Gushing higher

Fossil fuel producer LGO Energy (LSE: LGO) has shot 7% higher in Wednesday business on the back of a positive operational update.

The London-based driller has received approval from authorities in Trinidad to perforate a new oil zone well at its GY-671 well in the Goudron Field, it announced. The zone is located within the Upper C-sands and covers a net pay interval of 208 feet.

LGO Energy added that its GY-50 well had been re-entered and logged to a depth of 2,428 feet, and that an application will now be lodged to perforate and complete 223 feet of new net oil pay across two producing zones.

And the energy producer completed a stunning hat-trick by advising it had also identified six additional extra wells, offering an opportunity to create further low-cost production by accessing previously-uncompleted productive zones.

LGO Energy certainly has the wind in its sails at present, the business also receiving shareholder approval in recent days to raise £28m through a rights issue. Still, the unpredictable nature of oil exploration — allied with LGO Energy’s still-fragile balance sheet — makes the business a risk too far, in my opinion.

Toast terrific returns

Drinking hole operator Punch Taverns (LSE: PUB) was last dealing 4% higher on Wednesday following a bubbly trading update.

At first glance the firm’s latest figures provide little cause for celebration: Punch Taverns saw pre-tax profit slump 84% between September and February, to £54.7m. However, the business put these results down to £288m worth of disposals during the past 18 months.

Indeed, Punch Taverns’ restructuring drive certainly appears to be delivering the goods — average profit per outlet rose 3% during the six months, with like-for-like net incomes across its core estate increasing 1.6%.

Punch Taverns is clearly a firm on the rise, and the City expects the firm to bounce from a 29% earnings dip in the year to August 2016 with a 28% rise the following year. I reckon a P/E rating of just 5.8 times for the current period represents a great level to latch onto the company’s improving growth story.

Recruiter on the rise

Recruitment specialist Servoca (LSE: SVCA) also lit up the leaderboards on Wednesday thanks to a 16% session-on-session rise.

The company advised in its latest trading update that “trading performance has shown excellent progress and results for the first six months will be significantly ahead of the corresponding period last year.”

Servoca announced back in December that its Healthcare and Education units continued to perform strongly, underpinning a 20% revenues rise in the year to September 2015. And the business hinted further acquisitions could be ahead to complement solid organic growth.

The number crunchers expect Servoca to enjoy a 15% earnings gain for fiscal 2016, leaving the business dealing on an ultra-attractive P/E rating of 10.6 times. And a sub-1 PEG reading of 0.7 underlines Servoca’s terrific value. I reckon the business could prove a very shrewd growth stock at current prices.

The post Should You Buy Servoca Plc, LGO Energy PLC & Punch Taverns plc Today? appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Royston Wild 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.

Somewhat brighter

Certainly, a more stable oil price has caused LGO Energy (LSE: LGO) to attempt to ramp-up production at its key Goudron field in Trinidad. In fact, it is aiming to increase production by around 200 barrels of oil per day (bopd) through two separate programmes. The first involves the restoration of production from a number of existing wells, which it is anticipated will increase production by 100 bopd within the next few weeks.  The second involves several well recompletions, and will cost around $150,000, but should also increase production by around 100 bopd.

This is clearly encouraging news for LGO’s investors, with the cost of the work set to be funded from existing cash resources. But while its future may now be somewhat brighter than a number of weeks ago (as reflected in a share price which is up by 35% in the last month), with the wider sector being cheap there appear to be better options available elsewhere.

Positive news

Also rising recently have been shares in Nighthawk Energy (LSE: HAWK). They are up by 169% in the last month, largely due to positive news flow. In fact, Nighthawk’s application for its planned Arikaree water flood enhanced oil recovery project was approved just last week by the Colorado Oil & Gas Conservation Commission. It is, of course, subject to Nighthawk obtaining 80% approval of the non-working interest owners within the next six months, which the company believes will be successfully obtained within the next few months.

This was positive news for the company and once the project is completed, it has the potential to significantly increase production as well as boost field reserve levels. Although Nighthawk remains a relatively high risk play, its shares could continue to rise and it may therefore be of interest to less risk averse investors.

