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Sector survey

Hallucigenia
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Sector survey

#475410

Postby Hallucigenia » January 22nd, 2022, 7:11 pm

So it's been a while, I've been away doing other things and not paid attention to the sector for some years. But what with sentiment taking a kicking due to COP26 etc, and high prices starting to show up in people's bills (and in the cashflow of potential acquirers), it might be a time to revisit.

So I've knocked up a script to grab some data from Yahoo - the quality of their data ain't great, but it's easy to get and I've cleaned up some of the real howlers. I started with their Energy sector, ditched the likes of the integrateds, put the services to one side for now, and shuffled a few as appropriate (they classify Wood as integrated, Tomco as drilling etc) to be left with what we'd recognise as E&Ps.

First I used the difference between the Yahoo reported enterprise value and market cap to look for pseudo-cash shells. Valeura (VLU) is trading at around 20% discount to their £30m of cash, I've not really looked at what they're up to in Turkey but presumably it's complicated. Cadogan (CAD) is in Ukraine - nuff said (qv Enwell). Longboat (LBE) is perhaps more interesting - the former Faroe management in new clothes - trading at about their £38m of cash, which they've just raised to spend on drilling 7 wells over the next 15 months, targetting a mean 104 mmboe net. All offshore Norway as the name suggests, so any production would be ... enthusiastically ... taxed, they suggest transaction values of US$4/boe, but at least the geology is familiar so they're typically 25% chance wells. They're three weeks in to their first well, although it's only a small one for them, 6mmboe net.

Shares are off a third from their highs of a quid, feels like people have got a bit bored and are nervous about the environmental side, but if you fancy a fairly straight bet on drilling success then you could do a lot worse than Longboat?

I also looked for companies with "momentum", defining it as the difference between the 50ma and 200ma, divided into the 52-week range. It's not perfect, I would go for shorter timespans as eg at the moment Advance still shows high despite a horrendous duster this week whereas Borders & Southern doubled on Thursday (presumably someone got confirmation that they'd renewed their licences?) but aren't prominent here. But 50/200ma are the ones that a lazy person can easily get from Yahoo so it's somewhere to start. I also looked at the current shareprice in relation to the 52-week high/low (eg if shareprice is 180p and lo/hi is 100/200 it's 80% of that range). Then I took out the silly-bugger listings with over 75% "insider holdings" as defined by Yahoo - PennPetro, Phoenix Global, Indus, Zoltav, Enwell and Caspian.

No I haven't suddenly become a momentum investor. But it's one way to get a feel for what's going on in the sector, as places to start digging. Given the macro environment, I suspect that just buying a basket of the top 5-10 of this list will do alright over the next 6-12 months. Not that I'm going to do that, I'll be having a good poke at some fundies. Not surprisingly, Mr Market likes bigger, production companies and is out of love with small exploration cos - twas ever thus. And some of the "snoozing" companies will wake up at some point - Longboat is one (up or down!), Diversified (DEC) might be another. A £900m agglomeration of gas producing assets in the US is never going to be too exciting, it's the sort that just keeps grinding out a 10% yield whilst they wheel and deal and Henry keeps the cash flowing. Been knocked down on environmental fears which they claim are overplayed, but on first look they look the share to pay your gas bill....?

But a final reminder - this data is from Yahoo, which can be a bit squiffy. I've manually patched up some of it so some of it won't correspond to what's on Yahoo.

