A year or so ago you wouldnt have caught me liking a Falklands-based oil explorer better than an onshore explorer in Africa!
But thats the way things have changed, and after the calamities that have hit Afren (LSE: AFR) I see at least two better prospects, one there and one on the same continent.
Afren, focused mainly in Nigeria, is effectively bust and living on borrowed time after defaulting on interest payments this month. That was with the tacit agreement of creditors who are not going to pull the plug while Afren seeks a refinancing package, but I really cant see there being much left for existing shareholders once its in place.
An oily with cash!
But on the same continent, BowLeven (LSE: BLVN) is looking like a much better prospect. BowLeven has interests in Cameroon and in Kenya, and although it is not in profit at the moment, it had $14m in cash in its books at the end of October with a further $30m facility unused.
But the big plus is BowLevens planned farmout of two thirds of its Etinde assets, which should yield a total of $250m. The deal is expected to be finalised any day now, with BowLeven receiving the first $170m in cash. With that kind of money, the company will be in a very strong position to develop the rest of its assets along with the Etinde joint venture.
Over in the South Atlantic, Falkland Oil and Gas (LSE: FOGL) had $109m on its books at interim time in June last year, with easily enough cash to fund its 2015 drilling programme. At the time, the firm was working on the seismic data it captured in early 2014, and was targeting more than 1.3 billion barrels of gross resource with a 5-well drilling plan.
Since then, in February this year, weve heard that exploration has commenced with a slightly more efficient programme. And last week we got the news that the first well had been spudded. Chief Executive Tim Bushell said that FOGL has the largest acreage position of any explorer in the Falklands Islands and the biggest exposure to the upcoming drilling campaign, the results of which have the potential to be transformational for us.
So we have two explorers with exciting prospects and all the cash they need to fund their developments, against another thats massively indebted and struggling to stay alive.
The bottom line
It seems pretty obvious to me which one to keep your bargepole away from and where to risk your oil-exploration money, and the citys tipsters agree with me. Four are tipping Falkland as a Buy with four staying Neutral, and for BowLeven we have four Buy recommendations and just one Neutral no Sell tips for either.
Afren? One lonely soul apparently thinking we should Buy, with five firmly opposed in the Sell camp and 10 on a Neutral stance.
Finally, if you like exciting opportunities, 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.
Do NOT buy these stocks
Theres lots of opportunity out there in todays market but theres also PLENTY of danger.
In anticipation of Champion Shares PROs brief opening to new membership a few short weeks from now, the analyst team behind the Motley Fools most exclusive service has agreed to share 3 stocks they believe YOU would do best to avoid.
PRO research is rarely made available to the general public. To find out the names of these “don’t buy” companies — and to claim your 100% FREE copy of Steer Clear Stocks right away — simply click here.