The 2017 bucket list and 2016 results.

The bucket list, 2016 results.

The final shake-up for the 2016 bucket list shows a very commendable result, of the 2016 squad of 14 the top three companies rose by over 400%,  to get into the top 6 you needed to be up by 187% and only two stocks ended up down on the year. Indeed a difficult squad to get into and even the bottom 2 retain their places for this year.

  1. Ithaca Energy +525%
  2. Hurricane Energy +505%
  3. Sound Energy +425%
  4. Premier Oil +290%
  5. Tullow Oil +203%
  6. Faroe Petroleum +187%
  7. Cairn Energy +63%
  8. Bowleven +44%
  9. Amerisur +19%
  10. Parkmead +18%
  11. Victoria Oil and Gas +11%
  12. Pantheon Resources +2%
  13. Rockhopper Exploration -3%
  14. Far Limited -12%

So, many congratulations to all these companies this performance takes some doing. I wont go into detail as the 2017 list covers all the ins and outs…

The 2017 Bucket List

A few words about the bucket list for those who weren’t here this time last year. The bucket list was set up during the oil price crash at the request of a leading light in the Fund Management industry who isn’t by his own admission an oil expert. As an investment trust expert he wanted a basket of stocks that would protect him from penury but might bring some winners whilst accepting some losers. The 2016 list did include two shares that were down but both were special situations and I am running with them both again.

The shares in the list have to have either a good broad portfolio of assets or one or two game changing ones, this list is not entirely defensive and builds in some risk. All the companies have to have very strong management capable of making difficult calls and reacting swiftly to opportunities as they arise. These companies need to be in strong financial positions, I know that sounds simplistic but its pretty key and particularly so when dealing with partners or operators to whom they are at the mercy of. The last two years have shown the need for efficiency, the industry has a reputation for ‘gold taps’ in the good times, we now know that the business can run on a much leaner mixture than ever was thought. Part of this is a need for realistic asset values which can be stress tested at a wide range of oil prices including downside, worst case scenarios. Flexibility is also important, with drilling timetables able to be pushed back if conditions look like they might justify a pause in a programme.

The oil sector in the last two years has been very much the ‘haves’ and the ‘have nots’ with the successful players making hay as the list shows, in some cases spectacularly. This doesnt hide the fact that in this time there have been a number of companies that have fallen by the wayside, proving that investors must identify the ‘torpedo’ stocks. (Credit Mike Geering)

So, thanks to Adrian Collins who started this process off and I hope has become considerably richer as a result, readers should know that I do not buy or sell any shares that I recommend in the blog.

Changes to the list are by their very nature fairly limited, this year the performance has been exceptional but one is always trying to tweak it a bit. The chances of another year like last year are slim, the oil price bottomed in February and gave a strong, fair wind to those efficient companies ready to take advantage of the situation. It is interesting to note that of the 14 stocks, only two had what can be described as being game-changing discoveries, others made do with sticking to the knitting. During the last year I made no changes at all to the list, it isn’t always like that but there were no exceptionally bad performances nor ones that required top-slicing. This year I think that will be different, I have swapped out three for three new stocks but have a very interesting bench of subs who I am sure will be deployed before long. There are one or two big management changes in the wind and I am aware of one or two exciting relaunches that might force themselves into contention before long.

Staying in the list…

The stocks that stay in the list have mostly good reasons to do so. Ithaca has fine management and with Stella about to come onstream the financial side looks increasingly good. For Hurricane the party has only just started but at what a pace! I expect further good news from the Lancaster ‘hub’ this year and while they will need to finance the development i’m sure there are plenty of opportunities on that front. It will be an important year for Sound as they move ahead on the huge Tendrara find in Morocco but dont forget Badile and the management here do not let the grass grow under their feet. Premier was the highest risk last year by a mile and broke my rule about funding but it has done well operationally since then. I expect the funding to be sorted and then Tolmount and Sea Lion to move ahead. For Faroe I expect more of the same, highly successful exploration in Norway and hopefully in the UK adding to a really good portfolio of assets. Bowleven I have written about a lot recently, I think that I expected too much last year but the prospect at Etinde remains as valuable as before. With plenty of cash and solid management Bowleven is under-rated in my view. Amerisur is also too cheap, with many prospects in the OBA hub area giving high value added potential this should be a very good year. Victoria Oil & Gas is arguably one of the most undervalued assets I have looked at, the management are determined to create a utility scenario from the gas to the customer. Gas found by them at Logbaba and through their own pipes to clients in Douala is a very exciting prospect and the demand is almost limitless. Pantheon was top in 2015 and evens last year but I still believe that Jay and his partners have ‘cracked the code’ and so I give them another year to find substantial quantities of hydrocarbons in East Texas. For Rockhopper it has been immensely frustrating this year as developments at Sea Lion are restricted as Premier sorts out its finances. I still believe that this world class asset will get the go ahead and in the meantime the company is being proved right about the way it is moving forward in the Greater Mediterranean. Finally Far which has had a proper mare as it has a long tussle over its pre-empt rights in Senegal. The shares have not yet taken into account any of the success which I think could be worth three or more times its current value. 2017 should surely sort this out and  reward shareholders for their patience.

