The oil and gas exploration sector has been a scene of carnage in recent weeks, with share prices plunging as oil gets cheaper and cheaper. And with Brent crude dropping to a new low of $63 per barrel, we’ve seen three more oilies slumping to 52-week lows:
Bowleven
Africa-focused Bowleven (LSE: BLVN) ended Thursday on a closing low of 25p, and has dropped even lower to 24.7p in morning trading today. That’s a loss of 43% since a 17 January close of 43.75p.
Bowleven is one of those at-risk explorers that is still in the net investment phase — that is, it’s not making any profits yet. The year ended June 2014 brought in a loss of 4 cents per share, and there’s a slightly smaller loss pencilled in for June 2015, so fear is understandable.
But in its full-year results announced in November, Bowleven told us that it had a cash balance of “circa $14m with $30m bridge facility undrawn and available pending farm-out completion although utilisation not anticipated“.
Rockhopper
Rockhopper Exploration (LSE: RKH) has been hit by the double-whammy of both oil prices and of being active in the so-far disappointing oil fields around the Falklands. It’s another that’s yet to turn a profit too, although the biggish losses of the past two years are expected to moderate.
Again, cash doesn’t seem to be a problem — at the end of its last full year in March, Rockhopper reported a cash balance of $247m.
The share price? Down 61% since January’s high, to 59p.
Genel
Genel Energy (LSE: GENL) is unique among these three in that it’s actually making nice profits. The largest independent oil producer in the Kurdistan Region of Iraq (KRI), Genel turned in revenue of $192m in the first half of 2014, from which it extracted a pre-tax profit of $70.7m. The firm is still in a net cash outflow stage of operations, but in early December Genel reported an “initial gross payment of $30 million from the Kurdistan Regional Government for oil exported through the KRI-Turkey pipeline“. Exports by pipeline now exceed 350,000 bopd.
Genel shares have still been hammered by the oil price, and are down 43% since January to 627p. That suggests a P/E of 17 for the year to December 2014, but with production and profits set to rise strongly in 2015, it would drop to just 10.
