President Energy (#PPC) sorts out its legal issues in Paraguay
- 2015-05-11 23:51:01
In Part 1 of this pair of articles I took a look at Gulf Keystone (GKP). In Part 2 I revisit two more of my picks from the summer, Bowleven (BLVN) and President Energy (PPC). With the outlook for oil prices as bearish as it is, is there much to be positive about for either stock?
What a fantastic RNS from President Energy (PPC). This morning, the company announced the first conventional oil discovery in the Paraguayan Chaco region, at its Lapacho exploration well. When I last wrote about President, eight weeks ago, I suggested there was “still all to play for”. And so it’s proved to be. Unfortunately, the timing of this news couldn’t be much worse.
I decided to wait before writing a response to President Energy’s (PPC) so-called disappointing well result at Jacaranda, a fortnight ago. These remain tough times for the small cap oil & gas sector. While some highly speculative stocks have seen incredible surges in their share prices, other, more established companies, with proven fields, have struggled in the market. President sits somewhere in between these two groups. It is far too early to class the company’s concessions in the Pirity Rift Basin, Paraguay, as commercial assets. This remains a very high-risk play. However, the result at Jacaranda appeared to take the company much closer to realising its ambitions. Or at least that was my interpretation of the fateful RNS.
I last covered President Energy (PPC) about seven weeks ago and suggested this could be one to follow the chairman, Peter Levine, in buying at 30.75p (the then mid-price). Since writing, President’s stock has risen to 37p, but not in a straight trajectory
Peter Levine, Chairman of President Energy (PPC), has a lot riding on the company’s success. After Tuesday’s purchase of another 250,000 shares, he now holds 19.38% of President’s stock. This is the second purchase by Mr Levine, at just over 30p, since the company’s deeply discounted placement in February. There is little doubt this fundraising did a lot of damage to sentiment toward’s President stock, but as the end of May approaches, and the company is due to spud the first of three exploration wells in Paraguay, will speculators be tempted to follow Mr Levine’s lead?
This morning, President Energy (PPC) announced that only 11.9% of eligible shareholders had participated in the company’s open offer to raise £4.3million. On its own, this update might have sounded pretty dire. Fortunately for President it had already secured £30.7million from institutions earlier in the month, so the announcement could have been much worse. Even so, the failure of the open offer is a blow to anyone who hopes for wider access to discounted placements.
It makes a refreshing change these days for the director of an AIM-listed company to put his hand in his own pocket rather than dipping it into the till!
President Energy (PPC) chairman Peter Levine has always been quick to support any fundraising and not just for a token amount, as you see with the directors of many other companies.
No sooner had I submitted my last piece to Share Prophets, which looked at the state of President Energy (PPC) after its awful fall, the company announced the price of its placement. Surprise, surprise it was at a deeper discount to the day’s already calamitous trade; 35p, 24% lower than yesterday’s close.
Why should placements automatically be discounted?
Shareholders in President Energy (PPC) might very well be asking themselves that very question this afternoon. Yesterday, President issued, what I thought was, a pretty bold statement of intent to raise money. Clearly the market disagrees with me and the stock is down 22%, as of writing.









