By contrast, oil and gas exploration company Hurricane Energy (LSE: HUR) has recorded a fall in its valuation of 50% in the last three months. Could it be worth selling in favour of its resources sector peer for the long term?

A positive update

Amur’s update released on Tuesday showed that the company continues to make encouraging progress with its drilling programme. Its drilling now totals 13,142 metres, with 6,006 metres completed at its IKEN deposit and 7,136 completed at its KUB deposit. This means that around 65% of its planned drilling for 2017 has been completed.

Since May, drilling has been focused at the company’s IKEN deposit along the western 1,600 metres of the 2,800 metre-long ISK target, which is in between the IKEN and KUB deposits. Widely spaced holes have confirmed the presence of mineralisation within two distinct pods with a total combined mineralised strike length of around 1,200 metres. Drilling indicates both blocks average in excess of 0.9% nickel and 0.2% copper at average thicknesses of more than 35 metres. Importantly, the thicknesses are suitable for underground mining.

Negative news

Clearly, the drilling update from Amur has been well received by the market. This is in contrast to the recent performance of Hurricane Energy, which on Wednesday announced that it may not progress with its pre-emptive offer for $5m of the company’s shares.

It was planning to provide shareholders with the opportunity to subscribe for shares following its $530m fundraising. This was intended to be at an offer price of 32p per share, but since the announcement the company’s stock price has now fallen to below that price level. As such, the firm will no longer press ahead with the pre-emptive offer, unless its volume weighted average share price is above 32p during the next week.

Looking ahead

While the news released by Hurricane Energy has not had a negative impact on the company’s share price, it shows how poor its performance has been from an investment perspective. Certainly, a weaker oil price and a share placing have been at least partly responsible, but investors seem to be somewhat uncertain about the company’s outlook.

This is in contrast to the recent performance of Amur. Clearly though, the mining company remains relatively high risk and dependent on news flow regarding the success of its drilling programme. As such, both it and Hurricane Energy could be relatively volatile places to invest. That means other, larger, resources stocks could be more attractive for risk-averse investors. In terms of their potential rewards though, both stocks could deliver improved share price performance in the long run.

The post Can this 10%+ riser beat Hurricane Energy plc? appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This is good news for Sirius Minerals (LSE: SXX), since it’s going to be reliant on funding from investors and lenders in order to get its potash mine in Yorkshire off the ground. Clearly, the project has huge long-term potential. Food production is set to be one of the major growth areas over the coming decades as the world’s population is expected to rise by around a third by 2050. And although modern farming techniques are becoming increasingly efficient, more effective fertiliser could produce higher yields and become invaluable.

Thus far, the potential for Sirius Minerals’ polyhalite fertiliser is strong. Crop studies have been generally positive and there appears to be significant demand. The question mark looks to be around the financing of the project. While raising £1bn-plus following a brighter period for commodity prices may be easier, risk-averse investors may wish to invest in companies that are already profitable given the high degree of uncertainty likely to continue in the commodity sector.

Long-term rewards

Also benefitting from rising commodity prices this year has been Rockhopper (LSE: RKH). The oil price has almost doubled from its February low of $28 per barrel and in the long run there could be more to come. Exploration spend has fallen in recent months as cutbacks have been made across the industry and this means that with demand likely to rise in future as the emerging world becomes increasingly oil-dependent, the oil price could rapidly rise.

This would be good news for Rockhopper and now that it has merged with Falkland Oil & Gas, it has a stronger asset base. This could yield high long-term returns for the company and with its latest update showing that it has $110m of cash on its balance sheet, as well as an increase in production from its Mediterranean assets, Rockhopper appears to be a sound buy for investors seeking small-cap resources plays.

Long road ahead

Meanwhile, shares in Amur Minerals (LSE: AMC) have disappointed in 2016, falling by around 48% year-to-date. That’s despite the company releasing positive news flow regarding its Kun-Manie prospect. In fact, today Amur Minerals said that it has completed almost half of the planned drilling for its 2016 Maly Kurumkon-Flangovy drill programme at the site. It expanded the pipe at its step-out drilling following the receipt of results from its first drill hole last month.

