BP plc (LON:BP), BowLeven PLC (LON:BLVN), Borders & Southern Petroleum plc (LON:BOR) are all in focus this week.
Oil prices have made steady gains this week: Brent crude for March delivery was up 2.5% to $116.05 per barrel on Friday afternoon, while WTI crude was up 0.7% to $96.70 shortly after US markets opened on Friday. US Natural gas prices have slipped, and gas for February delivery was down 1.2% at $3.35/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 edge higher by 0.7% to $35.01 this week. The United States Natural Gas Fund (NYSE: UNG.US) has also slipped downwards and was 3.6% lower on the week at $18.80, when US markets opened 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 over the last month.
BP (LSE: BP) has gained 10% to 469p over the last month, outperforming the 5% rise in the price of Brent Crude. On Wednesday BP confirmed that the Louisiana Court presiding over its case has accepted the company's plea offer to pay $4 billion to settle all federal criminal charges against the company relating to the Deepwater Horizon disaster. BP still has to resolve further charges of negligence under the Clean Water Act. There was more good news on Thursday, when BP announced that production had begun at its PSVM project, off the coast of Angola. Production is expected to ramp up to 70,000 barrels of oil per day and should reach a plateau of 150,000 barrels of oil per day in 2014.
BowLeven (LSE: BLVN) has climbed 11% to 71p this week, following the company's latest drilling results. BowLeven said that its IM-5 well, which is off the coast of Cameroon, had found a net pay interval of between 52 and 56 metres, with preliminary data suggesting a good quality reservoir containing liquid-rich hydrocarbons. IM-5 has not yet reached target depth and BowLeven says that "initial indications" suggest that the target Middle Isongo reservoir will also be hydrocarbon bearing -- further news is expected towards the end of February.
Borders & Southern Petroleum
Falkland Islands explorer Borders & Southern Petroleum (LSE: BOR) is up 10% to 26p this week, extending its gain over the last month to 35%. The company, which disappointed investors when its Loligo and Darwin wells failed to find oil late last year, announced that further analysis has revealed that its Darwin discovery "contains a relatively high liquid content", with a mid-case estimate of 190 million barrels of recoverable condensate liquid. Borders & Southern said that an independent consultant had concluded that Darwin could be commercially viable at an oil price of between $65 and $85 per barrel, depending on the quantity of liquid that was recoverable. Further appraisal drilling is now required to confirm recoverable volumes.
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> Roland does not own shares in any of the companies mentioned in this article.