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SP Angel Morning Oil & Gas President Energy, JKX Oil and Gas and MX Oil

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Headlines
• JKX Oil and Gas (LON:JKX) – Tax Rate Revision Alleviates Pressure: Whilst the outcome of the shareholder action by Proxima Capital Group is as yet uncertain, today’s news will be a welcome fillip for the shares which have been beleaguered in recent time by the impact of a number of things, some of which have been self-inflicted, others such as Russia’s invasion of Ukraine, out of its control.
President Energy (LON:PPC) – Argentine Update Welcome: We believe that both of the items disclosed in today’s announcement (operational successes with the workovers and liberalisation of the hydrocarbon sector) will have a positive impact not only on the share price immediately, but could also alter management perception on the geography of its investment in Latin America.
MX Oil (LON:MXO) – Awards Promising, But More Information Needed: We believe that the impending CPR will provide a significant amount of clarity (outwardly at least) to the investment and allow the market to assess the value of the proposed investment. Regardless of that, on the face of it this news is positive for the Company.

News Items
JKX Oil and Gas (LON:JKX) – Tax Rate Revision Alleviates Pressure
Ukrainian government is elected to revive the production tax 55% to 29% provides significant relief to the Company, and ultimately will have a positive impact not only on the economics of the field, but the Company’s immediate need for cash flow.

It will also help the current management team in their bid to remain intact following the previously announced shareholder action brought by the Proxima Capital Group, to unseat the current board and replace them with largely banking and accounting experienced directors.

What is certain is that today’s news alone will provide support to what has become a beleaguered stock, what is less certain is whether the arbitration that it is currently engaged in (claim - $270mm) with the Ukrainian government either has merit, or will be successful.

Investors in JKX have endured a torrid time over the last five years, which has seen the share price fall from approximately 345p to today’s current level, and although some of the blame can rest squarely with the existing management team, we believe that collectively they have demonstrated that they have learnt from their mistakes, and given the oft fragile nature of operating in Ukraine, we believe that there is merit to the management claim that the operating future of the Company could be impaired by their wholesale removal.

Whilst the outcome of the shareholder action by Proxima Capital Group is as yet uncertain, today’s news will be a welcome fillip for the shares which have been beleaguered in recent time by the impact of a number of things, some of which have been self-inflicted, others such as Russia’s invasion of Ukraine, out of its control.

President Energy (LON:PPC) – Argentine Update Welcome
operationally, today’s news is a step forwards, however, we can’t help but think that the most significant improvement to the fortunes of President’s Argentinian operations has been the change in government. In the short time that Marci has been in power, his government had made its intent known that it will not only liberalise the hydrocarbon industry, but in floating the peso, has demonstrated a willingness to open the country to foreign direct investment.

To our mind we believe that while the success of the two workovers to date lift the Company, the positive impact of these has been amplified and superseded by the positive impact that the changes in government policy have had on the Company’s outlook for its Argentinian businesses.

We believe that both of the items disclosed in today’s announcement (operational successes with the workovers and liberalisation of the hydrocarbon sector) will have a positive impact not only on the share price immediately, but could also alter management perception on the geography of its investment in Latin America.

MX Oil (LON:MXO) – Awards Promising, But More Information Needed
Today’s news in which management provides more detail on its recent awards (Tecolutla, La Laja, Ponton, and Paso de Oro), are welcome, and on the face of it appear to be promising. We are still uncertain of, however, the fiscal terms of the Land Contract Area arrangement.

We believe that the impending CPR will provide a significant amount of clarity (outwardly at least) to the investment and allow the market to assess the value of the proposed investment. Regardless of that, on the face of it this news is positive for the Company.

We may provide a further update on one, or all, of the stories above later today. However, if there is anything that you would like to discuss, please feel free to contact us.

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