Both AIM (Alternative Investment Market) and the Oil/Gas stocks within it have been pretty dire over the last few months. Double-digit declines and investors shouldn’t forget that 50% of the value of a share is related to what sector it is in (approx). With Brexit and China trade fears, the risk is off the table. Hence AIM is sold off as well as smaller FTSE 350 in economically sensitive areas e.g. financials, oil.
I have investments in UKOG, Union Jack Oil (UJO) and Reabold Resources (RBD) in oil and gas AIM at the moment which I bought in the last few weeks on hopes of a rebound in sentiment if Brexit deal sorted etc.
Contrarian Investor generally looks at valuation and critically news flow. All three of my Oil and gas minnows have plenty of news flow.
UKOG - Horse Hill drilling of HH-2 well during October. All on track so far.
UJO - Updates on West Newton, Wressle planning (Nov 5) and Biscathorpe. No placing imminent.
RBD- Update on West Newton, especially Extended well test and CPR. Exciting prospects after placing.
Others on my watch list include Hurricane Energy (HUR), I3 Energy (I3E), Petro Matad (MATD) and Rockhopper (RKH). Watching but not pounced yet, HUR and I3E, in particular, look oversold, but dependent on well results. Rockhopper could be a good one if Sea Lion ever gets off the ground and progress in financing seems to be being made.
Many bargains out there in this bombed-out sector but if a Brexit deal is done, “riskier” assets might be back on the table. So many have lost so much money on AIM that I don’t blame fear e.g. UKOG down from 10-11p (intraday following Broadford Bridge well news) in 2017 to 1.15p now (partly due to botched Broadbridge Bridge cement job), UJO halved from 0.38 to 0.2p now due to @chrisoil share sales (he’s gone into RBD) as well as sentiment, RBD, a 1.75p 52 week high, now 0.92p.
Bombed out, but there looks like some good stories out there. I’m being very contrarian and brave and buying now as I think Brexit will be sorted before October 31 (hopefully with a deal), and AIM oil and gas may be back on the table soon. News flow from UKOG’s Horse Hill and UJO/RBD West Newton will be great to see and I think it will be positive.
Always looking for investing ideas, please contact me at firstname.lastname@example.org