A wave of positivity has swept up interest in a select group of independent North Sea oil firms which, according to Brendan Long, analyst at stockbroker WH Ireland, are enjoying an “exciting period”.
In an interview with Proactive Investors Long discussed Hurricane Energy Plc (LON:HUR), The Parkmead Group Plc (LON:PMG) and Jersey Oil & Gas Plc (LON:JOG).
Specifically, he examines Hurricane Energy’s latest success at the Lancaster field, which continues to grow in both size and stature, while he also notes the deal making of Parkmead and Jersey which have separately strengthened significantly through new transactions.
Indeed, Long highlights that Jersey’s deal to bring StatOil into an exploration drilling project is evidence that the tide is beginning to turn for the sector, thanks to steadier crude prices.
“The beginning of a return of confidence in the sector allows companies like StatOil to start making decision,” Long said.
He added that “extraordinary” well results like those unveiled last week by Hurricane provide more positives for the North Sea.
“It is a cyclical business, so we tend to go through these periods.
“We’re having this turn of events in terms of positive drilling results happening at a time when commodity prices are recovering so the conflux is certainly positive for the outlook for the North Sea.”
He also notes the significant potential for each of the companies’ projects.
Having a good asset is only part making a stock market success, however, and Long dissects the failure of Xcite Energy which he sees as something of a cautionary tale.
Long talked about the ‘above ground’ issues that leave shareholder dreams in tatters despite the group’s high quality asset and operational success.
In a nutshell, he explains that it was a lack of deal making, a flawed funding strategy and a shortage of institutional support that undermined the group’s ambitions.