Are Xcite Energy Limited, AFC Energy plc And Victoria Oil & Gas plc Set For Stunning Recoveries?
Another week, and the price of Brent Crude is remaining relatively stable at around $34 a barrel. That could all change in no time, of course, but if the black stuff really has started its long-awaited recovery, which smaller companies might help to you the biggest profits?
Xcite Energy(LSE: XEL) shares have plunged by 70% since their 2015 high point in May, and stand at just 12.6p as I write these words. But there's been a little bit of optimism of late after the firm announced that its licence containing the undeveloped Bentley field in the North Sea has been extended until June 2017. The company is facing the twin tasks of finding the funding to develop the field and also to repay outstanding senior secured bonds which are due for repayment in June 2016.
This licence extension is expected to help with both of those with Xcite telling us it has "received indicative proposals for development funding". There's plenty still to do, but chief executive Rupert Cole says the company is "focused on delivering a funded first phase field development plan, including repayment of the outstanding bonds". If Xcite can pull it off, the timing could be near perfect for an oil recovery.
Picks and shovels
AFC Energy(LSE: AFC) is one of those "picks and shovels" companies working in the energy industry, with its focus on developing alkaline fuel cells for industrial use. The hydrogen used by such cells still has to come from somewhere and the main source is still petrochemical, but efficiencies and cleanliness should still boost the business further as the cost of the black stuff rises.
AFC is nowhere near turning a profit yet, but the company has managed to achieve electrical output of more than 200KW at its development plant in Germany. A new strategic partnership with German engineering consultancy plantIng won't do it any harm either, so it AFC a good buy now?
I reckon it's only one for risk-tolerant technology investors, but with the shares down 63% since July 2015, to 20p, we might be looking at an attractive turnaround point.
Victoria Oil & Gas(LSE: VOG) is an oil explorer with a difference as its share price has spiked up 86% since 20 January, to 51p -- although it is still down 46% since its April 2015 peak. The latest price driver was the firm's announcement of its purchase, from a Glencore subsidiary, of a 75% stake Cameroon's Matanda licence.
The news came on the back of January's operations outlook for 2016, which predicted a 30% increase in supplies of gas to customers and the drilling of two more wells, coupled with plans to grow the firm's pipeline network and move into new products such as Compressed Natural Gas.
Again there are no profits yet, and no forecasts, but again the timing could be nice for those with steady nerves.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.