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US Oil & Gas (USOG) is one of the most obvious joke companies going. On Bulletin Boards and on twitter its shares are ramped by an army of devoted followers. They are on the ramp again today and the shares are now £1.75 valuing this POS at £72 million. This is comedy. Already the loons are calling it back up to its peak of £6.90 and way beyond once again urging all to get involved before it is too late. If you dare to point out that the emperor has no clothes you are urged to “shut up and stop embarrassing yourself.” Well that does not work with me.
Firstly the shares are traded on a very lightly regulated joke Danish matched bargain market GMX. As such the share price is meaningless. Try to buy or sell a big block and you move it wildly. This is a company whose shares were suspended on PLUS because there was a “disorderly market” in them. So do you honestly believe this share price is true and fair? I stress at this point that I regard the rampers as investors, not the company.
Secondly the company has drilled one well ( Ebiana-1) and has only enough cash to drill one more at Hot Creek Valley in Nevada. The company has gushed on about how this field could hold 67 million barrels of oil. That allowed it to get some handy placings away. The reality from the first well was less than glorious.
Of 30 zones tested 26 came up as dry or bearing water. Two zones brought oil to the surface. CEO Brian McDonnell stated on the back of that:
The fundamentals of this company are better than they have ever been. From having “potential” oil bearing zones, we have proven productive zones, including a very large one.
We are in the middle of the work-over programme. We have every confidence that we will be able to flow this well.
I won’t predict a flow rate, but the signs are very good indeed.
We have a confirmed discovery, and it looks large. We just want to get on with the next part of the programme
But Brian showed his form here and his class as there was no way that he could have made that statement in an RNS even on the lottery that is AIM. Drilling has been suspended while data is sent away for analysis. Until that data is analysed you cannot state with any degree of certainty at all what the size of your discovery is, what flow rates will be, what recovery rates will be based on the porosity of the rock or what the cost of extraction will be. There is thus no evidence at all that this is a commercial find.
And to put Hot Creek into context. The entire State of Nevada has in a 100 year oil history produced just 51 million barrels of oil with 90% of that pre 2002..The largest single field in the State today is 30 miles away from Hot Creek and produces 427,000 barrels a year.
So the odds are that Hot Creek is not large and there is NO hard evidence that it is commercial. Yet US Oil & Gas is now valued at £72 million. That is (for instance) more than Northern Petroleum (LSE:NOP) which has £20 million cash, generates £15 million operational cashflow a year in Holland and has 52 million barrels proven reserves in Italy and a 1.25% stake in a potential multibillion barrel field in Guyane.
Anyone who buys this stock today might make money. I just do not believe the share price is a true share price so god only knows where it will go. But the company is not worth anything like £72 million and so to invest rather than gamble you are certifiably mad if you invest at these levels. Or indeed any levels.
I penned a detailed analysis of the truly worrying history and management issues at this company and explained ion far more detail why the shares are not worth a fraction of the share price a week ago. I am not going to recycle copy.
You can read that piece in full here
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Libertarian investment writer Tom Winnifrith writes extensively for a number of US and UK financial websites. All of that material appears on his own blog, which also carries his extensive original non financial material, at TomWinnifrith.com – for alerts on all Tom’s writings (except for that free share tip) follow him on twitter at @tomwinnifrith
Reminds me of some of your piss poor ramps over recent years when many said you were way off course and yet you carried on regardless. NXS was a classic example of a ‘kings new clothes’ scenario.What goes around comes around.
Yes Trevor some of my share tips did not work. Others did. Winners outmarked losers heavily and my average gain per tip over 12 years and 241 tips was 42.7%
Thanks for giving me an opportunity to remind folks of just how good my record was and to advertise my new Nifty Fifty service where I am already doing very well.
Much appreciated
Tom
My pleasure, although I suspect people are judging you more on your performance over the last year or so.
Tom,
On reading your 12 years and 241 tips was 42.7% boasting I can’t stop laughing. well no sensible person would be following a 200 tips when most are utter rubbish tips. You got a special fame in the city as the only fund manager whose recommendations were a poorr pzzz when gold prices were in uptrend. Did you agree that. Also can you count down how many followed all your 241 tips to make that 42.7%. The answer will be a straight zero. At the same time, count how many failed hefthy following most of your tips. The count will be huggge, sure hundreds of them. Before you put your nose in the gap of other, wash yours first. your arrogance will keep in the same failure position.
Get a good life and consult a psychiatrist soon. You are a man who blamed Simon Cakewell and other seller for RSH downtrend, now pointing fingers at other directors. Ask yourself seeing a mirror, “am I capable of doing business and share tipping”. Because everybody knows only new entries follow you and not experts. No difference between some so called dodgy directors and failure director (yes you)
get well soon.
Dan
Tom,
To conclude on your “average gain per tip over 12 years and 241 tips was 42.7%” drama, I would say that is like saying “I throwed stones at a ripped cherry tree and got few fruits”. You don’t need skill to tip 241 shares to get a average 40 odd %.
Can you tip 10 shares from now to prove all 10 are 40% profit fitting one. Yes just 10 and all 10 yield 40% profit in 3 months or 6 months. You can’t because for your eyes nothing looks good. An dim mind often thinks in a dim way. Blaming others you ran out of RSH doors, with fear and shame that you would be put off the doors, now you blame others and point others as failure. what a wise man you’re. Don’t shout loud of “average gain per tip over 12 years and 241 tips was 42.7%” to hide your failure and failing life journey.
I might not be genius or expert to say this, but Your arrogance will keep in the same failure position.
Take care and get well.
Dan
Tommy, Tommy, Tommy…
The only joke around here is your patchy track record of calling anything right.
42% in 12 years? Hardly ground-breaking (even with the usual 50% embellishment factor applied).
I have watched this company for over two years. The reason is that my company drilled 6 wells out there chasing the same Grant Canyon Production.
I was shocked when this young man proclaimed a gusher. I knew that US oil would be experiencing the exact same production problems that everyone has. i even reached out to them and never got a call back.
Case in point there are approximately 19 dry holes surrounding the prolific Grant Canyon Vertical reservoir of oil. To date the only real money that was made out there was a transportation company called petro source that had the contract to haul grant canyon oil to Salt lake City Utah and of course Apache and others who owned the well. Nevada oil is an enigma wrapped in a mystery and I have seen more oil wells drilled in one county in Texas. So the Jury will be out until some real money gets spent out there. But I doubt it will be them.