EPIC	Name		  Cap	 SP   Momentum	SP/hi-lo
SQZ Serica Energy £633m 239.5p 33% 81%
IOG IOG £179m 35.5p 27% 87%
PANR Pantheon Res £576m 75.9p 24% 74%
TGL TransGlobe £167m 240p 22% 94%
ENOG Energean £1692m 956.5p 21% 92%
HUR Hurricane £91m 4.455p 21% 82%
PTAL PetroTal Corp £258m 29.5p 21% 94%
ZPHR Zephyr Energy £77m 5.95p 17% 59%
GTE Gran Tierra £226m 60p 15% 68%
CHAR Chariot £74m 9.22p 14% 54%
CNE Capricorn Energy £943m 191p 14% 78%
ADV Advance Energy £6m 0.68p 14% 3%
KOS Kosmos Energy £1428m 334p 14% 98%
SOU Sound Energy £33m 2.05p 13% 45%
FOG Falcon Oil & Gas £108m 11.65p 13% 67%
PXEN Prospex Energy £11m 5.65p 12% 84%
GEEC Great Eastern £49m 41p 11% 90%
DELT Deltic Energy £33m 2.4p 11% 72%
I3E i3 Energy £159m 14.6p 8% 81%
JSE Jadestone Energy £440m 94.5p 7% 47%
TXP Touchstone £200m 89.5p 6% 37%
PHAR Pharos Energy £119m 28p 6% 94%
GKP Gulf Keystone £457m 216p 5% 91%
PPC President £36m 1.775p 4% 14%
AXL Arrow Explo £20m 9p 4% 89%
TRP Tower Resources £6m 0.27p 4% 13%
GBP GlobalPetroleum £4m 0.535p 2% 9%
EME Empyrean Energy £40m 6.15p 1% 46%
HBR Harbour Energy £3226m 359.4p 1% 44%
AEX Aminex £31m 0.8p 0% 63%
CORO Coro Energy £7m 0.32p 0% 21%
PTR Petroneft Res £28m 2.9p -1% 51%
88E 88 Energy £330m 2.38p -2% 46%
JOG Jersey O&G £45m 138.5p -3% 20%
TLOU Tlou Energy £15m 2.15p -4% 1%
EGY VAALCO Energy £145m 250p -4% 83%
ANGS Angus Energy £13m 1.1p -4% 55%
WCAT Wildcat £52m 2.375p -5% 46%
ORCA Orcadian Energy £24m 36.5p -5% 81%
CEG Challenger £5m 0.625p -5% 1%
TLW Tullow Oil £845m 59.62p -6% 85%
AST Ascent Resource £4m 3.5p -6% 2%
BOR Borders & Southern £7m 1.25p -6% 33%
EDR Egdon Resources £9m 1.75p -6% 40%
ZEN Zenith Energy £15m 0.875p -7% 13%
PATH Path Investments £5m 0.27p -7% 19%
EOG Europa O&G £9m 1.6p -8% 49%
CAD Cadogan Petroleum £9m 3.5p -8% 58%
VLU Valeura Energy £24m 27.5p -8% 80%
OEX Oilex £15m 0.18p -8% 24%
RKH Rockhopper £49m 10.3p -9% 73%
ECHO Echo Energy £6m 0.44p -10% 1%
IGAS IGas Energy £18m 15p -11% 9%
SCIR Scirocco Energy £6m 0.825p -11% 9%
ENQ EnQuest £391m 21.7p -12% 63%
NTOG Nostra Terra £3m 0.4p -12% 18%
UKOG UK Oil & Gas £16m 0.1025p -12% 2%
DEC Diversified En £918m 110.6p -13% 45%
GENL Genel Energy £419m 153.8p -13% 49%
BOIL Baron Oil £8m 0.07p -13% 24%
STA Star Phoenix £2m 1.25p -14% 12%
BLVN Bowleven £10m 3p -14% 11%
PRD Predator O&G £18m 6.52p -14% 19%
MATD Petro Matad £35m 4.18p -14% 27%
PVR Providence Res £27m 2.65p -14% 9%
SEPL Seplat Energy £789m 93.8p -15% 60%
VOG Victoria O&G £12m 4.85p -15% 57%
COPL Canadian O'seas £57m 36.75p -15% 32%
PMG Parkmead Group £44m 40.65p -16% 29%
LOGP Lansdowne O&G £4m 0.475p -16% 2%
SOUC Southern Energy £20m 26p -17% 30%
TRIN Trinity E&P £61m 131p -17% 35%
SENX Serinus Energy £19m 1.8p -18% 14%
SLE San Leon Energy £183m 37.35p -19% 80%
WTE Westmount Energy £12m 8p -19% 17%
NOG Nostrum Oil & Gas £13m 5.52p -19% 21%
CLON Clontarf Energy £2m 0.245p -20% 10%
ECO Eco (Atlantic) £55m 26.25p -20% 51%
UOG United Oil & Gas £19m 3.1p -20% 25%
WEN Wentworth Res £39m 21.4p -22% 30%
LBE Longboat Energy £36m 63.5p -22% 8%
MSMN Mosman O&G £3m 0.0825p -22% 8%
PET Petrel Resources £3m 1.65p -22% 3%
ARG Argos Resources £4m 1.6p -23% 31%
RBD Reabold Resources £23m 0.265p -25% 21%
SDX SDX Energy £20m 9.7p -26% 25%
ADME ADM Energy £2m 0.925p -29% 5%
BLOE Block Energy £9m 1.425p -34% 21%
UJO Union Jack Oil £17m 16p -37% 17%
UPL Upland Resources £2m 0.275p -39% 8%

