Shares in oil producer LGO Energy (LSE: LGO) have soared by as much as 50% today after it provided an update on its strategic review. LGO’s discussions regarding potential strategic investments in the business have progressed to a point where a non-binding term sheet has been signed with an institution for a $20m investment, with discussions ongoing to reach a possible binding agreement.

Discussions are also ongoing with other potential investors, as well as with LGO’s bankers, BNP Paribas. The latter is regarding a possible extension beyond the end of this month of the waiver on payments on the funds drawn down by LGO’s subsidiary.

Due to its precarious financial position, LGO has ceased all drilling activities and is attempting to conserve cash in the current low oil price environment. Looking ahead, the dual challenges of a continued low oil price as well as the challenging financial outlook which the company faces mean that LGO’s shares are incredibly risky.

Certainly, the company’s asset base is appealing and as today’s update states, the Goudron field in Trinidad continues to offer long term potential. However, with other oil and gas plays being in stronger financial positions and offering good value for money, there appear to be better risk/reward opportunities available elsewhere.

Also among the biggest movers in the oil and gas sector today is Nighthawk Energy (LSE: HAWK). Its shares have risen by 8% today despite there being no significant news flow released by the company. However, investor sentiment has been relatively buoyant in the last month owing to strength in the wider resources sector and also as a result of a positive production update from Nighthawk.

In fact, the company announced on 1 February that it expects total revenues for the full-year to be significantly higher than current market expectations. And with Nighthawk forecast to return to profitability in the 2016 financial year with a pretax profit of £6.6m, investor sentiment could continue to improve over the medium term following its share price rise of 39% in the last month. As such, it may be worth a closer look for less risk averse investors.

Meanwhile, shares in competition company Best of the Best (LSE: BOTB) (where entrants can win a supercar) continue to soar and have risen by an additional 10% today. This takes their capital gain to an incredible 250% in the last year and with a special dividend recently announced, they are due to yield over 8.5% in the current year.

The special dividend seems to have improved investor sentiment in Best of the Best yet further, with it equating to 19.5p per share, which works out as 7.6% of the current share price. It is being paid because the company feels that it has excess cash sitting on its balance sheet which will not be required for working capital purposes over the next year. And with the company being cash generative and having a relatively strong balance sheet, it appears to have a bright long term future.

With shares in Best of the Best trading on a price to earnings (P/E) ratio of 31.8, they seem to be rather expensive given that earnings growth of 13% is forecast for the current year. But further gains simply cannot be ruled out, since there is still significant online growth potential on offer.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.