Highly leveraged

Meanwhile, shares in Xcite Energy (LSE: XEL) have fallen by 26% in the last week, as doubts surrounding its financial viability continue to surface. While Xcite Energy has a strong asset base, with the Bentley field in the North Sea having long term profit potential, the company’s balance sheet remains relatively highly leveraged.

For example, it has around $134m of debt on its balance sheet which is due to be repaid in June of this year. With the company having no revenue, it is apparently seeking a financial partner but has been unsuccessful in doing so thus far. As such, investors appear to be concerned about its near-term prospects. With a number of other opportunities within the oil and gas space, it seems prudent to watch, rather than buy, Xcite Energy due to the relatively high degree of uncertainty surrounding it at the present time.

The post Is Now The Right Time To Buy These 3 Resources Stocks? LGO Energy PLC, Nighthawk Energy Plc And Xcite Energy Limited appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Peter Stephens 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.

Discussions are also ongoing with other potential investors, as well as with LGO’s bankers, BNP Paribas. The latter is regarding a possible extension beyond the end of this month of the waiver on payments on the funds drawn down by LGO’s subsidiary.

Due to its precarious financial position, LGO has ceased all drilling activities and is attempting to conserve cash in the current low oil price environment. Looking ahead, the dual challenges of a continued low oil price as well as the challenging financial outlook which the company faces mean that LGO’s shares are incredibly risky.

Certainly, the company’s asset base is appealing and as today’s update states, the Goudron field in Trinidad continues to offer long term potential. However, with other oil and gas plays being in stronger financial positions and offering good value for money, there appear to be better risk/reward opportunities available elsewhere.

Also among the biggest movers in the oil and gas sector today is Nighthawk Energy (LSE: HAWK). Its shares have risen by 8% today despite there being no significant news flow released by the company. However, investor sentiment has been relatively buoyant in the last month owing to strength in the wider resources sector and also as a result of a positive production update from Nighthawk.

In fact, the company announced on 1 February that it expects total revenues for the full-year to be significantly higher than current market expectations. And with Nighthawk forecast to return to profitability in the 2016 financial year with a pretax profit of £6.6m, investor sentiment could continue to improve over the medium term following its share price rise of 39% in the last month. As such, it may be worth a closer look for less risk averse investors.

Meanwhile, shares in competition company Best of the Best (LSE: BOTB) (where entrants can win a supercar) continue to soar and have risen by an additional 10% today. This takes their capital gain to an incredible 250% in the last year and with a special dividend recently announced, they are due to yield over 8.5% in the current year.

The special dividend seems to have improved investor sentiment in Best of the Best yet further, with it equating to 19.5p per share, which works out as 7.6% of the current share price. It is being paid because the company feels that it has excess cash sitting on its balance sheet which will not be required for working capital purposes over the next year. And with the company being cash generative and having a relatively strong balance sheet, it appears to have a bright long term future.

With shares in Best of the Best trading on a price to earnings (P/E) ratio of 31.8, they seem to be rather expensive given that earnings growth of 13% is forecast for the current year. But further gains simply cannot be ruled out, since there is still significant online growth potential on offer.

The post Which Small-Cap Should You Buy? LGO Energy PLC, Best Of The Best plc Or Nighthawk Energy Plc appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Peter Stephens 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.

This will allow it to build the first new mine in the UK in over 45 years and it is set to become the largest potash mine in the world. As such, it is a major project which has the potential to supply fertiliser on a vast scale. And, with the crop studies being undertaken by Sirius Minerals showing that its polyhalite fertiliser offers a more resilient crop, demand could prove to be relatively strong once production commences.

Of course, before then there is a lot of hard work to do. Clearly, the world’s largest potash mine is likely to cost £billions and, while the project is relatively enticing, Sirius Minerals may have some difficulty in obtaining the necessary capital at the desired rate and within its chosen timeframe. That’s at least partly because sentiment in the wider mining sector is rather downbeat and investors may choose to give preference to established, profitable companies rather than new mines.

Despite this, Sirius Minerals holds considerable long term potential and, for less risk averse investors, it remains a company with relatively high long term growth potential.

