Here are the top 5 best performing O&G players so far for 2022
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The Russia-Ukraine conflict pushed oil prices beyond the US$100/b mark this month, and while they’ve settled somewhat, prices could be set to skyrocket.
Added to this, OPEC is sticking to its guns with the consortium ignoring calls to ramp up production quickly and sticking to its plan to gradually increase production, the next of which is a scheduled rise of 400,000bpd.
And the International Energy Agency said 3 million barrels per day of Russian oil and products could be shut in from next month.
Chief investment officer of the Lowell Resources Fund John Forwood told Stockhead’s Josh Chiat he’s seen analysts calling for prices to hit as high as US$200/bbl if the war stretches from weeks into months.
He’s not alone in that opinion. Hedge fund manager Pierre Andurand said oil could hit that price by the end of the year.
And if Warren Buffett is getting in on the action, you know it could be a goer.
His company Berkshire Hathaway disclosed recently that it raised its stake in shale oil major Occidental Petroleum to 14.6% with purchases of 18.1 million more shares last week.
Now the question is, who’re the best performing O&G stocks so far for 2022?
Market Cap: $508m
The Cuban-based company’s share price is trading up from $0.02 in January to $0.17 on March 18 – that’s a massive 750% increase for the year to date.
The company’s Alameda-1 well is on trend with the nearby Varadero oil field, reported to contain 11 billion barrels of oil in place and responsible for tens of million of barrels of oil production since its discovery in the 1970s.
And just last week MAY reached total depth on the well, with investors now awaiting initial flow testing work, which is expected to be completed in March.
Executive chairman Andrew Purcell said the “300 metres of highly energised interval (the most highly energised of the entire well) with excellent oil indications intersected in this objective gives us a total of three significant intervals in this first well.”
Once flow testing is complete the rig will move to start drilling the Zapato-1 well.
Market Cap: $35m
Up 150% for the year to date – from a share price of $0.002 to $0.005 – is Pancontinental.
The company holds acreage that is on trend with two high impact wells that Shell and TotalEnergies are drilling separately in the Orange Basin, offshore Namibia.
Successful drilling of either or both wells will substantially increase the prospectivity of the company’s Saturn oil play in PEL 87.
In early Feb, Shell made an oil discovery ‘along trend’ from PCL’s PEL 87 licence area offshore Namibia.
And just a few weeks ago the company’s neighbour TotalEnergies has announced a “major” light oil discovery in the Venus-1X well, offshore Namibia.
“The Total discovery and the quick appraisal well by Shell are incredibly encouraging for Pancontinental’s on-trend PEL 87 project. Pancontinental holds 75% and is project operator,” PCL technical director Barry Rushworth said.
“Pancontinental’s Saturn turbidite complex in PEL 87 is similar to Venus because it has the same age and depositional character, the same mature oil source rocks and regional seal at about the same depth below the sea floor.
“Saturn is much larger in area, with the potential for greater oil volumes.”
Market Cap: $19m
The company is trading up 90.9% since January, from $0.011 to $0.021, reporting US$847,414 ($1.19m) in gross oil and gas revenue for January from its lease position in the East Permian Basin, Texas, USA.
That was at an average sale price of oil in January 2022 of US$81.98 per barrel.
In its latest release on Friday the company flagged it now has “outstanding” operating costs (lifting costs) of US$4.04/barrel of oil equivalent “underpinning significant margins and cashflow.”
“The location of Winchester’s acreage in the productive Eastern Shelf of the Permian Basin, allows for relatively inexpensive, shallow drilling and almost immediate conversion from production to sales revenues,” Winchester says.
“Similarly, operating and maintenance costs in Texas are amongst the lowest in the world.”
Winchester will shortly commence an inexpensive well workover programme with a view to increasing production at White Hat 3902.
Plus, it’s in the final stages of permitting the newly acquired Varn Project ahead of drilling operations scheduled to commence next month.
Varn is 29km from its existing production field and has proven and probably reserves of 1.068 million barrels of oil equivalent comprised of over 93% oil.
Market Cap: $233m
The company’s share price is up 81.81% from $0.022 in January to $0.040 on March 18.
In September last year, Mineral Resources (ASX:MIN) announced that it had made a significant gas discovery in the Perth Basin during the drilling of the Lockyer Deep-1 exploration well it shared with Norwest.
The primary target was the Kingia Sandstone, which MinRes said demonstrated excellent reservoir quality and significant gas elevations.
And just last week the company announced in preparation for production testing it had completed operations to perforate the ~25 metre Kingia reservoir gross pay interval, and achieved early strong gas flow.
Onsite gas sampling indicates the presence of 4% to 4.5% CO2 and 1-2 ppm H2S.
“These early results support the Joint Venture’s view that Lockyer Deep-1 will outperform once production testing commences,” MD Iain Smith said.
“The rapid clean-up followed by early, high flow rates confirms that we are dealing with an extremely high-quality gas reservoir.
“We look forward to seeing what the well will deliver once production testing commences.”
Market Cap: $89m
The company is trading up from $0.047 in January to $0.072 on March 18, a 53.19$% increase for the year to date.
The shale oil producer holds the Tuscaloosa Marine Shale (TMS) in Mississippi, which contains 3.0 million bbls of producing reserves providing free cash flow and approximately 150 million bbls of mid-case 2C recoverable oil.
Australis achieved positive EBITDA for each quarter during 2021 despite the settlement of oil price hedges in 2021 losing US$5.4 million offsetting the prior year’s profit from hedges of US$4.7 million.
The company is confident of improving US oil and gas industry sentiment, as well as sustained higher oil prices, and increasing third party activity in the TMS core area.
“We believe that diminishing Tier 1 oil locations in other plays will reinforce the uniqueness of the TMS Core, given its productivity, attractive commercial characteristics and substantial remaining undeveloped inventory,” chairman Jon Stewart said in the company’s 2021 annual report.
“The Permian is by far the play with the most future production potential but the consequences of handling the vast amounts of associated saltwater that comes with its oil to surface (relative to the much lower water cut in the TMS) is a definite ‘watch this space’ due to saltwater handling costs and environmental concerns around reinjection wells.”