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Jersey Oil & Gas and President Energy placings are ‘no brainers’ - expert

Malcolm Graham Wood says Jersey Oil & Gas's move to raise £24mln is a 'very wise' move.
oil and gas operations
The books will close on the share placings later today

The market has been presented with not one but two ‘no brainer’ investment opportunities on Friday, according to oil companies expert Malcom Graham Wood.

Jersey Oil & Gas Plc (LON:JOG) and President Energy PLC (LON:PPC) both opened the books on separate equity funding efforts this morning, and the analyst strongly endorsed the placings via Twitter.

READ: Jersey Oil & Gas to raise £24mln in anticipation of new Verbier drilling

In his daily blog, meanwhile, he said: “One of the worst kept secrets was that JOG was on the road and looking for money, mainly as it is so much of a no-brainer.

“With a fantastic discovery at Verbier, and operator Statoil looking to appraise the 25-130m as well as a likely exploration well on the already de-risked Cortina prospect, a raise now is perfect timing.”

Graham Wood noted that any delay in raising funds would have spooked the market, he described the proposed raise as “very wise indeed.”

He added: “At 200p the offer is in my view so much of a giveaway that I wouldn’t be surprised to see an announcement very soon that it has been massively oversubscribed at this level.

“Also it should be borne in mind that JOG is still looking for UKCS production opportunities and strengthening the balance sheet at this time is no bad idea. Longer term this will be viewed as a chance not to have missed.”

The analyst reckons a target price should be pitched at ‘roughly’ five times the current share price.

READ: President Energy confirms US$8.75mln share placing

Regarding President, the analyst said: “There is something in the water in the square mile as during his roadshow Peter Levine has run into people seemingly very keen to invest in the company and I can’t blame them.”

He added: “The raise will give PPC further opportunities to buy more production and likely accelerate the existing work programme in Argentina.

“With the continent so full of opportunities and many companies looking to invest in the area, PPC has achieved a valuable early mover status and should be rewarded for it.

“The recent share price movement is only the start of a fully blown re-rating for the company.”

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