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Highlights
- As oil has retraced from its recent highs, a few ASX oil companies might feel to witness some erosion of high-profit margins.
- AJQ, GGX and PCL are three ASX energy stocks that have fallen the most since last week.
- Volatility in energy markets is still quite high and therefore, investing in these commodity-based stocks should be proceeded with caution.
Oil prices have retraced the most in the last two years on a weekly basis. A much-needed cool off in crude oil price resulted in a fall of over 12% to around US$106 per barrel as US president Joe Biden announced to release US oil reserves to calm red-hot energy markets.
Image Source: © Rizami | Megapixl.com
As oil has retraced from its recent highs, a few ASX oil companies might feel to witness some erosion of high-profit margins enjoyed around the peak of the rally. Let us have a look at three ASX energy shares that have fallen the most in the last week.
Read More: SYA, GED & PUR: 3 ASX penny stocks that started the week on a positive note
- Armour Energy Limited (ASX:AJQ)
Armour Energy is a focused player in the exploration and development of gas and associated liquid resources. The company has a market capitalisation of AU$31.6 million and recorded a net loss of AU$11.59 million over revenue of AU$17.57 million in FY21. Last week, the AJQ share price fell steeply by 37.5% to the last closing price of AU$0.016 on 1 April 2022.
However, at the start of the week, the shares tanked another 37.5% alone on Monday to AU$0.01 after the board announced the resignation of CEO Mr Bradley Lingo, effective immediately. The volume for the day was also the highest ever, at over 69.1 million shares.
- Gas2Grid Limited (ASX:GGX)
Sydney-based Gas2Grid is an ASX-listed conventional oil and gas exploration company. Oil produced by the company is sold locally as well as exported to Singapore and China. The company has a market capitalisation of a mere AU$10.2 million and it recorded a net loss of AU$1.93 million in FY21.
GGX’s shares have fallen 20% to the last closing price of AU$0.002 in the last week, while it remained flat on 4 April 2022. On 31 March 2022, the company announced that Armour Energy had been advised by Gas2Grid that they had determined that not to proceed with completing binding farm-in arrangements due to certain commercial issues. This was also one of the major reasons for the GGX share fall.
- Pancontinental Energy NL (ASX:PCL)
The last stock on our list is Pancontinental Energy, which is an ASX-listed oil and gas explorer company, having key assets in Namibia, Africa and Queensland, Australia. The company has a market capitalisation of AU$42.9 million and it reduced its net loss to AU$0.79 million in FY21, compared to a loss of AU$4.46 million a year ago.
Last week, PL shares plunged 16.7% to the last closing price of AU$0.006 on Friday as oil prices moved southward.
Bottom Line
Energy prices are finally cooling off, after soaring to the highest levels since 2008 in March 2022. However, volatility in energy markets is still quite high and therefore, investing in these commodity-based stocks should be proceeded with caution.
Read More: BHP, CSL & FMG - How much dividend these blue chips are paying?