Out of the list-Tullow, Cairn, Parkmead.

All three stocks I am taking out have performed extremely well, indeed they are making way for other stocks having done well. Tullow was one of the most difficult calls last year, indeed I felt quite brave as it wasnt a favourite in many lists but it has done well and management deserve credit for the important decisions they made. I have had no contact from the company in the last twelve months and feel that with a near £3bn market cap it is time for a breather. Cairn shares some of the same characteristics, up 63% on the year with a market cap of £1.3bn, I didnt get to hear the analysts briefing recently for whatever reason but am happy to play Senegal through the admittedly higher risk investment in Far. Finally Parkmead, where I suppose I had been hoping for more exciting things this year, and another company that is almost totally incommunicado has done well but at the moment I see upside scope being limited.

In the new list-SDX Energy-Jersey Oil & Gas-Aminex.

SDX has done much since it came to London and nearly stepped into the list recently with its acquisition and raise. Paul Welch has done very well and has an exciting, high margin portfolio in Egypt with plenty of exploration upside. Added to that is extra added value from the Circle deal in both Egypt and Morocco. Jersey Oil & Gas has come from nowhere to be a genuine North Sea player with a most exciting portfolio of prospects in the North Sea. There is no doubt that JOG will capture the imagination of investors this summer as they prepare to drill their Verbier prospect, made more exciting by the farm-in of Statoil no less. Although this will be the immediate focus JOG should not be considered a one block play and I know that the very strong team are working up a number of potential projects in a number of areas. Finally Aminex which I have been following for some time, now is the time for it to pay back the shareholders who have always believed in it. The last few months have changed much, Kiliwani North is up and running and will produce more than it is at the moment bringing over $1m per month into the company. Appraisal at the Ruvuma PSC continues and there is the Nyuni exploration prospect to bear in mind on the upside. Finally the bringing on-board of a supportive strategic investor last year created the confidence that was needed to bring it all together.

The 2017 Bucket list

Ithaca Energy, Hurricane Energy, Sound Energy, Premier Oil, Faroe Petroleum, Bowleven, Amerisur Resources, Victoria Oil & Gas, Pantheon Resources, Rockhopper Exploration, Far Limited, SDX Energy, Jersey Oil & Gas, Aminex. 

So, that’s where we are starting from this year, as I said I think that changes are more likely as my oil price expectations are reasonably modest and the second half of the year might be a very different game to play. E&OE, Be lucky…

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53 comments on “The 2017 bucket list and 2016 results.
  1. Andy says:

    No Savannah. Damn !

    • Malcy says:

      Hi Andy
      Another very close call and there is little doubt that they will make the list soon, i am meeting Andy in the next week or two for an update, will keep you posted, its another slow burner.
      Kind regards
      Malcy

    • Chris G says:

      If moratorium shelved look no further than FOG

  2. TJ says:

    What about IOG & RRL? My understanding was you have been quite positive about these 2 shares.

    • Malcy says:

      Hi TJ
      Many thanks for your note, and yes i have been positive on both these stocks and still am. If i put all my favourites in i could add at least another 10 stocks making it unwieldy, it already has 2/3 stocks to many i think!
      Both these stocks need to prove things, Range is probably nearer with the water-floods etc but needs to get over its historic problems, so far i believe the story. IOG is another management i really like and they have worked so hard to get to where they are now, just a little further to ensure the whole dream works…
      Kind regards
      Malcy

  3. Thomas Henry Carson says:

    Of the various lists, suggestions and advice columns, free and otherwise, this seems to be held in the highest esteem by posters who fail to embarrass themselves. For this reason as well as the obvious success of many listed stocks this will be my premier go to page for moral uplift in turbulent times on AIM.

  4. Alan Hawkes says:

    A very interesting read, i did notice that you missed out one petro matad (matd) very interesting & significant play. I must admit it seems like a very good job otherwise well done!

