Falcon Oil & Longboat Energy: Buy Alert?

Highlights

  • Oil prices are expected to be impacted by US August jobs data to be announced later today.
  • Falcon’s shares were trading at GBX 9.70, up by 97.56 per cent
  • Longboat completed its farm in agreement with oil major Equinor, Japanese petroleum group Idemitsu Kosan and European energy firm Spirit Energy recently.

Oil prices were trading up ahead of the key US job data set to be announced later today. According to forecasts, US August non-farm payrolls data is projected to rise by 750,000, compared to 943,000 reported in July.          

Also, the impact of hurricane Ida and the weakening US dollar against other currencies have helped oil prices strengthen this week. The US central bank may plan to roll back its pandemic induced asset-buying programme if the labour market shows signs of improvement. 

Moreover, the OPEC+ may not ease its production cuts which can help continue the oil rally. Brent Crude November futures was trading at US$ 73.44, up by 0.56 per cent as of 3 September 2021 at 12:30 PM BST.

Given the current mood of firming oil prices, let us take a look at 2 trending FTSE AIM All-Share index listed stocks in the oil and gas sector and see how they reacted to the news:

  1. Falcon Oil and Gas Ltd (LON: FOG)

Falcon Oil and Gas is a global oil and gas company involved in the exploration and development activities of unconventional oil and gas assets.

The company reported its production results at its Amungee NW-1H well based in the Beetaloo Sub-basin in the Northern Territory in Australia. The findings included a normalized gas flow rate in the range of 5.2 MMscf/d and 5.8 MMscf/d per 1,000m of horizontal section.

Falcon’s shares were the highest riser on the LSE in today’s trading session, following the news.

(Image Source: Refinitiv)

Falcon’s shares were trading at GBX 9.70, up by 97.56 per cent on 3 September 2021 at 11:15 AM GMT+1. Meanwhile, the FTSE AIM All-Share index was at 1,309.55, up by 0.14 per cent.

The company’s market cap stands at £48.21 million, and its year-to-date return is at 10.44 per cent as of 3 September.

Related Article: 3 FTSE oil and gas stocks to watch ahead of Storm Ida

  1. Longboat Energy Plc (LON: LBE)

Longboat Energy is a near term, and low-risk exploration and production oil and gas company focused on the North Sea.

The company’s shares extended gains today and was amongst the highest risers in the oil and gas sector on the LSE, following its farm in completion.

Longboat completed its farm in agreement with oil major Equinor, Japanese petroleum group Idemitsu Kosan and European energy firm Spirit Energy on Wednesday.

Farm in agreements is when development, exploration and associated costs are borne by one party in exchange for working or ownership interest of a well.

(Image Source: Refinitiv)

Longboat’s shares were trading at GBX 77.00, up by 8.45 per cent on 3 September 2021 at 11:37 AM GMT+1. The company’s market cap stands at £40.23 million as of 3 September. Meanwhile, the fossil fuels sectoral index was trading at 5,170.24, down by 0.16 per cent.

Bottom Line

Ongoing tight oil supply, impact from hurricane Ida and weakening US dollar indicates that oil prices may continue to rally for the near term. However, investors must also keep an eye on the upcoming OPEC+ decision on easing production output, as that will also play a key role in global oil price movements.

Falcon and Longboat both have strong fundamentals, however, investors should time their investment properly as both stocks are currently touching highs due to recent favourable announcements.

Comment


Disclaimer