Clearly, Amur has a long way to go before it becomes a profitable business, but the Kun-Manie prospect has considerable potential. However, with investor sentiment being weak (Amur’s shares are down by a further 6% today) and a number of other resources stocks being cheap and highly profitable, there may be better options elsewhere.

The post Are Sirius Minerals plc, Amur Minerals Corporation and Rockhopper Exploration plc the best small-cap resources stocks around? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Positive outlook

A key reason for this is the company’s opportunity to build a major potash mine near York, with the £1bn+ project set to be delivered in two stages and having the potential to return significant levels of profitability in the coming years. Clearly, a black bottom line is a long way off, but with Sirius Minerals having experienced positive results from crop studies for its polyhalite fertiliser, and  aiming towards signing supply agreements, its medium term outlook remains positive.

Perhaps the major risk on the horizon for the company is financing. With investors nervous about the wider resources sector, fund-raising may prove to be more challenging than previously thought. As such, now may not be the most opportune moment to buy Sirius Minerals, but sizeable share price gains still cannot be ruled out if news flow is positive.

Superb potential for gain

Whilst shares in Sirius Minerals have soared this year, fellow resource-focused company Gulf Marine Services (LSE: GMS) has slumped by 52%, as a lower oil price has started to bite. The operator of self-propelled and self-elevating support vessels is forecast to report a net profit which is 18% lower in the current year than it was last year, which is clearly disappointing. However, with earnings forecast to rise by 28% next year Gulf Marine Services could see a step change in investor sentiment over the medium term.

With Gulf Marine Services trading on a price to earnings growth (PEG) ratio of just 0.1, it seems to offer superb capital gain potential. In fact, a doubling of its share price is on the cards and while its outlook is highly uncertain,  and its share price is likely to be volatile, Gulf Marine Services seems to offer a very enticing risk/reward ratio for long term investors.

Substantial resource

Meanwhile, Amur Minerals (LSE: AMC) today announced that the independent resource update of the Kubuk nickel-copper deposit at its Kun-Manie project in Russia has been completed by SRK Consulting. This is the next step towards Amur completing the definitive feasibility study (DFS), with it now set to develop a comprehensive mine design and production schedule. Furthermore, Amur has a substantial resource from which to define reserves for the DFS having doubled the measured and indicated resource at Kun-Manie in the last year.

Looking ahead, Amur could become a highly profitable mining play in the long run and therefore its share price could feasibly double. However, it remains a relatively small and high-risk business, which is still some way off delivering a sustainable black bottom line. And with the mining sector being so cheap at the moment, there may be better risk/reward opportunities available elsewhere.

The post Can Sirius Minerals plc, Amur Minerals Corporation and Gulf Marine Services plc double in a year? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Shares in Nighthawk Energy (LSE: HAWK) have fallen by as much as 11% today despite the company releasing positive news flow regarding its financial situation. The US focused oil development and production company has received an extension to certain loan covenants under the company’s Reserves Based Loan. This is to allow Nighthawk further time to agree to possible amendments to the covenant and debt repayment provisions of the loan in light of anticipated financial results.

The covenants have been waived until 28 April and encouragingly for Nighthawk’s investors, it expects that new banking arrangements will be in place at or before that time. Clearly, though, this is a highly uncertain time for Nighthawk and even though today’s update is positive, and the company has the potential to deliver improved profitability in the long run, it may be prudent to await further information regarding its borrowing situation before piling in. After all, with a falling oil price causing further misery for the resources sector, the risks appear to outweigh the potential rewards.

Upbeat growth potential

Also updating the market today was Amur Minerals (LSE: AMC). The nickel-copper sulphide mineral exploration and resource development company has completed the full restock and mobilisation of all newly purchased mobile equipment to its Kun-Manie project in Eastern Russia. This positions the company to undertake and continue its development of the project towards the completion of its definitive feasibility study.

Despite this, Amur’s share price has fallen by over 5% today. That could be due to a weaker wider resources market, but it provides an indication of how volatile smaller companies such as Amur can be. However, even when such volatility is factored in, Amur’s long term profit growth prospects remain very upbeat and its potential rewards for investors are substantial. However, with the resources sector offering a number of deeply discounted mid and large operators which are highly profitable, there may be better options available elsewhere.

