Are these two small oilies heading for a golden future?

I've been saying all along that oil-producing nations were eventually going to do something to get oil prices up, because many of them simply couldn't afford to keep selling at such low levels.

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And now it's happened, with OPEC having finally agreed last month to limit production. It's uncertain whether Russia will join in, with contradictory noises coming in the past few days, but the worst of the oil crash is surely over.

While the time it took wasn't going to seriously damage the big producers like BP and Royal Dutch Shell, the big risk for smaller companies was that they wouldn't survive the hard times -- and we've already seen Afren hit the wall.

Can the smaller ones survive?

Does Volga Gas(LSE: VGAS) face a brightening future? The AIM-listed explorer based in Russia's Volga region recorded its highest month's production of the year so far in September, with a 12% rise from August's figure to 7,929 barrels of oil equivalent per day.

That comes days after interim results showed revenue more than doubling to $15.9m, with a healthy pre-tax profit of $1.5m (compared to a loss of $1.6m in the first half of 2015). The firm reported a net cash inflow from operations of $7m after an outflow of $1m a year previously. But wait, I hear you cry, aren't these small cap oilies all saddled with debt? Actually no, Volga Gas enjoyed a cash balance of $12.5m at 30 June, with no borrowings.

We're looking at a company that's expected to take home positive earnings this year, with a nice EPS rise forecast for 2017, which would result in a P/E of 11.6. With Volga bringing more production online and the oil world heading into an upbeat-looking time for the price of a barrel, that looks good to me.

The share price is up 87% since January's low, to 51.25p, but I think there could be more to come -- though with the commensurate risks of being dependent on Russia.

Terrorism threat

Speaking of geographic risk, Eland Oil & Gas(LSE: ELA) is up against Boko Haram in Nigeria, though that shouldn't stop us looking at the shares as an investment possibility. Boko Haram wants to destroy the country's oil and gas infrastructure, but Eland's operations so far remain unaffected.

But the scares have helped push Eland shares down to a low P/E of 7.3 based on forecasts for this year, and with a big turnaround in EPS on the cards for 2017 we'd see that multiple pushed down as low as just 1.5! And that's after a doubling of the share price since January's low point -- it's been an erratic ride, but the shares have now reached 43p after trading for as little as 21p back then.

Eland delivered a decent-looking interim report last month, and though revenues were modest at $1.1m, the company ended June with a cash balance of $20.6m after a successful equity placing in April. Eland has drawn down $15m of a $25.4m borrowing facility, but with higher production rates expected to lead to that handsome earnings rise in 2017, I don't see any problem there.

Analysts have a buy consensus on Eland, with an average price target of a little over £1 -- and I find it impossible to disagree with them.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended BP and Royal Dutch Shell. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.