In light of the excitement surrounding Tower Resources, we here at ValueTheMarkets felt compelled to share a safer entry into the boom or bust party approach that some private investors appear to take. We called a short/sell on TRP from 6.5p successfully! We then went on to suggest locking in gains sub 4p for a tidy profit.
We see the developments in Namibia to be significantly influential on surrounding plays, none more so than Global Petroleum Ltd (LSE:GBP) who have themselves enjoyed a reflective rise off the back of the new found interests in neighbouring blocks. Unlike Tower, Global hold a pretty decent cash balance against its market cap. We anticipate circa £11m with its market capitalized at £9.5m. The share price has fallen from a 12m high to a 12m low. We now believe the bias should be with the long money buying below 5p.
Aside from Global’s strong cash position and continuous desire to sign strategic partnerships or joint ventures, the company is now perfectly positioned to inhale any reflective positive sentiment from Repsol / Towers drilling campaign with the arrival of the Rowan Renaissance rig which has recently spudded its Welwitchia-1 well at the PEL 0010 block just east of Global Petroleum’s PEL 0029 block.
Should the great frontier deliver another dusty well then your investment downside is significantly limited by the cash balance under management, however should the milestone of first commercial oil be discovered on the great frontier then it will be unavoidable not to profiteer.
“Think back to the rises abreast of the Falkland Islands, when Rockhopper struck oil, pegging it on the map “
Oil & Gas is a thankless industry and particularly unrewarding when things go against you but should a gusher come online then the worlds your oyster. VTM offer an informal outlook on considerations retail punters may choose to appreciate, the art here is entry and exit whilst not trying to reinvent the wheel! We look to target a 40% gain initially over the next 3-6 months.