These small cap oil and gas plays have sailed against the negative market

The ASX small cap oil and gas industry has been a blood bath over the past half year, thanks to lockdowns and travel restrictions intended to halt the spread of COVID-19.

This has hammered oil prices and slashed gas demand.

Oil price futures slumped into negative territory for the first time ever in April due to concerns about crude storage in the US.

It has since bounced back up to around $US40 ($57.75) per barrel but ongoing concerns about supply overtaking demand and a second wave of infections has served to put a hard cap on any increases.

Global resources consultancy Wood Mackenzie has reduced its long-term Brent price assumption from $US60 per barrel to $US50 per barrel, while UK supermajor BP slashed its long-term price expectations by 27 per cent to just $US55 per barrel.

Demand for gas has also dropped, leading to a reduction in Australian liquefied natural gas (LNG) exports, which has in turn led to a reduction in domestic spot gas prices on the east coast as more gas becomes available.

This environment has already claimed some victims, with US shale oil and gas pioneer Chesapeake Energy declaring bankruptcy, though the company was already struggling prior to the COVID-19 pandemic.

Some lights in the dark

Despite the doom and gloom, a small number of companies have managed to exit the first half of 2020 on a positive note.

Here’s how ASX small cap oil and gas stocks have performed from January 1 – July 2 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Shares in oil producer Bounty Oil & Gas (ASX:BUY) have been rising fairly steadily through this half-year, with some small blips along the way, and is now up 325 per cent to 1.7c.

The company has a 2 per cent stake in the Naccowlah Block in Queensland, where operator Santos (ASX:STO) has drilled eight wells in 2020, six of which have been cased for oil production and are awaiting tie-in to the production system.

While Bounty only has a small stake in Naccowlah, it still generated $594,000 in revenue in the March 2020 quarter.

It also has a 15 per cent interest in PEP 11 in the offshore Sydney Basin that is believed to host an active petroleum system.

Kinetiko Energy (ASX:KKO) merrily skipped through the worst of the oil price rout, with the company emerging from a suspension that has been in place since October 2017 in mid-May this year.

Shares in the company have risen 150 per cent to the current 5c price since then.

Kinetiko is starting a high-resolution aeromagnetic survey on its flagship Amersfoort gas project in South Africa, its first exploration there in about six years.

This is intended to provide other areas for well tests and further pilot production fields.

Kinetiko has also appointed independent oil and gas experts and appraisers Gustavson Associates to carry out an updated resource report on its existing and newly granted exploration rights.

Coal seam gas player Carbon Minerals (ASX:CRM) is up 66.67 per cent to 30c on little or no news, while Greenvale Energy (ASX:GRV) rose 63.16 per cent to 3.1c.

Greenvale has developed an initial 2020 exploration work plan for its Alpha oil shale project, which it expects can produce refined liquid petroleum products, high-quality bitumen products and active carbon projects.

This will focus on the extraction and analysis of torbanite and cannel coal bulk samples.