Cobalt International Energy, SandRidge Energy and Madagascar Oil (LSE: MOIL) are in the spotlight this week.
Oil prices slumped this week on fears that demand could fall in Europe and the US. Brent crude for January delivery has fallen 3.7% to $107.52 per barrel since Monday, while WTI crude was down 2.6% on the week at $86.50 per barrel shortly after US markets opened on Friday. US Natural gas prices recovered somewhat after last week's falls, and gas for January delivery was up by 1.3% on the week at $3.65/mmbtu shortly after US markets opened on Friday.
Many investors prefer to invest in commodity ETFs rather than directly in futures, and holders of the United States Oil Fund (NYSE: USO.US) have seen their shares fall 2.6% so far this week, leaving them trading at $31.72 shortly after the open on Friday. Strengthening natural gas prices have lifted the United States Natural Gas Fund (NYSE: UNG.US) by 2.1% so far this week -- the stock opened at $20.82 on Friday.
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 recent months.
Cobalt International Energy
Cobalt International Energy (NYSE: CIE.US) is up 22% to $28.50 this week, after reporting a major oil discovery at its North Platte prospect in the Gulf of Mexico. The find was described as "material" by brokers Goldman Sachs, and rumours are also circulating that Cobalt could be an acquisition target for Chevron, which has a sizeable cash pile and needs to boost production.
SandRidge Energy (NYSE: SD.US) has climbed 18% to $6.96 this week. The company, which has been operationally successful but struggled with financing and debt, has announced that it intends to sell its Permian Basin assets in West Texas. The proceeds will be used to pay down debt and fund activity in SandRidge's Mississippian Lime formation. One reason for the sale could be that SandRidge has recently come under pressure from major shareholders TPG-Axon Capital Management and Mount Kellett Capital Management to improve its performance.
Madagascar Oil (LSE: MOIL) has risen 18% to 21p since June. This firm is a London-listed junior oil that's involved in developing a number of oil and gas discoveries in Madagascar. The company is now working hard to bring these into production and expects to commence steam injection into its first production wells in the final quarter of this year, which should deliver first oil production.
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> Roland does not own shares in any of the companies mentioned in this article.