Penny Shares Guide

Europa Oil and Gas Holdings Plc, a UK company, is involved in the exploration and production of hydrocarbons in parts of Europe and North Africa including Western Sahara and Egypt. The company pursues a strategy of balancing exploration with production. Core oil producing assets are currently in three UK onshore oil fields. A wide range of exploration and appraisal projects are in various stages of development throughout the company’s targeted geological regions.

According to one of the company’s founders Erika Syba, also the company’s operations director, because exploration is very much regarded by investors as cash consuming, the company from early on made sure to get production into the portfolio to generate income. With the production cash flow, not only the company has increased its exploration portfolio, but also continued with other production asset acquisitions.

Exploration Upside

Another company co-founder is an exploration geologist, one of the reasons the company has assembled a quality portfolio of exploration projects and performed successful appraisal work. Other members in the company’s management team also have prior upstream oil and gas background, which enables the company to continue to identify, acquire and develop profit-making oil and gas assets. The natural gas side seems to be more promising for the company. Europa Oil and Gas Holdings Plc had a significant gas discovery in Romania and appraisal work is ongoing. Another potentially world class gas discovery is in the Aquitaine Basin of France and the company is performing evaluation this year.

Production Increase

In order to support exploration activities, field production has to maintain steady, which requires certain investments itself. Based on company estimates, without adding new production assets, production output can be more than doubled from current level within existing portfolio. However, to increase production capacity, facility upgrade will be needed. Other work may be required on increasing the drawdown of certain reservoirs in order to produce more oil.

Shares of Europa Oil and Gas Holdings Plc (EOG) are listed on the London Stock Exchange’s Alternative Investment Market and were at 13.25p as of 25 August 2010.

Boarders and Southern Petroleum Plc, based in the UK, is an oil and gas exploration company with a focus on frontier and emerging projects. The company intends to go internationally to unproven areas of basins for major discoveries. It is currently working on five licenced areas off the Falkland Islands, the company’s first projects since founding in 2004. The work primarily concerns an untested basin to the south of the Islands and the company holds a 100 percent interest and is the sole operator of all projects. The company sees its role in the petroleum industry as one that generates ideas for high value projects and takes out risks to unlock potential new sources.

Pursuing New Opportunities Aggressively

The company’s strategy is to assemble a portfolio of international oil and gas acreage in countries where both political and commercial risk are relatively low. In any play fairway, where possible, the company would like to secure a significant part of the acreages for multiple high impact prospects. The company does not seek partnerships in early stage exploration and relies solely on self-funding. However, the company would use any earlier success to attract funds from other companies when large drilling campaigns take place. Apparently, the company has made a calculation on pursuing frontier exploration projects over those in mature places.

Adopting Leading Technology Vigorously

Because of the higher technical risk profile existed in any frontier and emerging exploration, without the application of some leading edge technology, the risk of success would be even higher. To prepare for exploration, the company has acquired both 2D and 3D seismic data and to mitigate technical risk, it uses a diligent petroleum systems analysis. The company also has a detailed well engineering studies programme related to its offshore deep water drilling.

Shares of Boarders and Southern Petroleum Plc (BOR) are listed on the London Stock Exchange’s Alternative Investment Market and were at 73.50p as of 10 August 2010.

Lansdowne Oil and Gas Plc is an Irish independent oil and gas exploration company. An operator of its own exploration drilling, the company is not involved in any production drilling activities. The company’s business is solely in exploration and appraisal. So far it has been very geographically focused, pursuing opportunities in the North Celtic Sea Basin (NCEB) off Ireland’s southern cost. It holds rights to three standard licences and one licensing option. The agreements mainly covers the shallow waters of the NCSB that is proven in oil and gas prone.

North Celtic Sea vs. North Sea

Lansdowne Oil and Gas Plc has purposely targeted the Irish offshore shallow shelf areas for exploration and exploitation. Comparing to the busy activities in the neighboring North Sea, the proven oil and gas productive NCSB is still relatively under explored. Besides, shallow water drilling always provides a low cost environment. Considering both factors, the company expects to achieve higher returns on investments in the medium term. With a knowledgeable and experienced management team and the technical force that is supported by the company’s comprehensive database, Lansdowne is very competitive within the industry in the North Celtic Sea region.

Long Term Commercial Oil vs. Near Term Shallow Gas

Lansdowne Oil and Gas Plc continually evaluates drillable and quality prospects on its licensed areas. Three oil exploration wells have been successfully drilled and tested with positive oil flows. The drilling areas are proven oil productive horizons that are right beneath a gas field discovered in the 1970s. The company’s gas exploration and appraisal assets sit on both sides of a gas field operated by the integrated oil giant, Marathon Oil of U.S. other gas positions also include some identified Jurassic exploration targets.

Shares of Lansdowne Oil and Gas Plc (LOGP) are listed on the London Stock Exchange’s Alternative Investment Market and were at 5.50p as of 10 August 2010.

EnCore Oil Plc is a UK oil and gas exploration and production company with a focus on exploration and appraisal business supplemented by development and production operations. The company hold licences both onshore and offshore. Most of the offshore projects are on the UK Continental Shelf. The company will also consider deep water interests only in places where its drilling exploration expertise and experience still apply. Onshore projects principally involve appraisal drilling, which balances the risk from high impact offshore exploration drilling, giving the company a carefully constructed portfolio of projects.

Exploration and Appraisal Focus

EnCore Oil Plc’s strategy is to be successful through mostly exploration and appraisal of prospects and discoveries. In selecting operating licences, the company always makes sure that there is an evaluation momentum in place, that is, pursuing only acquisitions of commercially proved reserves. The clear goal is to achieve future major capital growth. Being an operator in some of the projects itself, the company is in a better position to carry out such a mission. Out of the eleven wells that the company has drilled since 2007, eight of them were successful. Another two wells, one for appraisal, have been planned for 2010.

Farming Out and Early Exit Approach

Since development and production is not a main concern for the company, EnCore Oil Plc adopts a unique approach of early exit and aims to farm out some of its high-equity licences through exchanging for other projects or for excess to drilling rigs to advance the evaluation process without incurring further capital investments. And once an evaluation programme is in place, the company is ready for others to take over and so it can move on to the next opportunity. To do that, the company carefully assesses the best time for divesting or swapping its interest in any successful project. Deciding the appropriate time in a project’s life cycle involves the considerations of future capital requirements and its sources, as well as a remaining risk profile.

Shares of EnCore Oil Plc (EO) are listed on the London Stock Exchange’s Alternative Investment Market and were at 54.75p as of 30 July 2010.