In a bit of sabre-rattling last week, Argentina started legal proceedings against three UK oil explorers operating in waters around the Falkland Islands Falkland Oil and Gas (LSE: FOGL), Premier Oil (LSE: PMO) and Rockhopper Exploration (LSE: RKH).
Announcing the case in London, the countrys minister for the islands Daniel Filmus told the BBC that the three British companies, together with two others, are guilty of performing illegal acts by entering Argentine territory, saying that Argentina will use the full force of the law both national and international law to prevent these countries from taking the riches which belong to 40 million Argentine citizens.
Are they serious?
The only law that seems to apply is Argentinas domestic law. And while we might have some sympathy for Mr Filmus in his somewhat challenging role, do shareholders in these companies need to worry? After the UNs 1982 ruling on the Falkland Islands sovereignty, legal opinion seems to be very much against Argentina on this and the markets appear to concur.
Falkland Oil and Gas shares are, in fact, down just 0.25p (less than 1%) since the news broke late on Friday, and about 15% up over 12 months, with the company well-funded for its 2015 exploration programme. Its a risky investment and one thats really only for experts, but sentiment seems to be upbeat right now chairman Richard Liddell has spoken of excellent progress in preparing for the  drilling campaign which could transform the Company.
Premier Oil shares havent had such a great year, with a fall of 44% to 172p, but they appear completely unaffected by any prospects of the company being hauled in front of a Buenos Aires court, and since mid-March the price has started to pick up. Premier is profitable too, and with a forecast doubling of EPS sending the forward P/E down to 19, it looks like a relatively safe exploration investment.
Keep calm and carry on
The third under threat, Rockhopper Exploration, also sounded good in its 2014 full-year results, with cash resources of $200m at its disposal and its North Falkland drilling campaign under way and a successful result at its Zebedee prospect, in the words of chairman Pierre Jungels, represents a fantastic start to the 2015 Falklands drilling campaign and provides early proof of the significant remaining potential in the North Falkland Basin. Like the others, Rockhoppers shares are unaffected by Argentinas words, though theyre down 30% to 65p over 12 months, and definitely worth a closer look for oil investors.
The only real conclusion is that Argentina is just trying to gain a little political capital, just after the country marked the 33rd anniversary of the Falklands War. Investors should ignore it and carry on about their business.
If you’re looking for a genuinely exciting investment, how does a great new e-commerce opportunity that’s set to take many people by surprise grab you?
We have a brand new report for you, detailing 3 Hidden Factors Behind This Daring E-commerce Play, which could help set you on the road to riches if you’re smart enough to take up the opportunity while you can.
If you want to get in on one of the potentially most lucrative investments of 2015, you can find out more by clicking here now.
A Fast-Growing Company With Breath-Taking Potential
This small-cap business looks all set to benefit from a market worth an estimated 4 billion a year as it starts rolling out the innovative new product its developed.
In fact, our analysts think its sales could DOUBLE over the next few years perhaps even more!
To find out the name of this company which could help to power your portfolio towards serious gains click here to read our exclusive analysis for FREE!simply click here to get your FREE Small Cap report now!
Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.