Shares in Falkland Oil and Gas (LSE: FOGL) spiked up 14% this morning to 32.3p, after a period of volatility that has seen them reach as high as 39p. The price is up only a modest 11% over 12 months, but thats pretty good for a smaller oil explorer in these low-price days, and we have seen a 61% boost since Decembers low.
The thing is, despite the doom and gloom surrounding the industry, Falkland is merrily carrying on with its exploration programme. Its fully-funded, and at the beginning of March we heard of its latest well spudding its in the Zebedee prospect, in which Falkland has a 40% interest, and is operated by Premier Oil. It should take around 30 days to produce results, so we should hear more soon.
On the whole, with more than 1.3 billion barrels of gross resource being targeted, Falkland looks good to me.
A bit riskier
Im not so bullish on the prospects for Gulf Keystone Petroleum (LSE: GKP), but the outlook does look brighter than it did a few months ago. Gulf was having problems getting cash back via the Kurdistan government from oil exports, but has turned instead to selling oil domestically for up-front cash. That earns a fair bit less per barrel, but it does at least generate the cash needed for Gulf to get up to full production capacity.
But sentiment doesnt seem to be going Gulfs way, with the spike following Februarys strategic update falling back pretty quickly and at 38p were still pretty close to 52-week lows with a drop of 57%.
I still think theres a reasonable chance of doing well with Gulf Keystone at this level, but its risky and one for experts only.
Not with a bargepole
Sadly for Afren (LSE: AFR) shareholders, things just keep getting worse, and the firm has recently called in the Serious Fraud Office after concerns were raised regarding expenses paid to an individual hired in 2012. The events would have been back under the management of the crooked three who have since been dismissed, so shareholders will be hoping for no material repercussions but the investigation that uncovered it was part of the rescue plan, and it will have shaken confidence a little.
The plan, under which Afrens current bondholders will end up owning almost the entire company, is still likely to go ahead. Itll be a rough deal for existing shareholders, but there is no realistic option on the horizon. The only thing that puzzles me is why the shares are still up at 3.1p, when theres every likelihood therell be a rights issue at significantly less than that.
To conclude
For me, Falkland looks like a pretty decent investment, and Id rate Gulf at 50/50, but all I see in Afren is a dead duck.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Afren. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.