Anglo African Oil & Gas Plc – Vastly Experienced Management Team

Anglo African Oil & Gas Plc (LON: AAOG) is a London Based oil & gas and mining company offering a wide range of services, including extraction, exploration, operations, production, management, and development of oil and gas natural resources.

The Group stated that the results for FY2019 (ending 31 December) will be published before 30 September 2020 (date is still tentative).

Recent News

On 11^th June 2020, Anglo African Oil & Gas announced that it has entered into a facility (unsecured convertible loan facility) with Lender (Riverfort Global Opportunities PCC Ltd) for Commitment Amount of around £1,500,000.

Financial Highlights – H1 Financial Year 2019 (30th June 2019, GBP)

In the first half of the financial year 2019, the Company’s revenue was at £173,524 (H1 FY2018: £106,378). Due to an increase in the administrative expenses for the period, the Company reported operating loss of £2,451,710 in H1 2019 versus an operating loss of £2,170,805 in H1 2018. The reported loss before tax and loss after tax was at £2,452,741 in H1 FY2019 (H1 FY2018: Loss before tax and loss after tax of £2,171,606), which reflected the high costs that the Group has incurred in building the team to capitalise on the opportunity presented by TLP-103C. The basic and diluted loss per share was 1.03 pence in H1 2019 versus a basic and diluted loss per share of 2.71 pence in H1 2018.

Share Price Performance


Daily Chart as of July 15^th, 2020, before the market close (Source: Refinitiv,Thomson Reuters)

Anglo African Oil & Gas Plc shares were trading at GBX 0.3745 at the time of writing before the market close (at 2:54 PM GMT+1) on 15^th July 2020 and up by 7.00% versus the previous day closing price. Stock 52 week High and Low were GBX 5.30and GBX 0.11, respectively.

From the technical standpoint, 14-day RSI is currently in an overbought zone, which means the stock price can fall further in the short term.

Key Risks

The market conditions in which the Company operates is full of challenges and might impact the operational performance and reduce financial performance as well. Any change in regulations and government policies could affect the overall business of the Company.

Conclusion

Although the top-line performance has improved, the bottom-line performance has declined for the period. The Company issued new ordinary shares for the settlement of certain creditors, which shows that the company is facing a liquidity crunch.  The Group is taking steps to reduce costs and is reviewing financing options due to significant cash shortfall and lower than anticipated payments. The Company is facing many uncertainties and issue which would hamper business and affect business performance. The Company is facing a cash crunch issue which could affect the operations of the company. The recent facility from Riverfort Global Opportunities will help the Group to meet its liquidity needs. The Covid-19 has increased volatility and reduced the liquidity, which has resulted in a decline of stock’s value.

Keeping in mind the risks faced by the company, investors are recommended to keep a “Watch” on the stock at the current price of GBX 0.3745 (as on 15^th July 2020, before the market close at 2:54 PM GMT+1).

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