The same is true for alkaline fuel cell producer AFC Energy (LSE: AFC). It continues to make encouraging progress with its eleven step plan, with in being on-track to deliver its first commercial full-scale operation of the KORE system in Germany by the end of 2015. Upon completion, AFC is set to turn its focus to developing further commercial agreements, with it having already signed agreements to deploy its technology in Korea and in the Middle East as the world continues to shift to using cleaner and more sustainable sources of energy.

Despite it being on track with its programme, shares in AFC Energy have disappointed in recent months. For example, they have fallen by 42% in the last three months despite encouraging news flow. A possible reason for this is profit taking, with AFC Energy’s shares having risen by 464% in the year to July and being capable of further gains over the medium to long term. Although relatively risky, the potential for growth remains strong.

Meanwhile, shares in oil producer LGO Energy (LSE: LGO) have declined by 75% in the last six months and the key reason for that is a disappointing update regarding its Goudron Field, released earlier this week. It stated that the company will experience significant cost implications from a mechanical problem which was encountered in September and reported to the market on 18 September. Since then, unsuccessful recovery attempts and other costs totalling approximately $1.9m have been incurred, with LGO Energy also being potentially liable for the cost of the lost downhole equipment of approximately $1.5m.

Furthermore, the net oil pay observed in one of LGO Energy’s wells was exceptionally thick and the loss of anticipated production from the well is due to have a negative impact on the company’s cash flow forecasts. This has caused the stipulated liquidity ratios in the company’s borrowing agreements to drop below the required level and, while LGO Energy is in discussion with its lenders, in the meantime no further amounts can be drawn against its credit facility.

Clearly, the news is hugely disappointing and places additional uncertainty on the company’s long-term future. As a result, it may be prudent to watch, rather than buy, LGO at the present time, although it remains a company with a relatively appealing asset base and long-term growth potential.

The post Are Sirius Minerals PLC, AFC Energy plc And LGO Energy PLC Set To Soar? appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Peter Stephens owns shares of AFC Energy. 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.

Lgo has been forced to take this drastic action following unforeseen circumstances in the company’s drilling programme. 

The company has been obliged to plug and abandon well GY-678, the last of the seven wells Lgo had planned for 2015, targeting the C-Sand formation at Goudron onshore Trinidad. Lgo was forced to take this action after drilling equipment became lodged in the well. Lgo flagged the problem in September but was unable to find a solution to the problem. 

Now, Lgo has been left with an enormous bill for the recovery operation, and the group is potentially liable for the cost of the downhole equipment. Recovery costs have amounted to $1.9m so far while replacement equipment is expected to cost in the region of $1.5m. 

According to Lgo, in addition to the unforeseen recovery costs, the loss of GY-678 will also affect cash flows, meaning that Lgo will breach the loan covenants on its arrangement with BNP Paribas. 

Talks are under way with BNP Paribas to renegotiate the terms of the loan, but until these talks are complete, no further amounts can be drawn against the facility. Lgo has $12m outstanding under this facility and the fall in the oil price now means that the repayments over the life of the loan won’t cover the amount borrowed. 

However, it’s not all bad news. Although Lgo’s financial position is concerning, the company’s management remains upbeat about the future. Management has stated that despite the funding setback, Lgo will continue to develop the Goudron Sandstone prospect.

Cash crunch 

Unfortunately, it has become clear over the past few months that, like many of its peers, Lgo is suffering from the low oil price. At the beginning of October, Lgo was forced to raise £1m by way of a placing, to be used as working capital. 

And now Lgo’s access to its facility with BNP Paribas is limited, it is likely that the company will have to raise more cash by the way of placings to fund operations. 

Still, Lgo isn’t alone. The oil industry is currently under an unprecedented level of stress and many oil producers, both large and small are struggling with debt.

With this being the case, there’s a chance that BNP could decide to give Lgo more time. After all, over the past two years the company has shown that it can successfully operate and manage its production assets. 

The bottom line 

Overall, today’s news from Lgo is extremely disappointing. Nevertheless, the company isn’t out of options just yet. Year to date, Lgo has had a relatively successful drilling programme and the group is still producing oil which is generating cash.

