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Please note that commentary on the weekly oil/gas/helium exploration news is over at Exploration News (click on the link to read it and subscribe if you haven’t already). I also list there which of the companies issuing news during the week I’m investing in.
Some other companies also caught my eye, for various reasons:
Pantheon Resources (PANR PTHRF) has been on a roll since the NSAI report was announced. Nothing in the report changed anything for anyone familiar with the company, but what has changed is the meaning of contingent resources with a brand new crowd of Pantheon enthusiasts (or perhaps just a group with a bank of phones?). That contingent resources are recoverable resources now appears to be message board dogma, missing out of course the critically important word “potentially.” Many now even describe these contingent resources as reserves and a billion barrels of oil as the independently verified number. I warned on 18 June that the report undoubtedly would be grossly misrepresented by those touting the stock and it was likely a significant promotion was coming up. So it has turned out to be.
How high it will go and how far it will fall is unquantifiable without knowing the minds of the group behind it, thus anyone wanting to get involved in this “play” might be better off and exposed to less risk via Pantheon’s next door neighbour, 88 Energy (88E EEENF), which is likely to benefit tangentially from the PANR ramp and upcoming flow test. Not announced by RNS, only communicated via Pantheon’s X (Twitter) account on 19 September “The All-American Oil Rig 111 is currently preparing to be mobilised and is expected to arrive onto the Alkaid-2 location later this week!” so presumably it has already arrived and the flow test will soon commence. Back to 88E, it’s financed via a recent £4.1 million placing and rights issue and its Hickory-1 flow test to assess 647 million barrels of oil resources is said to be set to commence as early as possible in Q1 2024. Market capitalisations are £288 million for PANR and £77 million for 88E.
I wrote last week about post well result share price performances at Beacon Energy (BCE) and Predator Oil & Gas (PRD). Beacon had started the previous week with a well update, released before market open on the Monday. The announcement had been highly positive, stating that the well had encountered an excellent 34-metre gross interval containing 28 metres of oil-bearing net reservoirs, 25 metres higher and 10 metres thicker than prognosis, with porosities averaging from 18% to 21% and with no water-bearing sands in the hydrocarbon column, resulting the company claimed in a material upgrade to recoverable reserves and a de-risking of a further 2.4 million barrels of contingent resources. Better yet, based on these excellent reservoir properties and the light oil recovered, analysis was said to indicate that an initial production rate in excess of 900 barrels of oil per day could be achieved, which might even be conservative. Surprisingly for investors, the share price then started to fall on large volumes as a 0.15p placing (eventually announced after market close on the Thursday) apparently was forward sold all the way down from 0.277p. The same appeared to have happened previously with Predator, whose share price reached a high of 21.5p in July following a positive well result for MOU-4, but again went downhill from there as heavy selling kicked in with an 11p placing apparently being forward sold. There were chances for significant gains here though for those who sold after the well result and didn’t get greedy. Remember, the greedy ones are those who the experienced market operators are targeting.
The recent Helium One Global (HE1) placing also upset many. The share price was rising nicely as the spud approached, from a low of around 5p prior to the rig purchase announcement up to a high of over 10p before a 6p placing to finance a second drill apparently began to be forward sold. At least this one is having a little time to churn, unlike Invictus Energy (IVZ.AX), which last week announced a A$0.15 placing at a 25% discount simultaneously with the well spud announcement.
Noble Helium (NHE.AX) is another company drilling for helium in Tanzania parallel with Helium One. Both have two drills with first spuds imminent. I was asked last week which one is better. The questioner probably is thinking about the commercial merits of the companies, but as I keep pointing out, whether in the newsletters or writings such as the Core Information section of the website, for shareholders in these small public companies, their personal profits are going to be much more dependent on the financial structures in place and to be put in place, plus the effectiveness of the promotion of the company. Often, there can be greater profits for shareholders from a project that fails than one that succeeds. Many have problems accepting this, but once you do, it becomes much easier to make money.
For all the rest of the news and there’s quite a lot of it this week, visit Exploration News. And remember to check out Trading Keys for the key trading metrics on these and many other companies.
The Private Letter will be sent out as usual this evening. Check it out too. There’s more about me on the About page.