junior oilers 7/8 june

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    Junior oilers 7/8 June

    Oil and gas prices rose again this week prompting some debate on the future direction of energy prices on websites dealing with the US economy eg. CnnFn. Higher prices have also prompted some stock market websites eg. Stockhouse, to focus more attention on energy stocks. Renewed interest in the oil and gas sector can only be good for our little Aussie battlers but there is no evidence yet that the Australian punter has taken any notice. But they will.

    Closing prices with previous week’s price in brackets were as follows. Nymex crude $31.28 ($29.56), Dated Brent $28.36 ($26.90) and Nymex Henry Hub natural gas $6.51 ($ 6.25).

    Gas prices in the United States are particularly strong which, as I said last week,is good for AMU, FAR and particularly PSA. PSA is pulling in more than $A1 million net a week at these prices.

    Of the 44 oil and gas stocks on my expanded watch list 14 rose this week, 16 fell and 14 stayed the same. The bias has moved back towards neutral after a particularly negative week the week before. Volumes however remained very light.

    It is worth noting again that we are now in that time of the year when investors usually begin to offload losing stocks for tax purposes. The selling hasn’t started in erneast yet but it is something to watch for and take advantage of if you have any spare cash around.

    The big winner again this week was Amity Oil, although it closed Friday some 11 cents below last Friday’s close it was up a healthy 12 cents from Monday’s finish of 90 cents. A veritable barrage of press releases helped sustain interest in the stock as did a report that Adatepe 1 flowed at 13mmcf per day and would be brought into commercial production as quickly as possible. It also helped that the company announced the drilling of another well whose name I can’t pronounce and that Yesiltepe was closer to spud.

    It has been a bit of a roller coaster ride for those following this stock and will probably continue so for some time. I can’t blame anybody for getting caught up in the hype that surrounds Amity, it has already delivered some very good returns to those that have traded it this year. And as I said last week if it finds oil at Yesiltepe there is a good chance it will rocket up to $3 or more. The best advice I can give is follow the price action closely and maintain a tight stop loss. If you are going to hold through the drilling of the next well know the downside risk as well as the upside. Wildcats have a habit of disappointing. But if Yesiltepe is a winner AYO will graduate to the big league, no doubt about that, finding oil in Turkey is a whole lot better than mucking around with gas.

    Petsec was up a bit this week closing Friday at 59 cents, a gain of 5 cents over the week. Higher than expected gas prices have obviously contributed to the stock’s strength but volumes were miniscule. PSA has its West Cameron wells back in production at a rate in excess of 25 mmcf per day and we are now only a month or so away from the start of its drilling program. I would hope to see PSA back in the 60 cents plus range before too long.

    Hardman Resources was up 4 cents for the week but is struggling to get above 60 cents and this as positive news about Chinguetti and the upcoming drilling program starts to dribble out. Makes one wonder whether we are going to get any pre drill price action this year. I haven’t given up hope yet but took advantage of this week’s strength to lighten up my holding and switch some funds back into PSA.

    Carnarvon Resources was also stronger this week closing the week at 3.4 cents a level not seen since the beginning of May. And volume this week was a lot better than the previous week. Could be that some interest is returning to this one which disappointed so many earlier in the year. The office has now moved to Melbourne and the company is determined to make a go of its Thai assets. One to keep an eye on.

    TAP and Novus were also stronger this week.

    On the losing side AWE was a bit softer this week off three cents FAR continued to slide ending at 2.6 cents despite the spudding of Terry Ewing #2 well in the United States this month.

    Most other stocks did very little this week apart from Afminex which traded some 15 million on Friday but price was not affected. Not sure what is going on there.

    That’s it for me this week. Am staying with friends at the Royal Pines Resort on the sunny Gold Coast and am kind of on holidays. Back to wintry Canberra and more comprehensive reports next week. Hopefully there will be a bit more action to report on next Sunday, this past week was very quiet, or at least it seemed so to me.

    Disclosure: I hold BUY, BUYO, FAR, FAROA, HDR and PSA

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