The post Today’s Stock Market Loser: Lgo Energy PLC Crashes By Almost Half On Funding Worries appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Rupert Hargreaves 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.

Furthermore, demand for its GIANT solution remains high, with a combination of a sound market position in Asia as well as further investment in R&D aiding its long term outlook. And, crucially for investors, it expects full year results to be ahead of market expectations, which is perhaps the key reason for its double-digit share price rise today.

Such are Fusionex’s growth prospects that it has also announced a placing which has been oversubscribed and has raised £14m to be used for growth opportunities. And, with the company’s bottom line forecast to rise at a double-digit rate in each of the next two years, its shares could continue the momentum which has seen them rise by 32% in the last year.

Meanwhile, Sirius Minerals (LSE: SXX) continues to await the final decision from the North York Moors National Park Authority regarding its proposed potash mine. Clearly, the company has huge long term potential to become a major supplier of polyhalite and it has vast growth potential due to the positive results which have been found in crop studies recently undertaken.

However, before it reaches that status there are a number of hoops for the company to jump through, one of which is obtaining the required approvals for the mine to go ahead. Then there is the issue of financing. With resources companies having taken such a large hit in recent months the appetite among investors for early-stage mining plays may be somewhat smaller than it was a year or two ago. So, while Sirius Minerals certainly has the potential to soar, relatively high risks remain and less risk averse investors may wish to wait until there is greater clarity regarding its long term future.

The last three months have been hugely disappointing for investors in Trinidad-based oil producer LGO Energy (LSE: LGO). Its shares have lost 68% of their value in that time, with a key reason for this being a placing of £1m to be used to speed up the development of its Goudron sandstone programme.

Clearly, the falling oil price has hurt investor sentiment in LGO, but it remains a very appealing long term play. For example, its first sandstone well exceeded management’s expectations and a further drilling programme is now being planned in the current year. In addition, LGO’s financial performance is on the up and its Goudron field could prove to be highly profitable over the medium to long term. So, while its shares are likely to remain volatile and further placings could realistically lie ahead, it has the potential to reverse its share price falls in 2016 and beyond.

The post Are Sirius Minerals PLC, Fusionex International PLC And LGO Energy PLC Set To Soar? appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Peter Stephens 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.

Lgo placed 111,111,110 new ordinary shares at 0.9p per share, taking the total number of shares in issue to 3,165,164,156. The funds used from the placing will be used as working capital in Lgo’s Trinidad businesses including initiating work on Lgo’s Goudron Sandstone programme.

Lgo is looking to fast-track the development of its Goudron sandstone program after an upbeat set of results from the first sandstone well, which was completed at the end of September. The well exceeded management’s expectations for production, and now, Lgo is looking to drill a further 10 sandstone wells in the near future.

A number of new wells are planned by the end of 2015. Management estimates that due to the relative ease of drilling in the sandstone, Lgo can drill the shallow wells at a cost of $400,000 per well in less than ten days. 

It’s believed that the Goudron Sandstone reservoir totals 343 million barrels of reserves. The Goudron Sandstone reservoir represents over 40% of the overall current Goudron Field’s estimated gross 805 mmbbls oil in place. 

Hard to value 

Bringing ten new, low-cost wells with daily production in the region of 60 barrels per day online during the next few months will certainly boost Lgo’s production. However, it’s difficult to value the company’s shares at present. 

Lgo’s shares closed at 1.1p at the end of last week, so today’s placing has been conducted at an 18% discount to the market price. This is a big red flag. Companies that undertake deeply discounted share placings do so at the expense of existing shareholders. What’s more, a deeply discounted placing can indicate that the company is struggling to raise the cash from other sources.

Lgo has already made heavy use of placings to bolster its balance sheet this year. Back in January, the company raised £1.58m via a placing of 52.5m shares, and a further £6.7m was raised in February. This capital raising was part of the company’s new debt arrangement with BNP Paribas. 

Still, overall Lgo looks to be heading in the right direction. For the six months ending 30 June 2015, the company reported a gross profit of £2.1m, up 150% year on year. The group’s pre-tax loss excluding non-cash items for the period was £187,000, a huge improvement on the figure of -£2.2m as reported for the first half of 2015. This growth is even more impressive when you consider the fact that the price of oil was roughly 50% lower year-on-year. Lgo’s gross oil sales increased 200% year-on-year. 