Margin of safety

One such company is BP (LSE: BP). The oil and gas major has a highly diversified asset base and even though it has paid out $billions in compensation claims for the Deepwater Horizon oil spill in recent years, it still benefits from excellent financial standing which will stand it in good stead during the present commodity downturn.

Looking ahead, BP is expected to grow its bottom line by around 2.5 times in the next financial year. While this forecast is highly dependent upon the price of oil and gas during that period, BP’s current valuation seems to offer a sufficiently wide margin of safety to merit investment right now.

For example, it trades on a price to earnings growth (PEG) ratio of only 0.1 and this indicates that it offers long term growth potential at a reasonable price. So, while not being risk free, BP seems to have an appealing mix of high potential rewards and more financial stability than many of its smaller sector peers.

The post Do BP plc, Nighthawk Energy Plc And Amur Minerals Corporation’s Risks Outweigh Their Potential Rewards? appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of BP. The Motley Fool UK has recommended BP. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Decent-value buy

Netplay has had to negotiate regulatory changes that saw betting and gaming duties rise to £3.8m this year from £0.5m in 2015. The company more than offset the rise by slashing marketing expenses by £4m with a more targeted strategy, and also by reducing operating and administrative costs.

Netplay has a strong balance sheet with £10.8m of corporate cash and no debt, putting it in a good position for pursuing acquisitions as well as organic growth. Management recently looked at purchasing the Football Pools business from Sportech, but decided against entering a sealed-bid auction process, which suggests the board are only interested in doing the right deals at the right price.

Trading on 13.8 times last year’s earnings at a share price of 10.5p, and with cash representing 3.7p a share, Netplay appears a decent-value buy. A dividend yield of 6.3% (which excludes the special) is an added attraction.

Good business but rich rating

Lighting firm FW Thorpe (LSE: TFW) released half-year results this morning, and also saw its shares rise (up 7% as I write). Like-for-like earnings were 7.5% higher, but actual earnings rose 14% thanks to the contribution of an acquisition.

The strong performance, and £22m cash and no debt on the balance sheet, have persuaded Thorpe’s board to pay a 2p a share special dividend on top of a 1.2p ordinary dividend.

Thorpe is a old family-run business, and the board tends not to be gushing about performance and prospects: thus, underlying growth was generally “solid rather than astounding” and management is “cautiously optimistic” about the rest of the financial year.

Thorpe’s shares have had a strong run, and while this is a company I very much like, the current share price of 236p gives a rich rating of 22.6 times trailing 12-month earnings and yield of 1.6% (excluding the special dividend). Not a price at which I’m rushing to buy.

Risky and speculative

News this morning from Amur Minerals (LSE: AMC) didn’t get the positive response from the market that the results from Netplay and Thorpe received. The shares of the nickel-copper explorer with projects in the far east of Russia are down 2.3%, as I write.

Nevertheless, the news was positive. The company reported that it had completed the annually-constructed 350km ice road to its Kun-Manie project and begun the restocking of the site for its 2016 drilling programme. Amur also said it anticipates being able to release results soon showing a successful conversion of 2015’s targeted Inferred resource area to Indicated and to have successfully added 400 metres of Inferred resource.

Given the stage of development and the geo-political location, Amur remains a risky and speculative proposition, well outside my personal comfort zone.

The post Should You Buy Netplay TV Plc, FW Thorpe plc And Amur Minerals Corporation On Today’s News? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of FW Thorpe. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Is the market is rerating these stocks for a brighter future, or is there a risk that prices will slide again?

Amur Minerals

Amur Minerals was one of Friday’s biggest risers, climbing as much as 20%. The catalyst for the gains was news that Amur has signed a non-binding agreement with the Russian government’s Far East and Baikal Region Development Fund.

Amur hopes that this state-backed fund will contribute to the cost of building its proposed Kun-Manie nickel copper sulphide mine. The firm plans to do 15,000m of drilling during the coming summer season, as it works to prepare a Definitive Feasibility Study (DFS). This will be used to try and secure funding for the mine development.

The Kun-Manie asset seems promising and there looks to be a reasonable chance that Amur will make a success of it. But there are still a lot of unknowns, and financing could be tricky. Friday’s deal was only a non-binding agreement. There are no guarantees.

