Bargain Barrel: Five sub-$25m market cap oilies

With oil prices sky high, companies with existing production seem in for plenty of joy. But there are a few junior oil producers with market capitalisations below $25m.

We’re literally giving you the good oil here.

With oil prices likely to remain elevated for some time to come, companies with existing oil production are likely to enjoy their time on the market.

But there are still a few junior oil producers with market capitalisations below the $25m mark.

WINCHESTER ENERGY (ASX:WEL)

MC: $20m

Winchester produced 9,278 barrels of oil equivalent during February and pocketed a tidy US$813,652 ($1.09m) in gross revenue based on an average received price of US$91.75 per barrel.

The company’s specialty is its extremely low operating costs of about US$4.04 per barrel, due to being small and nimble, and thus able to acquire very cost effective projects under a lower price environment.

It also has high hopes for secondary exploitation of the Varn oilfield, which produced 1.4 million barrels between the 1950s and 1984 when it was plugged and abandoned.

SACGASCO (ASX:SGC)

MC: $13.5m

During the December 2021 quarter, Sacgasco reported oil and gas production of 35,071 barrels of oil equivalent to generate revenue of $796,000, up about 33% on the previous quarter.

Much came from its stakes in the Red Earth and Alberta plains projects in Canada with the rest coming from its gas assets in California, US.

The company is also participating in three oil development wells at Alberta Plains. These are estimated to cost $2.7m ($540,000 net to Sacgasco) and expected to increase production by 40 barrels of oil equivalent per day (boe/d).

At the reference price of US$85/bbl, production from these wells is expected to pay back capital and operating expenditure in less than 12 months.

WHITEBARK ENERGY (ASX:WBE)

MC: $12.75m

During the December 2021 quarter, the company produced an average of 208boe/d from Wizard Lake.

Upcoming activity includes drilling the Wizard Lake Rex-4 development well that is expected to produce 300 barrels of oil and 1.4 million cubic feet of gas per day initially before declining to 85bpd and 630,000 cubic feet per day over the first 12 months.

Payback is expected in just five months.

LION ENERGY (ASX:LIO)

MC: $21.75m

Lion has a 2.5% interest in the SNB Production Sharing Contract on Seram Island, Indonesia, that has yielded cumulative crude oil production of more than 19 million barrels since starting in January 2003.

During the December quarter, the company’s share of production from Oseil totalled 3,324 barrels, modest compared to its peers. However, Lion has been progressing planning and negotiations for a 200km seismic program at its 60% owned East Seram PSC.

This survey is aimed at maturing the high-graded prospects and leads of the exciting Manusela fold belt play to “ready to drill” status.

Happily, most of the planned work will be funded by its partner OESC.

PILOT ENERGY (ASX:PGY) and TRIANGLE ENERGY (ASX:TEG)

MC: $17m, $16m

Pilot Energy and Triangle Energy both draw their production from the Cliff Head oilfield in the Perth Basin offshore WA.

Cliff Head currently produces 535 barrels of oil per day, though this is expected to increase to about 690bpd following generator repairs.

The joint venture is currently considering two short-listed options to export Cliff Head oil. Both involve trucking oil produced from their Arrowsmith facilities, though this will allow for continued sales of crude from Cliff Head. Technical work is also underway to further increase Cliff Head oil production.

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