Furthermore, Petroceltic has stated that its lenders have indicated their willingness to consider such further waivers as may be required to continue the strategic review process based on circumstances applying at the time of any application. This shows that the company’s near-term outlook may be more positive than had been priced-in by the market, and that Petroceltic may be afforded the breathing space it needs to turn around its financial performance.

The second piece of news flow concerns Petroceltic’s operations in Algeria. It has commenced development drilling on the Ain Tsila gas and condensate field, after the AT-10 well was spudded. And with it being a relatively high-quality asset, Ain Tsila has the potential to deliver positive news flow moving forward.

However, with the company’s finances still being in a precarious position and there being good value stocks elsewhere within the oil & gas sector, it may be prudent to watch rather than buy Petroceltic at the present time.

Value for money?

Also reporting today was Petra Diamonds (LSE: PDL). While it’s on target to meet production guidance for the full year, lower diamond prices continue to weigh on its financial performance. As such, revenue for the first half of the year declined to $154m, which represents a fall of 28% versus the first half of the previous year.

While disappointing, Petra Diamonds has experienced firmer pricing since the end of the first half of the year and with its production being on track, as well as an expected weighting of sales towards the second half of the year, it remains upbeat on its prospects. In addition, with the company’s shares trading on a price-to-earnings (P/E) ratio of 14.1, they appear to offer fair value for money at the present time.

Clearly, there’s scope for further downward pressure on the company’s performance from a declining diamond price, but for long-term investors, Petra Diamonds could be worth a closer look.

Index beater

Meanwhile, Petrofac (LSE: PFC) is due to report results this week. Its shares have held up reasonably well in the last year despite the disappointing performance for the oil & gas sector. In fact, Petrofac has beaten the FTSE 100 in the last 12 months, with its shares being down by 10% versus 12% for the wider index.

Looking ahead, Petrofac is expected to yield 5.4% in the current financial year and with its shares trading on a forward P/E ratio of 7.9, it appears to offer excellent value for money. Certainly, it’s facing challenging trading conditions, but it seems to be successfully adapting its strategy and business model so as to deliver rising profitability over the medium-to-long term. Therefore, for investors who can live with above average volatility, as evidenced by a beta of 1.5, Petrofac could be a worthy buy.

The post Is Now The Perfect Time To Buy Petrofac Limited, Petroceltic International PLC And Petra Diamonds Limited? appeared first on The Motley Fool UK.

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Peter Stephens owns shares of Petrofac. The Motley Fool UK owns shares of 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.

Even so, a number of investors may be wondering whether now finally represents the right time to buy resources companies. After all, their share prices have already fallen by a huge amount and they could prove to offer good value for money. The decision therefore, is whether the level of potential reward is sufficient for the amount of risk being taken.

Cost-cutting

With Enquest’s (LSE: ENQ) shares having fallen by 62% in the last year, it could be viewed as offering a tremendous amount of upside potential. While this may be the case, in the near term Enquest is expected to struggle to tread water in a depressed oil price environment, with the company forecast to record a fall in its pre-tax profit of £37m in the current year.

As a result of this, it has today announced the loss of 45 jobs at its North Sea operations. This is part of a cost cutting process, in which Enquest is rumoured to be seeking to sell off stakes in various assets to strengthen its financial outlook. Although the company’s shares have fallen in value, it may prudent to stick with profitable businesses which still offer high potential rewards and less risk.

Expanding

Of course, a depressed oil environment creates opportunities for companies to take advantage of assets trading at discounted prices. For example, Amerisur (LSE: AMER) recently announced the acquisition of Platino Energy for $7m, with 22.7m shares being issued in order to fund the deal.

This move is in-line with Amerisur’s strategy of expanding the company’s asset base and could strengthen its long term profit outlook, as well as providing a degree of diversification. As with Enquest, Amerisur’s bottom line has come under pressure in recent years, but following a challenging 2015 it is due to return to a pre-tax profit in 2016. However, with its shares trading on a forward price to earnings (P/E) ratio of 16.2, there appear to be better options elsewhere in the resources sector.

Struggling

Meanwhile, Petroceltic (LSE: PCI) was thrown a lifeline in January when its lenders agreed to a debt waiver on its senior bank facility. In addition, it is rumoured to have become a potential bid target for its major shareholder, Worldview, which holds a near-30% stake in Petroceltic. If a bid were made — by Worldview or anyone else — then it could lead to significant short term gains for investors in Petroceltic.

However, there is no guarantee that any such bid will be made, and with Petroceltic struggling to service its debts, it appears to be facing a very uncertain future. So, while the potential rewards may be high, the risks appear to be sufficient to dissuade even the least risk averse of investors from buying a slice of the company.

The post Enquest Plc, Amerisur Resources plc And Petroceltic International PLC: Too Risky Or Worth The Potential Reward? appeared first on The Motley Fool UK.

