Britain’s small-cap oil and gas jumped higher in Monday’s deals as Liz Truss was confirmed as the new Prime Minister, and, investors positioned amidst speculation that the government will intervene in the energy sector.
The big punt is that having promised action to alleviate the energy crisis, Truss is preparing to give a greenlight to the shale gas industry by lifting the moratorium that currently prevents fracking in the UK.
IGas Energy PLC (AIM:IGAS, OTC:IGESF) advanced another 11% adding to recent gains to take the price to 90.6p, up around 77% in the past month, at the same time Egdon Resources PLC (AIM:EDR) shares were up 13% on Monday at 7.96p and UK Oil & Gas PLC (AIM:UKOG) advanced 20% to 0.1p.
Brendan Long, analyst at WH Ireland, highlighted in a note the potential opportunity that’s been renewed as the new PM moves into number 10.
“We believe that Liz Truss would be the only leader of a major democratic country actually focusing on providing a core solution to the energy crisis, namely, on increasing the supply of oil and natural gas – very positive for the UK,” Long said.
“With all of the doom and gloom surrounding the UK economy it is worth remembering that the UK is in fact exceptionally well positioned to have a thriving economy because it has been bestowed with an abundance of oil and natural gas.”
The analyst added: “if the press speculation is correct, the UK has real potential to emerge from the energy crisis, in due course, in a position of strength.
“Should fracking become a solution to the UK’s energy crisis, Egdon Resources would almost surely have a significant and positive role to play in alleviating the crisis given its land position.”