the company. In fact it has been a transformational year.
Small cap oil companies have taken a thrashing from the market since 2011. Many companies have seen their share prices slashed by 60 or 70% during the past 3 years. Investors have had a torrid time and many are capitulating and fleeing the market altogether. There is no hiding the fact that the retail investor favourites have been the hardest hit of all. Many of these investment have simply failed to live up to the promises of management.
Perhaps I am being a bit unfair saying sell. Today’s news of the final acquisition of 3D seismic across its Northern Area Licenses, by Falkland Oil & Gas (FOGL), does represent tangible operational progress. If you are a holder of this stock for the long run (usually a terrible idea for AIM oilies, but never mind...), you might even be encouraged. However, it was the subtle dropping of any reference to a drilling campaign in 2014, which makes me believe this stock will now go down before it goes up materially.
Falkland Oil & Gas (FOGL) has really been a company built on the enormous anomaly that is the Sealion prospect. The shares were once 100p but are now 23.75p. I note that a NED – Mr Hudd - bought 70,000 shares today and you should follow suit.
Broker Fox Davies has issued a short note on Falklands Oil & Gas (FOGL) following this morning’s update on its seismic programme. It writes:
Commissioned researcher Edison has published a detailed report on Falkland’s oil explorer Falklands Oil & Gas. Although its tone is generally upbeat it warns that the stock is likely to trade at a discount to net cash for some time.
Shares in all of the Falklands oil plays are ahead today thanks to a presentation by Border’s & Southern (BOR) which seems to have excited a few folk although to me it seems to contain a lot of ifs and jam tomorrow. I remain bearish on that stock but even more so on Falklands Oil & Gas (FOGL) , shares in which are 3% ahead on the Borders hype at 32.5p. I have been a long time bear of this company and would regard this temporary spike as an ideal cue for shareholders to get out for reasons that I explain below.
Falklands Oil & Gas (FOGL) has today published a pretty disastrous statement on results from its Scotia well. The shares have plunged to 37.5p. I am sorry for those who have lost money but I warned folks to sell this at 67.5p on 19th July and again at 69.5p on 17th September. I also warned folks to bail out of fellow Falklands Play Borders & Southern (BOR) at 32.5p on August 27th. Its shares are now 16.875p. Those siren calls were greeted with hoots of Bulletin Board derision, I am not expecting any apologies or praise today. Perhaps the BB loons will not take note of the new situation today