Amur shares have fallen by 50% over the last six months. In my view they remain highly speculative.

Xcite Energy

North Sea explorer Xcite Energy is in a race against time. The firm must find an investor willing to refinance its debts and back the development of its Bentley oil field. The problem is that Xcite has to repay $139.05m of bonds in June 2016. The group doesn’t have this cash.

In better market conditions, Xcite might find a buyer for Bentley, which has proven and probable reserves of 265m barrels of oil. Costs are falling too. In a recent update, Xcite said that development costs had fallen to $30 per barrel.

However, the reality seems to be that the market isn’t interested. If things don’t change, I expect Xcite to default on its bonds in June. For a potential buyer, it will make sense to wait until then, in order to be able to buy Bentley’s barrels as cheaply as possible.

Because of the risk of a bond default, I think Xcite shares could end up going to 0p. In my view, the recent gains could be a good selling opportunity.

Premier Oil

Shares in Premier Oil have risen by 125% from their January low of 19p. The firm’s 2015 results were no worse than expected and operating costs have been cut by 25%. Premier’s deal to acquire the North Sea assets of E.ON has also been well received.

The production from the E.ON assets is well hedged and will generate valuable cash flow. The additional earnings this provides will also increase the amount of headroom available on Premier’s debt covenants.

However, this may not be enough. Premier has net debt of $2.2bn and chief executive Tony Durrant warned in the firm’s results that if oil prices stay low, “further relaxation of covenants may be required”.

In my view this is a big risk to shareholders. Premier may end up needing to issue new shares to repay some of its borrowings. For this reason, Premier looks too expensive to me at the moment.

The post Are Further Gains Likely At Amur Minerals Corporation, Xcite Energy Limited & Premier Oil PLC? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

It’s all down to a major shale discovery in the firm’s Icewine Alsakan exploration announced on 15 February, after anticipation had already been pushing up the price. But the big question is, can the shares in this AIM tiddler keep on going?

Well, the discovery looks like it could be very high quality stuff, with the initial announcement telling us the asset lies in a “thermal maturity sweetspot” (which is, apparently, a very good thing indeed). Then a further update on 29 February made the shale deposits sound even better than originally thought.

Although the apparent quality of the discovery means a profitable farmout deal might be possible, the big risk is that 88 Energy actually has no revenue and there’s no idea yet of the costs to turn Icewine into a productive asset or of where the cash might come from. Still, if you’re brave enough for the risk, you might want to take a closer look.

Minerals recovery?

Shares in Amur Minerals Corporation (LSE: AMC) have lost 83% since their peak in June 2015, to 6.62p, but since a low on 16 February they’ve actually picked up 31%. News of the company’s intended 2016 developments at its Kun-Manie nickel copper sulphide project in far eastern Russia seem to have pleased investors, as the company has been investing in new equipment that has doubled its drill capacity. The new kit is due to be sent out over the ice road this month.

Amur should be able to drill to a depth of 15,000 metres this year, it says, and the company is teetering on the edge of profitability. This year could even be the year in which Amur turns its back on a few very slow years. And I do think that, with production costs being low and its cash reserves strong after December’s equity issue, there’s a decent long-term future for the company. But it’s not without risks, not the least of which is that it’s under Russian political control.

Renewable profits?

AFC Energy (LSE: AFC) is another that I think could be set to turn the corner towards profit, despite its shares having lost 71% of their value since July 2015, to 16.7p.

What encourages me about the fuel cell developer is its strategic milestone plan for 2016, just released on 1 March. It includes developing a second-generation fuel cell plant, and giving it an extended test of more than a month while confirming it meets industrial standards. It also includes finalising design and engineering of its 10kW and 1MW systems, and enabling deployment in 2016 and 2017, respectively; and progressing with a number of international fuel cell projects and strategic partnerships.

I see a promising long-term future, so why are the punters apparently unimpressed? I suspect the main reason is the probably the long lead time before AFC can expect any profits, coupled with very few analysts covering the stock and an absence of recommendations. One for the bold I think.

The post 3 AIM High-Flyers? 88 Energy Ltd, Amur Minerals Corporation, AFC Energy plc appeared first on The Twelfth Magpie.

