What a chart, further to go, or not
Comments please

Interesting insight on many smaller oil companies
regards - Peter

From Sunday Telegraph - Edmond Jackson

Mauritania shapes up

Mauritania looks to be shaping up as a major offshore energy province for the next 25 years. The extent of the opportunity is reflected by Hardman Resources, an Australian explorer also listed here.

BG, the FTSE100 gas group, has agreed to pay $132m (73m) for Hardman's 13.1 per cent interest in a production-sharing contract in Area A, and an 11.6 per cent interest in Area B. As if such a cash boost was insufficient to fund the development opportunities, Hardman proposes to raise 32.7m via a share issue at 45.5p.

I rated Hardman a "buy" around 30p but felt well exposed to Mauritania via Dana Petroleum. The latter's prelims on Wednesday confirmed the risk/reward profile that attracted me to buy and hold, with net profit soaring from 6.8m to 19.6m and earnings per share up from 9.2p to 26.5p.

Warren Buffett has said that one should judge the success of investments by their business operating performance rather than share price swings. Yet it puzzles me why Dana shares do not merit a p/e ratio of about 12, roughly in line with the sector, which implies a share price of about 320p against 255p currently.

Ironically, Ramco Energy has enjoyed much better support from the City, with its Aim-listed shares being chased up to 400p this year. They have plunged to a 30p range on disappointments with the Seven Heads gas field in the Irish Sea. Ramco contributes to a sense that resource group shares are a sheer gamble on which you may lose all your money. But the simple point to recognise is that a spread of projects lowers risk whereas Ramco has turned itself essentially into a one-shot company.

After steadier growth in production this year, Dana is targeting 30,000 barrels of oil equivalent per day in 2006. This is before potential acquisitions; indeed, I am inclined to think that high oil prices will encourage smaller energy companies to focus on drilling before seeking acquisitions.

What should one make of Dana's preliminary assessment of the Pelican-1 exploration well, offshore Mauritania? I was initially sceptical of December's news about a gas find since there was no immediate market. Little wonder Dana's shares did not rise recently, unlike those in Cairn Energy.

In this game commerciality is all. Major share moves are based on quality oil or gas finds for which a market can be served or developed.

After analysis Dana now estimates about 1,000bn cu ft of gas in place on the Pelican structure, of which 600bn to 800bn cu ft are estimated to be recoverable. Taking the lower estimate, 600bn cu ft equates to about 100m barrels of oil equivalent. Given Dana's 76.5 per cent ownership, this means Pelican gas could potentially boost reserves from 123.7m barrels to about 200m.

Perhaps I should stop moaning that Dana never makes a high-impact discovery!

It will still take four to five years to achieve commerciality, but the involvement of BG Group in Mauritania suggests other major players in liquified natural gas are likely to move in and make things happen.

Dana added that since the base of the hydrocarbon-bearing interval was not encountered in Pelican-1, "there is scope for considerable further upside in estimates". I accept that warily but reckon this exploration team is genuinely excited.

A further positive is that major oil discoveries offshore Mauritania have involved "gas caps", with oil deeper in the structure. Gas at Pelican-1 is oil-associated and analysis of the reservoir fluids and rock samples indicates the possibility of significant light oil deposits.

Dana is not the only player offshore Mauritania I would rate "long-term buy"; Hardman and Premier Oil are also attractive, say for a self-invested pension.

I regard Dana's Mauritanian acreage as "wildcat", but improvements in seismic technology and drilling make the risks more interesting. Owning a large acreage offshore Mauritania is enough to go for, although Dana's exploration is well balanced elsewhere.

For enterprising investment I make no apologies for keen exposure to oil and gas. This sector has been immune to the market's recent change of mood; indeed the likes of Cairn, Dana, Hardman and Premier show lots of commercial momentum.

I recognise that traders in Dana may have done better than a firm holder such as me - I should be a bit more active. But selling my stake in any of the dynamic explorer-producers would be throwing away potential.

Chart looking spectacular, still going up very strongly. New +/- 6 year high yesterday.
If Sinapa comes in then there will be another leap up.