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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 is clearly impressive news since Blinkx has struggled to adapt to an increasingly mobile-focused industry in recent years. However, its acquisition strategy coupled with the rebranding of its offering appears to be moving it in the right direction. Importantly, the market now seems to have shifted its stance on Blinkx, with its cost-cutting measures and improved sales from core products having the potential to turn the business around.

Despite this, Blinkx remains a company with a challenging near-term outlook. For example, it’s expected to post a pre-tax loss of £15m this year, followed by a pre-tax loss of £8m next year. And while its third quarter result was impressive, it may be prudent to await evidence of improved performance over a longer period of time before buying shares in the business.

Tough road ahead

Similarly, today’s update from Petroceltic (LSE: PCI) also indicates that now may not be an opportune moment to buy a slice of the oil and gas exploration and production company. Certainly, it’s positive in the sense that the company has received a further waiver of repayments under its Senior Bank Facility extending to 29 January. Furthermore, the company’s lenders have also indicated their willingness to consider further waivers that may be required to continue the strategic review process that was announced on 23 December.

However, it indicates just how challenging the company’s outlook is and with the price of oil seeming likely to remain under a degree of pressure moving forward, Petroceltic’s near-term prospects appear to be rather downbeat. Further losses are forecast for the current year and with a number of other oil-focused stocks remaining profitable, there appear to be better risk/reward opportunities elsewhere.

Sweet Sugarloaf deal

Meanwhile, shares in onshore oil and gas producer Empyrean Energy (LSE: EME) have soared by as much as 68% today after it announced the proposed disposal of its right, title and interest in the Sugarloaf AMI project for $61.5m in cash. Empyrean may also receive a further $10m based on future oil prices and, with irrevocable undertakings from over 23% of its shareholders having been received, the prospects for the deal going through appear to be encouraging.

Proceeds from the sale would be used to pay US tax liabilities, repay the Macquarie facility and to further the company’s strategic goals. Additionally, Empyrean has stated that it will consider the most efficient manner in which to return surplus funds to its investors.

Empyrean’s CEO stated that in the current low oil price environment it would incur either an unacceptable cost or unacceptable dilution when compared with the transaction in order to further develop the Sugarloaf asset. So the sale appears to be a prudent move for the business. And with Empyrean remaining a profitable business that still trades on a price-to-earnings (P/E) ratio of  13.8, for less risk-averse investors it could prove to be of interest.

The post Are Petroceltic International PLC, Blinkx Plc And Empyrean Energy Plc 3 Top Turnaround Stocks? appeared first on The Motley Fool UK.

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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.

Clearly, the market is disappointed with this development and it comes at a time when the company’s outlook is hugely uncertain. As well as a weak oil price hurting Petroceltic’s near-term outlook, its major shareholder, Worldview Capital Management, has apparently been critical of the company’s senior management team. In fact, it has been rumoured that a change in CEO is desired by Worldview, which is also unhappy with the proposed bond issue, too.

Of course, today’s share price fall follows a hugely challenging few months for the company, which have seen its valuation plummet by over 50%. And, with financing in the oil sector being relatively difficult to come by, owing to the increased opportunities that have become available to less risk averse investors, a delay in Petroceltic’s planned fundraising could cause investor sentiment to decline further in the short run. That’s because, with an array of other oil stocks trading on super-low valuations, investors have a great choice available to them, which means that they can be more selective.

One oil stock that is worth choosing to buy at the present time is BP (LSE: BP). It clearly has far superior size, scale and financial strength compared to Petroceltic and, while there have been criticisms levelled at its management team in recent years, the company is riding out a lower oil price, sanctions against Russia and the ongoing fallout from the Deepwater Horizon oil spill very well. In fact, BP’s share price has fallen by just 5% this year and, as its recent results showed, it is making encouraging progress in dealing with a lower oil price environment.

BP is expected to at least maintain dividends over the next two years, which means that it could pay out as much as 13.8% in dividends during that period. As such, it remains a top notch income play and, with strong growth prospects being anticipated during that period, its price to earnings (P/E) ratio is set to fall to just 12.8 next year, which indicates that its shares could be due an upward rerating – even if the price of oil does not pick up considerably in the meantime.

On paper, a combination of a smaller oil play and a larger, more stable stock such as BP makes a lot of sense. They may be able to balance out each other’s weaknesses and provide a mix of income and growth for long term investors. However, while BP is a superb buy at the present time, things could get worse before they get better for Petroceltic, with shareholder disquiet and questions about its financing unlikely to help improve investor sentiment in the near-term. As such, it remains a stock to watch, rather than buy, at the present time.

The post Is Petroceltic International PLC The Perfect Partner For BP plc? appeared first on The Motley Fool UK.

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Peter Stephens owns shares of BP. 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.