Despite these impressive figures, however, it’s difficult to value Lgo. It’s clear that the company has limited cash reserves and is struggling to turn a profit. Also, the volatile price of oil means that Lgo is at the mercy of the market. 

The bottom line 

If the price of oil recovers and Lgo turns profitable, the company could be a great long-term investment. 

So, if you already own the company’s shares, it might be sensible to sit back and ignore Lgo for a few years while keeping an eye on your other investments. 

The post Lgo Energy PLC Slumps On New Fundraising appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Rupert Hargreaves 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.

The key reason for this was an increase in group oil sales of over 200%, with the 65,000 barrels sold in the first half of 2014 increasing to 208,000 barrels in the same period of 2015. And, while LGO Energy’s pretax loss of £2.5m is up slightly on the £2.4m from last year, when it excludes non-cash items the loss mas a much lower £187,000.

Looking ahead, the company is focusing on reducing costs in order to provide a stable, economically viable platform for future growth. Additionally, it is expecting to complete and bring on to production all seven wells that are being drilled in 2015 at its key Goudron asset in Trinidad. And, with LGO Energy having recently received CEC approval from the Trinidad and Tobago authorities for the drilling of 30 additional wells at the Goudron field, further drilling programmes could also be on the cards.

Clearly, LGO Energy is being hurt by a lower oil price. However, with further increases in production likely and sound management of costs, the company should be economically viable in a low oil price environment. As such, it appears to be worthy of purchase ahead of further encouraging news flow.

Similarly, oil services company Petrofac (LSE: PFC) also looks set to offer enticing capital growth over the medium to long term. A key reason for this is its income appeal. Next year, Petrofac is expected to yield 5.1% and, with dividends being covered 2.3 times by profit, there is tremendous scope for an increase in shareholder payouts even if profit growth does disappoint.

Such an impressive yield could hold great appeal for income-seeking investors, which has the potential to increase demand for Petrofac’s shares and push their value higher. On this front, there is scope for a major upward rerating, since Petrofac trades on a forward price to earnings (P/E) ratio of just 8.5.

Meanwhile, Xcite Energy (LSE: XEL) is an oil exploration company with considerable long term potential. Its Bentley field in the North Sea is a very appealing asset and could lead to impressive levels of profitability for the business in the medium to long term. And, while the company’s share price has disappointed thus far in 2015, with it falling by 30% year-to-date, it now trades on a price to book value (P/B) ratio of just 0.37, which indicates that a wide margin of safety is on offer.

However, in the short run, the weak oil price makes exploration stocks less appealing – especially since Xcite Energy will require financing to fund its future development. And, with North Sea costs generally being higher than elsewhere in the world, Xcite Energy may struggle to invigorate investor sentiment in the near term. As such, while it may perform well in the long run, its share price may come under pressure in the months ahead.

The post Are Xcite Energy Limited, LGO Energy PLC & Petrofac Limited Set To Post Stunning Capital Gains? appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Peter Stephens owns shares of Petrofac. The Motley Fool UK owns and has recommended Petrofac. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Up 195%

African Potash has surged 195% in the last four weeks, having risen from 1.09p per share to its current valuation of 3.25p. Recent news about its pipeline of projects comes alongside new production and distribution deals, which are surely encouraging, and helped its stock move up to a 52-week high of 3.56p earlier this year. Yet African Potash remains a highly speculative bet based on its funding needs. My advice would be to hold its shares only as part of a diversified portfolio, or to wait a bit longer.

Up 60%

The value of oil and gas explorer Pantheon has risen over 60% in the last month. Its latest drilling update pushed up the stock from 23p to 28p, which is close to its 52-week high. I am not comfortable investing in a business at this stage of maturity, but management is doing a great job in managing expectations. My quick take? Keep an eye on guidance for its capital requirements and funding needs before investing in it. Until then, look elsewhere for value. 