Hallucigenia
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Re: Sector survey

#521768

Postby Hallucigenia » August 11th, 2022, 10:26 pm

You may recall my post from 22 January :

Hallucigenia wrote:So it's been a while, I've been away doing other things and not paid attention to the sector for some years. But what with sentiment taking a kicking due to COP26 etc, and high prices starting to show up in people's bills (and in the cashflow of potential acquirers), it might be a time to revisit.

....if you fancy a fairly straight bet on drilling success then you could do a lot worse than Longboat?


So punts only work if they have some drilling success, and LBE haven't, so they're down about a third.

Hallucigenia wrote:I also looked for companies with "momentum", defining it as the difference between the 50ma and 200ma, divided into the 52-week range. It's not perfect, I would go for shorter timespans as eg at the moment Advance still shows high despite a horrendous duster this week whereas Borders & Southern doubled on Thursday (presumably someone got confirmation that they'd renewed their licences?) but aren't prominent here. But 50/200ma are the ones that a lazy person can easily get from Yahoo so it's somewhere to start. I also looked at the current shareprice in relation to the 52-week high/low (eg if shareprice is 180p and lo/hi is 100/200 it's 80% of that range). Then I took out the silly-bugger listings with over 75% "insider holdings" as defined by Yahoo - PennPetro, Phoenix Global, Indus, Zoltav, Enwell and Caspian.

No I haven't suddenly become a momentum investor. But it's one way to get a feel for what's going on in the sector, as places to start digging. Given the macro environment, I suspect that just buying a basket of the top 5-10 of this list will do alright over the next 6-12 months.


So I've finally got my posterior in gear and coded something to do the calculations. The first four columns of the table below relate to "buying a basket of the top 5-10 of this list", or more particularly each row x refers to buying a basket of equal amounts of the top x of the original list (which was sorted by "momentum factor"). The second column is the all-time high (since 22 January) of that basket of x shares, the third is the day that happened, and the fourth column is the gain you would be sitting on if you bought that basket on 22 January and had held until yesterday's close. So for instance, the 5-stock portfolio would consist of Serica, IOG, Pantheon,TransGlobe and Energean and it peaked at +63.42% on 19 April and is now up 44.27%.

The right hand half of the table relates to individual shares - column5 is the shareprice performance of a single share since 22 January, the remaining columns are from my original post and give an idea of selection criteria. For some reason the historical data for Jadestone (was in #20 place) isn't working, but it doesn't make much difference so I've not bothered to hack it back in. And I've just noticed that the Gran Tierra data is a mess, some is in pounds and some in pence - I've fixed it for the lines below but the sector-wide figures will be a fraction low. Bloody Yahoo data. Anyway....

Longboat may have been a poor shout for a punt, but I think I get two claps for "time to revisit" the sector and "buying a basket of the top 5-10 of this list will do alright over the next 6-12 months".