    • Malcy says:

      Hi Alan
      Many thanks for your comments and i have had some incoming on PetroMatad lately. Unfortunately i have had a number of bad experiences with this company going back over many years so am probably biased against it, maybe i should look again!
      Kind regards
      Malcy

  5. Bruce Alavi says:

    Well I am very disappointed that Ophir is not in the Buket list as they both have a healthy balance sheet as well as good quality assets
    Also why not Enquest another up and coming energy company

    • Malcy says:

      Hi Bruce
      Thanks for your comment and having been quite bearish for a while i have recently been much more positive. Indeed last week i visited the company and met with Bill Higgs whom i have known for many years. I will be writing up my visit in the blog soon and it is certainly on the subs bench for the bucket list.
      Malcy

  6. Falkland Investor says:

    I think Argos resources is worth holding during 2017.

  7. Kit Adams says:

    Especially interested in Hurricane as they have already done very well. Took out a few JOG too. Well done on the ’16 bucket list.

    • Malcy says:

      Hi Kit
      Many thanks for your kind words, it wont be as easy this year in general but i hope to find some of the winners. Much to come in Hurricane as they develop Lancaster and neighbours and farm-out some of the acreage.
      Enjoy JOG and trade carefully, i think that they will have a massive run ahead of the well currently scheduled for August and so there will be good opportunities to pocket some cash, make sure you are correctly positioned when the drill bit spins!
      Good luck
      Malcy

  8. Jonas says:

    I am a little surprised that Wentworth Resources did not make the list. Care to share any thoughts on your evaluation on this company?

    • Malcy says:

      Hi Jonas
      I have met Wentworth twice in recent weeks and am very impressed, as i said on Twitter it is only a matter of time and me doing a bit more work on the company before they join the list.

  9. Dr M bark says:

    In a climate where fund managers are getting “generally a waste of space” ratings, it is refreshing to find a successful forecaster who not only shares information but also audits and publishes results, and also operates in the shared knowledge space. The latter is getting increasingly rare.

  10. RB says:

    What are your thoughts on ’88 Energy Ltd’ – reports suggest that the ICEWINE field could be one of biggest discoveries in Alaska.

    • Malcy says:

      I dont cover 88 Energy after their management behaved poorly in my view the last time they ran a company. I may see them at some stage to let bygones be bygones.
      Kind regards
      Malcy

  11. Mr Howard Cockerill says:

    Hi Malcy, I am a small time amateur investor in stocks, some of which you refer
    to in your bucket list. Sound,Ithaca Faroe. What factors in your valuable opinion, affect their share price, with regards to £ increasing or decreasing
    against the dollar and how significant is it when there is an increase in the price of oil or gas. Does it follow that if £ increases against the dollar
    the share price should be expected to rise, similarly if oil/gas prices increase the share price should increase? I read your blogs and find them very informative, thank you

    • Malcy says:

      Hi Howard
      Thanks for your message and i’m glad you like the blog. I’m afraid i dont have time, or licence to advise personally but on the currency front a weak $ usually helps on the oil price front and UK stocks with dollar debt are helped by a weak pound.
      Kind regards
      Malcy

  12. charlie t says:

    Malcy is a bit wary of TC at Parkmead But i think he still has his finger of the pulse.He like’s to keep his own council TC

  13. Fernando marino says:

    Hi Malcy. Nice summary of the oil market and potential winners, as usual

    What about Enquest PLC. They are about to increase their production aroun 50% with the start up of Kraken.

    • Malcy says:

      EnQuest is looking interesting but I’m not sure that they will challenge too many in the list, always a close call though.
      Kind regards
      Malcy

  14. preciousmaj says:

    I thought CHAR would be on here as they have plenty going on in 2017 – results from 3d seismics in Namibia and Brazil, potential farm outs and drill commitments in up to 4 different areas that will recover cash and give free carry on wells. $25 in cash at the end of 2016 and plenty more to recover in 2017. The RD-1 well will be drilled early 2018 that could net the company 76.8mmbbls. The Namibian acreage looks set to be farmed out soon, southern blocks are estimated to have 10Tcf of gross mean prospective resources and centrals have had new seismics that are in the process of being interpreted.

    • Malcy says:

      I agree that the company is working on a number of things but with no drilling until next year it has to be on back burner i feel.
      Kind regards
      Malcy

  15. Kevin says:

    Hi Malcy . Excellent call for 2016 . Pity I was not into it then . Can you give me your estimated poo for yr end please? As regards Ithaca . Your estimate of bpd by yr end please. Many thanks. Kevin.

