Angus Energy Plc

Angus Energy Plc (LON: ANGS) is an oil & gas producers company engaged in the business of oil extraction, and development and production of hydrocarbons.

Recent News
On 18^th February 2020, Angus Energy announced the reduction of the loan balance. The company received a notice from its investors (YA II PN Ltd and Riverfort Global Opportunities PCC Limited), related to the conversion of Loan amounting £100,000 to shares. The company’s outstanding balance of loan declined to GBP 0.8 million.

 Financial Highlights – H1 Financial Year 2019 (31^st March 2019, GBP, thousand)

(Source: Interim Report, Company Website)

In the first half of the financial year 2019, the company’s revenue increased to GBP 137 thousand versus GBP 19 thousand in H1 FY2018. The group reported a gross profit of GBP 15 thousand in the first half of the financial year 2019 versus a gross loss of GBP 53 thousand in H1 of the financial year 2018. Due to an increase in the operating expenses for the period, the company reported an operating loss of GBP 1,658 thousand in the first half of the financial year 2019 versus an operating loss of GBP 1,096 thousand in H1 FY2018. The group’s LBT and LAT (Loss before tax and loss after-tax) stood at GBP 1,654 thousand in H1 FY2019 versus an LBT and LAT (Loss before tax and loss after tax) of GBP 1,093 thousand in the first half of the financial year 2018. The company’s basic and diluted loss per share stood at 0.004 pence in the first half of the financial year 2019.

Share Price Performance

Daily Chart as of February 19^th, 2020, before the market close (Source: Thomson Reuters)

Angus Energy Plc shares were trading at GBX 0.665 at the time of writing before the market close (at 11:59 AM GMT) on 19^th February 2020 and were down by 19.39% versus the previous day closing price. Stock's 52 weeks High is GBX 6.58 and Low is GBX 0.60. The shares of the company have delivered a negative return of 26.11 per cent in the last three months.

Key Risks
The market conditions in which the company operates is full of challenges and might impact the operation performance and reduce financial performance as well. As the company operates in multiple geographies, its profits can be impacted negatively due to foreign exchange rate fluctuations.The company is waiting for the approvals from Oil & Gas Authority to start its operations at Saltfleetby. The company’s profitability margins and Return on equity remained in the negative zone from last three years.

Conclusion
The company has showna decline in financial performance in the first half of the financial year 2019. The company’s revenue has increased, while the bottom-line performance had declined, and the profitability remained in the negative zone for the period. The company, through the development of organic opportunities, is focussing on its operations. The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. The company has to wait for a longer duration to get approval from the regulatory authorities to commence its operations, which is disturbing the company to gain operational momentum.

Based on the above rationale, we have given an “Avoid” recommendation at the current price of GBX 0.65 (as on 19^th February 2020, before the market close at 11:47 AM GMT).

TomCo Energy Plc

TomCo Energy Plc (LON: TOM) engages in oil shale exploration technology and develops oil shale assets. It operates in nine oil shale leases which cover around 15,488 acres in Utah.

Recent News
On 17^th February 2020, TomCo Energy announced the selection of Mr Stephen West. Mr West will hold the responsibilities of Director Non-Executive of the company effective immediately.

Financial Highlights - H1 Financial Year 2019 (31st March 2019, GBP, thousand)

(Source: Interim Report, Company Website)
 
In the first half of the financial year 2019, the company reported an operating loss of GBP 519 thousand as compared to a loss of GBP 207 thousand in the first half of the fiscal year 2018. Loss from continuing operations was GBP 524 thousand as compared to a loss of GBP 209 thousand in the first half of the fiscal year 2018. The loss for the period attributed to Equity shareholders was GBP 459 thousand against loss of GBP 202 thousand in H1 FY2018 while loss attributed to non-controlling interests for the period was GBP 65 thousand against loss of GBP 7 thousand in the same period last year.
 
Share Price Performance
 

Daily Chart as of February 19^th, 2020, before the market close (Source: Thomson Reuters)
 
TomCo Energy Plc shares were trading at GBX 1.255 at the time of writing before the market close (at 12:16 PM GMT) on 19^th February 2020 and were up by 2.03% versus the previous day closing price. Stock's 52 weeks High is GBX 8.00 and Low is GBX 0.60. The shares of the company have delivered a negative return of 68.62 per cent in the last six months.

Key Risks
There are certain principal risks and uncertainties associated with the company’s business which could impact its performance. Liquidity and interest rate risks which could affect the operations of the company. Fluctuations in foreign exchange rates could affect the revenue and profitability of the company. Risks related to environment and climate change could hamper the operations of the company. Any change in regulations and government policies could affect the overall business of the company.

Conclusion
The company’s operating loss has increased during the first half of the financial year 2019 as compared to the first half of the fiscal year 2018. However, upcoming field test on the Group's Holliday A Block which emphasizes on the recovery of oil could be a game-changer for the company. The Group uses TurboShale RF technology, which is progressing well. The field test has the potential to recover enough oil, which could confirm the expected recovery rates using TurboShale's RF technology. The Group had recently acquired seven additional mineral leases that cover around 12,500 acres and could produce over 1.2 billion barrels of potential oil. 
Based on the above rationale and associated risks, we recommend investors to keep a “Watch” on the stock at the current price of GBX 1.35 (as on 19^th February 2020, before the market close at 9:05 AM GMT), while we look for any upcoming catalysts in the near term.

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