To be more specific, buying £1k of each of the companies above on 22 January would have given you a gain of 32.9% by 5 May - albeit it was a short-lived spike, a week before or a week after you would be on 20%, and as of yesterday you would be on 11.9%. Still, that's better than a slap in the face.

And the momentum indicator seems to work over this period, in that buying the top 5-10 sorted by momentum would give you 63-77% return in less than two months, and you would still be sitting on 42-50% gain if you were still holding now, nearly 7 months later. Which I'd call a bit of a result, particularly since it was just based on 50/200ma with no optimisation of days.

One thing that's notable is that all the shares that have gone down by over 10% started the period with market caps under £50m. You can imagine why a momentum-type indicator wouldn't work particularly well with small, very newsflow-driven stocks, so it's probably not unreasonable to exclude companies under £50m (or even have a rule of "not under £100m except for production-led companies over £50m"). It's probably no bad thing from a liquidity POV in any case.

Another possible rule would be instead of having a fixed number of shares, have a rule of "all shares with a momentum of at least half the top share", or "momentum >15" - that would give you 8 in this case which is a sensible number although in this period it gives you Zephyr at #8 which is the first loser (albeit not by much). Maybe >20 then!!!

I'm sure you could make it more sophisticated with either monthly rejigging, or some kind of overall buy/sell indicator based on commodity prices or the momentum of the basket itself - discussion welcome.


Portfolio of first x lines Share performance & starting stats
Rows max Day of max 10/08/2022 Share Cap SP Momentum SP/hi-lo EPIC Name

1 82.35% 13/04/2022 63.61% 63.61% £633m 239.5p 33% 81% SQZ Serica Energy
2 54.17% 13/04/2022 36.53% 9.45% £179m 35.5p 27% 87% IOG IOG
3 70.65% 13/04/2022 50.11% 77.25% £576m 75.9p 24% 74% PANR Pantheon Res
4 69.86% 19/04/2022 46.01% 33.71% £167m 240p 22% 94% TGL TransGlobe
5 63.42% 19/04/2022 44.27% 37.32% £1692m 956.5p 21% 92% ENOG Energean
6 76.82% 13/04/2022 49.78% 77.36% £91m 4.455p 21% 82% HUR Hurricane
7 72.39% 20/04/2022 47.82% 36.04% £258m 29.5p 21% 94% PTAL PetroTal Corp
8 67.51% 13/04/2022 41.61% -1.85% £77m 5.95p 17% 59% ZPHR Zephyr Energy
9 69.35% 13/04/2022 42.77% 52.00% £226m 60p 15% 68% GTE Gran Tierra
10 75.19% 19/04/2022 47.54% 90.50% £74m 9.22p 14% 54% CHAR Chariot
11 69.27% 19/04/2022 45.10% 20.73% £943m 191p 14% 78% CNE Capricorn Energy
12 62.49% 19/04/2022 36.60% -56.94% £6m 0.68p 14% 3% ADV Advance Energy
13 65.51% 19/04/2022 39.62% 75.86% £1428m 334p 14% 98% KOS Kosmos Energy
14 62.11% 19/04/2022 34.96% -25.64% £33m 2.05p 13% 45% SOU Sound Energy
15 58.43% 20/04/2022 30.86% -26.54% £108m 11.65p 13% 67% FOG Falcon Oil & Gas
16 53.36% 20/04/2022 28.46% -7.55% £11m 5.65p 12% 84% PXEN Prospex Energy
17 48.03% 20/04/2022 23.59% -54.22% £49m 41p 11% 90% GEEC Great Eastern
18 47.51% 20/04/2022 25.88% 64.77% £33m 2.4p 11% 72% DELT Deltic Energy
19 51.45% 19/04/2022 30.82% 119.66% £159m 14.6p 8% 81% I3E i3 Energy
20 48.68% 19/04/2022 29.17% -2.22% £200m 89.5p 6% 37% TXP Touchstone
21 46.89% 19/04/2022 27.43% -7.25% £119m 28p 6% 94% PHAR Pharos Energy
22 46.29% 19/04/2022 28.57% 52.45% £457m 216p 5% 91% GKP Gulf Keystone
23 44.48% 19/04/2022 26.14% -27.27% £36m 1.775p 4% 14% PPC President
24 46.04% 19/04/2022 28.84% 90.91% £20m 9p 4% 89% AXL Arrow Explo
25 44.01% 19/04/2022 26.73% -23.85% £6m 0.27p 4% 13% TRP Tower Resources
26 43.32% 19/04/2022 24.59% -28.85% £4m 0.535p 2% 9% GBP GlobalPetroleum
27 44.69% 19/04/2022 20.74% -79.51% £40m 6.15p 1% 46% EME Empyrean Energy
28 45.36% 19/04/2022 20.39% 11.05% £3226m 359.4p 1% 44% HBR Harbour Energy
29 44.09% 19/04/2022 20.49% 23.33% £31m 0.8p 0% 63% AEX Aminex
30 44.60% 19/04/2022 19.92% 3.39% £7m 0.32p 0% 21% CORO Coro Energy