Would recommend the "Fool" board for an in depth analysis of this stock.

Further to go IMHO.

regards

Peter


PS. Anyone got any further insight on this one, would be happy to hear it.

Any ideas please as to why the drop in price over the last few days?

Perky - 28 Apr'04 - 05:45 - 14 of 14
Any ideas please as to why the drop in price over the last few days?
=======================================================================

Hi Perky, They announced a "plugged and abandoned" well off west Africa. But they were ambiguous in their statement as to whether there would be future potential from "Sinapa-2"

When they last took a dive downwards 480p was the bottom, currently at 500p I feel they are reaching an "oversold" status very soon.

I managed to get out at 580p, but their 52 week high was 612p. I would be looking to get back in around the 480-490p mark.

They have a large ongoing drilling program for this year (+/- 20 wells), if they announce some success from these then the price should climb back to the 52 week high or better.

Good luck & regards

Peter

Anyone any thoughts please on whether the recent fall in PMO is just a blip or have we seen the best?

You tell me after you have looked at this. ">

Extract from an todays e-mail. Make what you will and I hope it is of some use.

Although oil prices are set to move much higher in time, for now they look as if they are due to pull back for a while. This could be good for equities generally, but maybe not for Premier Oil. The immediate up trend has been breached, and it looks as if we are due to test support levels between 510p and 595p.

Just pulled this one from the mists of time.

They bought another 100000 shares yesterday the lastest of a series of buy backs, leaving just 81 million out there.

Now that is not a lot imo.

http://moneyam.uk-wire.com/cgi-bin/articles/200505231742146567M.html

Its been a long time since anyone has posted to this thread and since last May, the share price has risen well. It's surprising that there is no interest for PMO on the Moneyam BB's. This company has some interesting exploration sites which will come good this year. Many comentators in the industry feel the share price has far to go.

Any interest amongst Moneyam investors as to its potential?

I have a lot of interest in Premier but I am not going to speculate as to what price it might achieve in the next year. That all depends on the success or otherwise of its drilling program. However, I'm not selling!

US crude oil stockpiles hit an eight-year high

By Kevin Morrison

Published: June 21 2006 18:46

US crude oil inventories rose to their highest level in eight years, US government data has revealed.

A weekly report by the US Department of Energy showed US commercial crude stockpiles rose 1.4m barrels to 347.1m barrels in the week ended June 16, its highest since May 1998, when US benchmark oil futures were trading at less than $15 a barrel, about a fifth of current prices.

US oil inventories have risen to such a level that some analysts are predicting they are close to reaching capacity in the worlds largest oil consuming market.

The increase in stockpiles was boosted by a rise in US crude imports of 447,000 barrels a day last week to an average of 11m b/d, suggesting there is no shortage of oil supplies at the moment, in spite of disruptions in Nigeria, a key oil exporter to the US, and in Iraq.

There is simply no way that a state-owned company in Mexico is going to table a bid for PMO.L.
It's ludicrous!!!! (almost laughable)
The MM's are taking the small punters for a ride.

Metals are good value at the moment.

this was my posting from a few days ago:


The only source of this buy-out rumour has been one reporter from the 'Independent' newspaper. No-one else has made any such claim. This is because the rumour is groundless and, as such, it has no credibility whatsoever. If it was credible then it would have been corroborated by other sources.

A good clue is found in the claim that the buy-out offer would come in friday morning. It clearly did not. Thus, somebody somewhere is obviously interested in spreading incorrect information. Do we really need to ask why?

The truth is, there is simply no way that a state-owned company in Mexico is going to table a bid for PMO.L.

It's just too ludicrous for words!!!!  (almost laughable)

The MM's are taking the smaller more gullible punters for a ride.

Once the rumour is seen for what it is the sp is going to sink - and, in a market where the oil price is also going down daily, 'sink' could very well = plummet !!!

....and now this:



Daily Telegraph - 05/09/2006
Market report: By Yvette Essen


Hopes of a 13-a-share bid for oil explorer Premier Oil receded.
The shares fell 15p to 10.42.