Hydra Blog........ https://www.hydracapital.ca/2022/09/23/crosscurrents/ ...........but there are two other junior exploration stories that I like given that both are imminently drilling on material oil prospects.
They are i3 Energy (ITE.TO, last at $0.35) and Eco Atlantic Resources (EOG.V, last at $0.49).
ITE is in the North Sea and its Serenity well (currently drilling, 75% ITE working interest) is fairly low-risk as far as exploration wells go. ITE is looking to prove a theory that a thin oil column encountered in a previous nearby well is in fact connected to a thicker oil column up dip. The company’s interpretation makes the drill target look pretty straightforward and, if successful, Serenity would represent a major discovery and growth wedge for the company. ITE even pays around a 5% yield from its existing ~20,000 boepd of North American production, so Serenity is a bit of a free call option.
The other one, EOG, has no production, but it has a lot of exposure to emerging hydrocarbon fairways in offshore West Africa. In the near-term, EOG’s most relevant asset is its Block 2B exploration target in the nearshore of South Africa’s northwest coast. The company is about to spud the Gazania-1 well in order to test its theory that a down dip oil discovery extends substantially up dip, potentially holding some 300 million barrels of oil. EOG has a 50% interest in the well and it’s the kind of well that will attract attention if it hits, maybe even before. On success, I think either stock could see a step change in valuation, so I own them both in moderation. And yes, I still own some Africa Oil (AOI.TO, last at $2.53) as I think it’s just too cheap not to own.