19.5 5.80% £440m 94.5p 7% 47% JSE Jadestone Energy

Sorcery
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Re: Sector survey

#525946

Postby Sorcery » August 28th, 2022, 7:32 pm

Hal, an Interesting post of yours. I think I may have missed your first post in this thread. Have been offline from Lemonfool for about a month (password issues), so have just caught up with it. Looking at the top 10 from your January list and their price now do you see a gain? Since we have had oil prices surge since March, have the top 10 performed better than the median 10 and/or the bottom 10 (SP performance wise)?

I quite like momentum, it can pick up shares that are not on the radar such as those without profits yet. Oil is a sector I like for obvious reasons nowadays, so have been bulking up in the sector and am considering investing yet more in shares already owned or new ones both in the UK and US. US is attractive because I think the chances of windfall taxes there are lower and there is more choice.

If I can divert slightly into shares already owned,
Pre covid owned shares : Still in most of my old favourites, Pharos, Tullow, Rockhopper and the Norwegian DNO. Not sure what to do about the first 3, they are fairly well beaten up, currently just hoping for a future recovery. DNO is probably more safe (has a positive PE and a dividend)

Recent Purchases :
BP, nuff said.
DEC, good yield.
GKP, exceptional yield, low PE, possible takeover due. Results due on 1st Sep
ENQ, very low expected PE of 1.67, Results out 9th Sep, have high hopes of a rerating!
HBR, good results recently, PE and dividend not given yet by Yahoo finance
PTAL, good results last week, PE of 5.6
TXP, a smallish amount invested, mentioned a lot on this board
MRO (US), PE 6.2 + a typically (for the US) smallish divi
FANG (US), PE 6.22 + a typically (for the US) smallish divi

Echoing Hal's trawl, I did one yesterday for low PE or High Dividend US stocks. No other fundy checks other than PE and dividends, would like to look at debt before making any purchases, not easy to find on Yahoo Finance, though the historical interest paid does not look terrible. These are what stood out for me:
OXY: PE 7.3, divi 0.7%, Warren Buffet's favourite oil stock
PXD: PE 10.54, divi 8.08%
DVN: PE 9.22, divi 8.75%
CTPA: PE 7.4, divi 5.22%
OVV: PE 5.81, divi 2.0%
APA: PE 4.52, divi 1.24%
DINO: PE 6.63, divi 2.94%
PDC: PE 5.14, divi 2.26%
CPG: PE 3.55, divi 2.26%
PBF: PE 3.12, divi None
BTU: PE 4.62, divi None
LPI: PE 2.19, divi None
CIVI: PE 5.26, divi 2.7%

It should be noted that we are almost 6 months in to Russia's invasion of Ukraine. Western sanctions on Russia have made the price of oil sky high. I am not sure what oil prices these PE's (where they are forward looking) are based on.

Food for thought hopefully.

Sorcery


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