Gulf Keystone Petroleum Limited, Borders & Southern Petroleum plc and Diamondback Energy Inc are all in focus this week.
Oil prices have remained strong this week: Brent crude for February delivery was down 0.6% to $110.42 per barrel on Friday, while WTI crude was up 0.6% to $93.25 shortly after US markets opened on Friday. US Natural gas prices have fallen once more, and gas for February delivery was down by 1.5% at $3.27/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 rise by 0.2% so far this week, leaving them trading at $33.93 shortly after US markets opened on Friday. The United States Natural Gas Fund (NYSE: UNG.US) has followed gas prices down and was 0.1% lower at $18.38 at the same time.
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 over the last month.
Gulf Keystone Petroleum
Gulf Keystone Petroleum (LSE: GKP) has gained 23% to 219p so far this week, following news that fellow Kurdistan oil explorer Genel Energy has started to export oil directly to Turkey -- the first time this has been allowed. The move raises hopes that a larger-scale deal for exports will soon be agreed and that the current backlog of payments due to the producers by Iraq's central government will soon be cleared. Investors are also hopeful that Gulf Keystone's legal dispute over the ownership of part of its Shaikan find will soon be resolved -- the court case is due to conclude later this month.
Borders & Southern Petroleum
Borders & Southern Petroleum (LSE: BOR) has gained 24% to 24.5p over the last five days, as investors have shrugged off sabre-rattling efforts by the Argentine President Christina Fernandez de Kirchner, who has recently made calls for the Falkland Islands to be returned to Argentina. Borders hasn't issued any news recently, however, and this latest gain simply takes the share price back to the level covered by Borders' net cash.
Diamondback Energy (NASDAQ: FANG.US) has climbed 23% to $21.63 over the last month. This $800m oil and gas firm only floated on the Nasdaq in October but already trades substantially above its initial public offering price of $17.50. Diamondback is forecasting production of between 7,200 and 7,500 barrels of oil per day in 2013 from its assets in the Permian Basin in West Texas.
Oil and gas shares are always volatile, and this week's winners could be next week's losers. To learn more about how to select oil and gas shares with the potential to deliver outstanding multi-bagging profits, I strongly recommend you download the latest special free report from the Motley Fool, "How To Unearth Great Oil & Gas Shares". It's completely free and includes suggestions that could help you to pick winning shares and minimise your risks. Hurry though, this new report will only be available for a limited time -- so click here to download it today.
> Roland does not own shares in any of the companies mentioned in this article.