Why Are Green Dragon Gas Ltd, Falkland Oil and Gas Limited & Range Resources Ltd Rising While Oil Falls?

Green Dragon Gas Ltd (LON: GDG), Falkland Oil and Gas Limited (LON: FOGL) and Range Resources Ltd (LON: RRL) are all picking up.

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The price of oil is still slipping, with Brent Crude dipping to a fraction over $49 per barrel as the week starts. But some smaller oil and gas explorers and producers are bucking the trend with share price rises.

Chinese gas

China-based Green Dragon Gas (LSE: GCG) released interim results on Monday, and pleased the punters by reporting increased revenues and a reduced first-half loss. Revenue was up 8% to $16.8m, while the firm’s net loss from continuing operations was slashed by 98%, from $69.3m in the first half of 2014 to just $1.4m.

Capital expenditure was up, from $7.8m to $19.4m, but the company stressed that was in line with its “focus on infrastructure investment and drilling to deliver increased production“.

The share price had fallen 38% over the past 12 months, but it picked up 2.75p (1%) on the day to take the thinly-traded shares to 295p. And looking forward, Green Dragon is forecast to produce its first profit this year, with earnings of around 30 per share expected, rising to 9.5p in 2016 — that would give us a two-year-out P/E of 30, but at this stage such valuations don’t mean a lot.

Falklands riches

Over in the Atlantic, Falkland Oil and Gas (LSE: FOGL) has been delivering good news over the past few months with expectation-busting oil finds at Isobel Deep in the North Falkland Basin — the company has a share in a resource that could extend to a billion barrels of recoverable oil.

The problem is that it will still be some years between discovery and actual production from these fields, and there’s a lot more money needing to be invested before the profits start to flow. But with the partnership of Falkland Oil and Gas, Rockhopper and Premier Oil attracting positive sentiment, and the short-term price of oil not being representative of eventual revenues, the share price ticked up 3% on Monday to 24.75p.

Rocky ride

Range Resources (LSE: RR) has had a troubled year, with its share price suspended for some of it for technical reasons. When trading resumed in June the price shot up, but it’s since slumped back again to around the suspension price after a trading update on 7 August revealed an 8% fall in production from the firm’s Trinidad operations.

But the fallout from that looks like it might have subsided, and on Monday we saw a modest rise of 2.3%, to 0.53p per share. Range Resources is well funded for its planned drilling, but one problem for investors is that there are no forecasts available for this year, and forecasts for a very small profit for 2016 are a little out of date. It’s risky, but if it comes good the rewards could be significant.

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 assessed. Consider taking independent financial advice.

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

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