Oil and Gas Eye Q3 2013
Fallers in Q3 initiate strategic reviews or suffer operational setbacks
46% of companies in the AIM oil and gas universe registered a fall in share price in Q3, reflecting regulatory difficulties, poor drilling results, and the start of strategic reviews.
Kea Petroleum’s share price fell 51%. In September, it said a reduced appetite for deep gas had meant it had decided not to extend the term of the PEP51155 permit in New Zealand for a further five years. It also said it was starting a review to consider strategic alternatives to maximise shareholder value, which could include farm-outs. It said the scale of its Puka discovery, and current challenges for small explorers in accessing capital markets, were the main reasons for the review.
In September, Sefton Resources also said it had started a strategic review to find the best way to deliver future shareholder value. The same month, at its request, trading in its shares on AIM was temporarily suspended following unauthorised publication and alteration of confidential information on a website. Sefton’s share price ended Q3 down 31%.
Mediterranean Oil & Gas’ share price fell 29% over Q3. In August, production from the Guendalina 3 well in Italy, in which it has a 20% stake, was shut down following a sudden reduction in production performance. During Q3, Mediterranean said that, despite an earlier positive ruling, the Ombrina Mare production award had been further delayed by the Italian authorities.
In July, Wessex Exploration said its GM-ES-4 well in French Guiana had not encountered hydrocarbons and will be plugged and abandoned. This was the third of a four well exploration drilling campaign that started in mid-2012 to follow up the Zaedyus oil discovery made that year. Wessex’s share price ended Q3 down 27%.
Europa Oil & Gas’ share price fell 17% in Q3. In July, it said its two 100% owned permits in the Aquitaine Basin onshore France had not been renewed within the set timeframe, and are now deemed to have lapsed. Europa has submitted appeals for each permit with the relevant French authorities.
Falcon Oil & Gas was the only company to exit the Oil and Gas Eye index at the end of Q3.
Performance of Oil and Gas Eye index and FTSE 350 Oil and Gas Producers index
Source: EY, Thomson Datastream