Afren Plc, Hardy Oil & Gas plc, And Enquest Plc Plumb Fresh 52-Week Depths As Oil Slide Continues

Can Afren Plc (LON: AFR), Hardy Oil & Gas plc (LON: HDY) and Enquest Plc (LON: ENQ) survive low oil prices for long?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Another week, another price fall, and yet more oil & gas companies are slumping to 52-week lows:

Afren

Afren (LSE: AFR) shareholders have been through the mill, and when the company told us it had managed to claw back $17.1m from former CEO Osman Shahenshah and former COO Shahid Ullah, who had been sacked for taking unauthorised payments, sunnier days ahead might have been expected.

But the crumbling price of oil has killed off such hopes, as Brent Crude is now just a smidgen above $46 a barrel — this week it hit its lowest price for six years. A disappointing update on Afren’s reserves on 12 January didn’t help, and the share price lurched further down as a result. Afren has now crashed by 85% over the past 12 months, to a new 52-week low of 22.75p.

Hardy

Hardy Oil & Gas (LSE: HDY) has fared a little better, with a smaller fall of just 28% in 12 months. It’s been helped by a nice spike in June 2014 when full-year results were very upbeat about a likely trebling in natural gas demand in India and put a positive political slant on the country’s energy policy.

But the oil slump hadn’t started then and the black stuff was still selling for over $100 a barrel. Since the crash, Hardy shares have fallen to a 52-week low, of 55.2p, on Tuesday. And that’s seriously worrying for an oil explorer with no expectations of profit this year or next.

Enquest

Enquest (LSE: ENQ) scraped a new low on Wednesday, having lost 81% over the past year to just 21.5p, with the oil crash only being part of the reason — albeit a large part.

Prior to the downturn, Enquest was already facing delays in its North Sea exploration, where its approach of investing to extend the life of older oil fields will be under price pressure. North Sea exploration is relatively expensive at the best of times, and there won’t be many who can make a profit at sub-$50 prices.

As things stand, we’re looking at plummeting EPS expectations for 2014 and 2015, and a big rebound predicted for 2016 is of little comfort right now.

Will they survive?

Our big oil companies can easily sit out the storm, but if prices remain this low over the longer term there are a good few smaller explorers at serious risk of going under.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Afren. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Is another stock market crash on the way?

The US stock market has already crashed in 2022, losing 25% of its value at its June low. However, UK…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A 6.2% FTSE 100 dividend stock I’d buy to boost my income

This FTSE 100 dividend stock offers a yield well above the index average. Here's why I'd buy it to supercharge…

Read more »

Abstract 3d arrows with rocket
Investing Articles

2 beaten down FTSE 100 shares that look ready for liftoff 

With the UK market showing strong signs of recovery, I am considering these two overlooked FTSE 100 shares for my…

Read more »

Smartly dressed middle-aged black gentleman working at his desk
Investing Articles

3 top UK shares for August 2022 and beyond

I've been buying top UK shares since late June such as these three companies that look attractive right now.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

FTSE 100 live: the Footsie closes on 7,500

The Footsie, like many other global markets, has been pretty volatile in recent months, but today it almost closed above…

Read more »

Woman using laptop and working from home
Investing Articles

High-dividend stocks! Should I buy Royal Mail’s shares for its 7.3% yield?

The Royal Mail share price carries a dividend yield twice as large as the average for UK shares. Does this…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

UK shares: should I buy this oil and gas infrastructure stock?

Jabran Khan is looking for the best UK shares for his holdings. Could this oil and gas infrastructure provider fit…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

This REIT could be the perfect stock to supercharge my passive income stream!

Jabran Khan is looking for stocks to boost his passive income through dividend payments. He identifies one REIT to help…

Read more »