  16. Jon says:

    Hi Marcy
    Did President Energy ever get considered?

  17. Jon says:

    Hi Malcy,
    I appreciate you have a limited number of companies to include in the list – was President Energy considered this year?
    Or do you think it’s one for the future – requiring funding for any further Paraguay exploration?

    • Malcy says:

      Hi Jon
      Yes it most certainly was and i spoke to Peter recently who is determined to make up for his mistakes. Very much on the watch list.
      Kind regards
      Malcolm

  18. Stewart Adams says:

    Hi Malcy,

    What’s your view on Serica Energy??

  19. Jon says:

    Hi Marcy,I’m a small investor looking at SOLO I already hold AEX,it looks like a well managed/funded company with a imminent rise in sp if all goes well.The benefit of your thoughts on this would be much appreciated.

  20. Chris says:

    Hi Malcy,

    Any thoughts on Solo Oil? A good start to the year for them and more results to come soon it seems.

    Regards,
    Chris

  21. Alexander Pizzie says:

    Malcy,

    I have been following your blog for a while now, and find your information very useful.

    It would be interesting to hear your thoughts on UK Oil & Gas (UKOG); I appreciate that they are nowhere near the standards of some of these companies in your bucket list. However, with projects like Horse Hill, IOW, Brockham, Holmwood etc, perhaps they may become a future bucket list contender? Thoughts? (I appreciate you can’t give investment advice – Just interested to see your thoughts on the company/management and if you have met with them or not).

    Kind Regards,

    Alexander

    • Malcy says:

      Hi Alexander
      Thanks for your comments, much appreciated. I’m afraid that i dont cover UKOG for a number of reasons, if i ever do, and i have been known to change my mind, it will be in the blog.
      Sorry not to been of any help.
      Kind regards
      Malcy

  22. Rusty says:

    Malcy,

    Just came across your blog – fantastic stuff – really interest in-sight!

    What are your thoughts on Petro Matad for the up and coming year? They’ve had an interesting few months and if you believe some reports they may have found quite the oil field…

    • Malcy says:

      I havent looked at Matad for many years, it may have something and will keep an eye but has poor history of investor relations.
      Kind regards
      Malcy

  23. Mal says:

    Malcy
    If you could only take two of your selected, hold for a year and sell, who would that be?
    Cheers Mal

  24. pete miller says:

    Hi malcolm. Only started reading your blog recently and enjoyed the Q & A
    Very impressed with your 2016 bucket list record.
    And will be following your blog very closely as your knowledge seems to be very good.
    Keep up the good work. Pete

  25. Ross Gilbert says:

    Any thoughts on TLOU?

    Seem to be off the radar with big potential. And a proven CEO?

  26. James says:

    Hi Malcy,

    How come Falcon isn’t on the list? Heard your interviews on them

    Also, any chance of getting your current thoughts on PMO ?

    Thanks a lot!

    • Malcy says:

      I love Falcon as you know but until the moratorium is cleared it is not investible unless you are happy to take that risk, i think that i would! PMO out today, stock is in bucket list.
      Kind regards
      Malcy

  27. Jon says:

    Hi Malcy,
    Are Far not quoted on a London Stock exchange? I thought all the companies you have in the bucket list would be. I can only see their shares quoted on the Australian stock exchange or have I got that wrong?

    Kind regards

  28. Alister says:

    Hi Malcy
    Thanks for sharing your bucket list, your knowledge and experience is very helpful when making decisions about these companies.
    I thought this might be useful for anyone following this bucket list, it is a Google portfolio spreadsheet with all the companies from the bucket list already entered. I’ve set the purchase date and price set at 1st Feb 2017 as that is the date you first posted this list.
    https://drive.google.com/open?id=1w37f0H3velCju72Lb2rV8pG_XUpJjN_DwAjd9dgbEwo

    Hopefully this worked. 🙂

  29. Alister Brown says:

    Hi Malcy
    Here’s a wee follow up from my last comment. For some reason the spreadsheet I listed earlier has now become very ropey. Not sure if it is Google or Yahoo at fault but I have removed the Yahoo connections so all prices are now from Google Finance. If you really want the Yahoo version it is still there but this is the new Google version, just remove the “” marks.
    “https://docs.google.com/spreadsheets/d/1CPHzA8UfRbRfu4KRD0F_toRo6fW-_q_U8aeqRUBflCA/edit?usp=sharing”

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