Thoughts from the Malvern Castle.
Hot footing on from recent success’s at Premier Oil (LON: PMO) bought at 20p/21p. Now trading at 56p and Genel Energy (LON: GENL) bagged at 73p now trading at £1.08P, I thought I’d pen an article for the best site that tells it as it is www.guerillainvesting.co.uk
It’s time retail investors turned away from the pump & dump shite on the Alternative Investment Market (AIM) that are beset by internet trolls and zero in on a ‘nice little gem’ of an oil company.
Get researching LekOil (LON: LEK) I first reviewed them last year when their ownership of the Nigerian OPL 310 asset giant oil discovery increased 70%, after Afren went into insolvency. Catalysts are about to happen very soon, so it’s eyes on.
The time is ready for a major movement in the markets, charts have already got going in favour of the company. My research indicates that the seller, which held the stock, has been cleared on volume and its blue sky time.
Brief history: (LEK) Lek Oil has its assets mainly in Nigeria with the Ogo offshore light oil field, which has a mouth-watering 1 billion barrel oil in place (OIP) estimate. I’m hearing, through my sources, that new 3D results are coming with the potential to increase by 1 billion recoverable. That is a huge driver of their sp. Even at $40 dollar oil! Their breakeven oil price is sub $30 with a market cap sub £95M. This asset is the jewel in the crown.
Furthermore the Otakikpo onshore light oil field, in my view, is about to flow within three weeks time producing 5,000bopd light crude with a breakeven of $25, which market commentators believe could increase to a humungous 10,000bopd by 4Q 2016. The latest news from the Otakikpo asset points to volumes significantly exceeding 6,000bopd from one well, this successful test represents another major milestone.
OPL325 is another offshore asset. This time IT’S exploration but there are ongoing farm out talks with major oil company’s which have been going on throughout this year, who are looking at the billion barrel discoveries nearby.
Clearly the balance sheet, unlike other companies in Nigeria, is excellent with zero debt at present. Advanced debt on good terms without equity dilution will fund increased production to 20,000bopd in 2017, if they reach this production figure then their value could head toward 100p, expect an update very soon. It was reported that four financing offers had been tabled, at the recent London presentation, and are being reviewed.
Looking ahead apart from the giant OIP upgrades on both onshore and offshore fields the Ogo discovery itself will be drilled early in 2017, with a giant potential farm out partner for next year being mooted soon. You can bone up on the company by visiting www.lekoil.com
The charts clearly point back to 28/30p, however fundamental’s point to near term events being a driver of the SP. Put LEK on your watchlist.
Starting orders.
Chris Oil
Dealing Disclosure: I own shares in the companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
