The Parkmead Group (LSE: PMG), Serica Energy (LSE: SQZ) and Bonanza Creek Energy are under the spotlight this week.
Economic uncertainty and strong inventories have weakened oil prices this week, especially in the US. Brent crude on the December contract was down by 0.8% on the week at $109.50 per barrel shortly after US markets opened on Friday, but WTI crude fell further, opening down by 4.4% on the week at $85.80 on Friday.
Natural gas for November delivery also fell and was down by 6.4% on the week at $3.38/mmbtu when US markets opened on Friday.
Many investors prefer to invest in commodity ETFs rather than directly in futures, and the United States Oil Fund (NYSE: USO.US) was down by 4.7% on the week at $31.83 when US markets opened on Friday. The United States Natural Gas Fund (NYSE: UNG.US) was also down by 4.7% and opened at $22.02 on Friday morning.
The nature of oil and gas companies' businesses means that they can succeed or fail regardless of oil prices. This week's risers have all outperformed the price of oil by a big margin in this week.
The Parkmead Group
The Parkmead Group (LSE: PMG) climbed 23% to 15.9p this week. It emerged as the biggest winner in the UK Continental Shelf 27th licensing round, gaining six new licences with interests in a total of 25 blocks in the North Sea. Parkmead investors are also hopeful that the current Spaniards East Well, in which Parkmead has a free-carried interest of 12.6%, will live up to expectations. Drilling started last week and is expected to complete in late November.
Serica Energy (LSE: SQZ) has gained 26% to 30.6p over the last three months, thanks to steady progress and a succession of farm-in deals with bigger oil companies that are seen to have de-risked some of Serica's assets. Most notable is its deal with BP (LSE: BP), to explore the Luderitz Basin in offshore Namibia. Serica has also announced farm-in deals for its Morocco blocks with Cairn Energy (LSE: CNE) and Genel Energy (LSE: GENL). Serica also has a 21% interest in the Spaniards East Well currently being drilled by Premier Oil (LSE: PMO).
Bonanza Creek Energy
Bonanza Creek Energy (NYSE: BCEI.US) has risen 41% to $24.23 over the last three months, as investors and analysts have taking bullish positions on the company, which is focused on onshore oil and gas in the US. Bonanza increased its production by 144% in the second quarter of this year, and the company's third-quarter results could prompt a further leap if results meet or exceed analysts' expectations.
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> Roland owns shares in Genel Energy but does not own any of the other shares mentioned in this article.