Shares in oil and gas company IGAS (LSE: IGAS) have fallen by around 5% today after it released its third quarter results. Disappointingly, it has gone from a net profit of £5.2m at the same stage of the previous year to a loss of £44.8m as a result of declining revenue and significantly higher asset impairments.

Both of these issues have been prompted by a lower oil price, with IGAS’s average realised price falling from $94 per barrel to $58.9 per barrel, while impairments of £1.6m in the first nine months of the previous financial year increased to £48.1m in the current financial year.

In response, IGAS has reduced operating costs by 25% and has sought to strengthen its balance sheet through the farm-out to INEOS. It’s also expecting to spend only £6.9m on capital expenditure this year as it seeks to improve its cash flow at a time when the prospects for the oil price remain somewhat uncertain.

Although IGAS appears to be adopting a sound strategy through which to overcome its present difficulties, it may be best to watch rather than buy the stock. It may have a price-to-book (P/B) ratio of just 0.5, but there seems to be scope for further writedowns ahead that could hurt investor sentiment over the short-to-medium term.

Shares on fire

Also reporting today within the resources space was Firestone Diamonds (LSE: FDI). Its shares have risen by 14% as it stated it’s fully funded until its flagship mine in Lesotho commences production in the fourth quarter of the year. In fact, as at the end of 2015, the Liqhobong diamond mine was 61% complete and remains within its budget. So, while Firestone recorded a slightly wider loss in the first half of the current financial year ($4.6m versus $4.4m from the previous year), the market seems to be optimistic regarding its future prospects.

Clearly, Firestone is highly dependent upon the price of diamonds and it therefore could be viewed as a relatively risky play. However, with it having relatively sound finances and the potential to deliver improved financial performance over the medium term, investor sentiment could pick up and push its share price higher. As such, for less risk-averse investors, Firestone Diamonds could be worth a closer look.

Ups and downs

Meanwhile, Rio Tinto (LSE: RIO) continues to be a highly volatile stock, with its shares having been up by as much as 13% and down by just over 20% from their 2016 opening price. This level of volatility looks set to continue since the market is extremely sensitive towards changes in the price of iron ore, with the commodity making up the majority of Rio Tinto’s profitability.

With Rio Tinto having adopted a sound strategy in response to the low iron ore price, which includes cutting costs, reducing capital expenditure and mothballing major projects, it appears to be well-positioned to survive the current challenges which the industry faces. And while its recent decision to cut dividends is disappointing in the short run, it should allow the business to become even stronger and to emerge from the present difficulties in a better position relative to its peers. As a result, Rio Tinto continues to be a top mining major for the long haul.

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Peter Stephens owns shares of Rio Tinto. The Motley Fool UK has recommended Rio Tinto. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.