The Midweek Watchlist: Wednesday 3rd December 2014

Wednesday, 3rd December 2014 12:06 - by Moosh

Those who follow me on Twitter will know that I issue a daily watchlist of shares which I am....watching, and sometimes buying.

I’m not accepting any new followers because I don’t like big groups, but for those who aren’t following me I will issue a midweek watchlist, sometimes with commentary.

On my watchlist today:

AEX (Aminex)

CAZA (CAZA Oil and Gas)

EME (Empyrean Energy)

GDL (Greka Drilling)

GFM (Griffin Mining)

MAGP (Magnolia Petroleum)

NTOG (Nostra Terra Oil and Gas)

OMI (Orosur Mining)

PPS (Proton Power Systems)

PTR (Petroneft Resources)

SBRY (Sainsbury)

UEN (Urals Energy)

UKOG (UK Oil and Gas)

Clearly the watchlist is packed with companies from the oil and gas sector, which is unsurprising given the recent downturn in the price of crude oil. However, is it a reason to panic? I can fully empathise with investors who are concerned about commodity price – anyone can see just how suppressed a sector can become when the commodity determining it falls – as has been the case with gold for the last few years. If the crude oil price is of concern, then I think it’s only fair to compare what a company had been like in its history when the crude oil price was about the same as now - this period of time would be Spring 2009. So, for example, EME and CAZA, how do their oil and gas productions now compare to Spring 2009? I suspect both are markedly up now compared to then, with more to genuinely come from them over the next few years as they continue to prove up their respective reserves (assuming EME doesn’t accept an offer, which is currently still being pondered). Obviously there are other factors to consider, but with the overriding one currently being the crude oil price, then investors need to just stop and think whether what they may believe now to be a sell, should actually be a bargain buy, all things considered.