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Summary
- To ease global economic pressure by slashing oil prices, oil producing countries will up their output.
- It was agreed at a meeting of the OPEC that monthly production would be increased by 400,000 barrels each day.
- Brent crude oil price has increased 43 per cent to about $74 per barrel this year.
To ease global economic pressure by slashing oil prices, oil producing countries will up their output. OPEC countries and their allies like Russia will boost production August onwards. Through the pandemic, the oil price was at a two-and-a-half year high.
At a meeting held on Sunday, it was agreed that monthly production would be increased by 400,000 barrels. After two volatile months, the move would bring the market back to OPEC+’s control. Brent crude oil price has increased 43 per cent to about $74 per barrel this year. The decision is also expected to impact the sky-high prices of petrol at the pump.
Copyright © 2021 Kalkine Media
OPEC+ discussions collapsed earlier this month due to differences between the United Arab Emirates and Saudi Arabia. A proposal by Moscow and Riyadh seeking extension of output curbs till 2022 was blocked by Abu Dhabi because both countries rejected its proposal to increase oil production.
The dispute among close allies increased concerns regarding the stability of oil-producing countries, controlling over 50 per cent global oil production. Post the meeting, the countries said that the production cuts put in place last year would be phased out by September 2022.
Here are 5 FTSE AIM All-Share Index oil and gas stocks, let us see how the news impacted their share prices:
Serica Energy Plc (LON:SQZ)
The mid-tier oil and gas company’s shares have given a one-year return of 26.44 per cent. The shares with a market capitalisation of £412.96 million and a price-to-earnings (PE) ratio of 55.04x, holds a dividend yield of 2.27 per cent.
The shares were trading at GBX 148.60 on 19 July at 08:48 AM GMT+1, down by 3.51 per cent.
The company recently announced that its Columbus development well flow tests results have been successful. A well with a depth of 17,600ft was drilled at the Forties Sandstone formation and a flow test was performed successfully after the completion equipment was installed inside the well. Columbus start-up would commence in the fourth quarter of 2021 and is expected to produce about 7,000boe/d, and 75 per cent of it is expected to be gas.
Pantheon Resources Plc (LON:PANR)
Shares of the oil and gas exploration with a one-year return of 229.14 per cent and a dividend yield of 32.41 per cent, holds a market capitalisation of £379.80 million.
The shares were trading at GBX 55.80, down by 3.13 per cent on 19 July at 08:51 GMT+1.
The company’s internal analysis of the SMD-B area in Alaska’s Talitha #A well has shown higher than anticipated resources. According to the company, the area can potentially contain 2.6 billion oil barrels oil and a prospective 404 million barrels that can give profitability of 50 per cent, compared to its earlier estimate of 1.8 billion barrels of oil.
Jadestone Energy Plc (LON:JSE)
The shares of the oil and gas production company have a market capitalisation of £352.41 million and a year-to-date return of 26.67 per cent. The shares have a dividend yield of 1.53 per cent.
The shares were trading at GBX 76.00, unchanged on 19 July at 08:52 AM GMT+1.
The company recently got Petronus approval for its acquisition of SapuraOMV Malaysia assets. Jadestone would be paying $9 million for the acquisition, and the process is expected to be completed by 30 July 2021.
88 Energy Limited (LON:88E)
The Alaska-focussed oil exploration company has a one-year return of 670.70 per, with a market capitalisation of £262.22 million.
The shares were down 4.44 per cent and were trading at GBX 1.85 on 19 July at 08:53 AM GMT+1.
The company drilled the Merlin-1 well in the north slope of Alaska, and an analysis of its extracts has revealed they contain hydrocarbons. The phase 2 results, designed to show not only the presence of oil but also the nature of the source rock, are expected in the next few weeks.
Touchstone Exploration Inc (LON:TXP)
The Canadian oil and gas company’s shares have a one-year return of 54.73 per cent and a market capitalisation of £184.39 million.
Touchstone shares were trading at GBX 87.50, unchanged 19 July at 08:54 AM GMT+1.
The company recently executed Lease Operatorship Agreements for ten years with Heritage Petroleum Company for its blocks of CO-1, CO-2, WD-4, and WD-8. One well in each block would be drilled in the second half of the year, as approved by the board.