Down 20% 

Ophir, a more mature oil business with a market cap of over half a billion pounds, has lost 20% of value in the last month of trade. Analysts aren’t particularly bullish, given that its earnings profile is uncertain but significant funding needs could weigh on its performance. Dilution risk, in particular, could become a real concern, although its balance sheet is sound at present. Its stock currently trades around a 52-week low of 80.8p. I could easily speculate that a rebound is long overdue, but Ophir has also lost the backing of one of its key shareholders — Kulczyk Entities — this year, which isn’t ideal in this environment, really. So, I’d give it a pass. 

Down 15%

LGO Energy is not a company I dislike, and if I were to place a speculative short-term bet in the oil space, I’d be tempted to snap up its stock in the wake of a -15% performance over the last month. Its stock currently trades at 1.29p, which is close to the low end of its 52-week range (1.15p-6.95p) — but that’s not the main reason why it could be an attractive bet. Its latest drilling update was only mildly encouraging, true, but then LGO boasts a diverse funding base and has proved that its shareholders and lenders are willing to back its plans — and I would be, too.

Down 10%

Cairn is probably the safest bet of all, and that’s not only because its share price has been relatively resilient in the last month of trade. Based on its balance sheet and fundamentals, there’s reason to believe that its shares could deliver capital gains of between 50% and 100% into 2017, although much depends, of course, on how this business cycle plays out and whether oil prices will trade any higher over the short term. I am bullish, so Cairn is an obvious buy for me at its current price of 139p, which is only 3p away from its 52-week low. 

The post Are African Potash Ltd & Pantheon Resources Plc Any Safer Than Ophir Energy Plc, LGO Energy PLC & Cairn Energy PLC? appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

Alessandro Pasetti 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.

For example, Gulf Keystone Petroleum’s (LSE: GKP) future appears to be much brighter after the Kurdistan Regional Government (KRG) announced that it will now commence regular, monthly payments to oil producers in the region. And, to commence the new policy, Gulf Keystone Petroleum is set to receive a payment of around $15m within the next few days, which should help to improve its financial outlook and boost investor sentiment.

However, the company is not out of danger just yet. It continues to be owed for past oil production by the KRG and, while regular monthly payments may now commence, there appears to be no word on whether outstanding debts will be cleared. Furthermore, Gulf Keystone Petroleum continues to suffer from the great uncertainty which exists in the region, with the conflict in Iraq/Syria seemingly set to continue over the medium term.

And, while the KRG may have the best of intentions and will seek to fulfil its promise of regular payments, the situation within the region is very fluid and resources may be required elsewhere. So, while the news is positive for Gulf Keystone Petroleum, it may be worth waiting for evidence of further payments before buying a slice of the business.

Meanwhile, mining investment company Anglo Pacific (LSE: APF) could be set to deliver improved news flow over the next couple of years. That’s because the company is expected to move from being a loss-making entity into a profitable one, with two years of losses set to give way to a pretax profit of £5m this year and £10m next year. This could be enough to turn around investor sentiment and push the company’s share price higher after its 12% fall since the turn of the year.

Furthermore, with Anglo Pacific having a forward price to earnings (P/E) ratio of 18.5 and being set to double pretax profit next year, it shares seem to offer appealing capital gain potential for less risk averse investors.

Similarly, LGO Energy (LSE: LGO) also has the scope for improved news flow. And, with its drilling programme at the flagship Goudron well in Trinidad having been progressing well, it seems to be in a strong position to deliver impressive levels of profitability over the medium to long term.

Most recently, it announced that the last of its 2015 development wells had reached its target depth, with it having located a similar thick sand package to a previous well from which over 105,000 barrels of oil have been produced to date. With the prospect of further encouraging news flow and a price to book (P/B) ratio of 1.9, it appears to be worth buying for the long haul.

The post Is Now The Perfect Time To Buy Gulf Keystone Petroleum Limited, LGO Energy PLC & Anglo Pacific Group plc? appeared first on The Motley Fool UK.

More reading

• Down 17% from February, do Barclays’ sub-£5 shares look a steal to me after its Q1 results?
• Buy the dip on Palantir shares?
• 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today?
• Down 8%, is Shell’s share price a steal now around £33?
• How much is needed in a Stocks and Shares ISA to target a £3,111 monthly passive income?

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