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• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Wide margin of safety

Looking ahead, this could hurt Santander’s profitability. Although the bank’s financial standing is strong following its fundraising a couple of years ago, its recent update showed that Brazil continues to be a drag on its overall performance. And while Santander is forecast to record a rise in earnings of 5% in 2016, there is a realistic chance of a downgrade to that figure.

While that would be disappointing, Santander has a very wide margin of safety and this means that its share price performance may prove to be strong even if its financial performance is somewhat lacking. For example, Santander trades on a price to earnings (P/E) ratio of just 7.3 and although the outlook for the bank is highly uncertain, it is difficult to justify such a low P/E ratio at the present time. As such, it appears to be an excellent buy for the long run.

Also posting dismal share price performance of late has been software products and services provider Tribal Group (LSE: TRB). Its shares are down by 81% in the last year following a highly disappointing period of financial performance which has culminated in a rights issue and the company’s shares moving onto AIM.

Considerable upside

However, in recent weeks investor sentiment has picked up strongly and Tribal’s shares have risen by 38% since the turn of the year. Part of the reason for this could be the waiving of the testing of financial covenants for the 2015 financial year, or the recent appointment of a new CEO. But with Tribal forecast to increase its bottom line by 37% this year and its shares trading on a forward P/E ratio of just 5.1, they appear to offer considerable upside, but also a relatively high degree of risk. As such, they could be of interest to less risk averse investors for the long haul.

Meanwhile, the recent update from Amur Minerals (LSE: AMC) was positive and shows that the company is moving in the right direction. For example, it is taking delivery of various pieces of equipment so as to be able to double its drilling capacity at the potentially highly lucrative Kun Manie prospect. This should allow for the rapid expansion of the resource and generate the required information for the definitive feasibility study.

Better options elsewhere

While 2016 is set to be an exciting year for Amur after relatively slow progress in the last decade, there still appear to be better options available elsewhere in the resources space. That’s not because Amur lacks a quality asset or the potential to generate a significant amount of profitability, but rather it is because other sector peers offer high levels of profitability right now, as well as low valuations.

So, while less risk averse investors may wish to take a closer look at Amur, for most investors it may be prudent to look elsewhere.

The post 3 Stunning Buys Following Updates? Banco Santander SA, Amur Minerals Corporation And Tribal Group plc appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Major boost

Clearly, recent news regarding payment for oil exports by the Kurdish Regional Government (KRG) has been positive, with a handful of payments having been received in recent months. Furthermore, just this week the KRG announced plans to make regular payments, as well as gradually paying off its creditors over the medium term. As a result, Genel’s share price was given a major boost.

While this is encouraging, Genel continues to be owed £millions for past production and there is no guarantee that this will be received in the near future, due to the volatile nature of the political outlook in Northern Iraq/Kurdistan. Furthermore, Genel also recently reported that production in 2016 will fall significantly due to lower oil prices and, with the combination of geopolitical uncertainty, the prospect of a falling oil price and no guarantee regarding back payments, there appear to be better options elsewhere within the resources space.

Encouraging progress

Similarly, investing in Amur Minerals (LSE: AMUR) also lacks appeal based on the options available elsewhere within the mining sector. Although the company has a very bright long term future and its update from today highlights the progress which is being made, with a number of highly profitable mining stocks trading on low valuations, the risk/reward ratios elsewhere seem to be more enticing.

Of course, Amur Minerals has the potential to deliver strong share price gains over the medium term as it seeks to commence its drilling programme. Today’s update provides details on the equipment being delivered, the planned work programme for the site, and indicates that Amur making encouraging progress. However, it remains some distance off being a profitable business and given the uncertain outlook for the resources sector, more established sector peers could hold greater appeal.

Lacking appeal

Also releasing a positive update today is Imperial Innovations (LSE: IVO), with the investment company stating that it plans to raise £100m through a placing. The funds will be used to enhance its investment plans and to accelerate its growth rate and have been warmly welcomed by the company’s investors, with Imperial Innovations’ share price having risen by around 6% at the time of writing.

Despite this, the company continues to lack appeal. That’s at least partly because it is expected to record a fall in earnings of 65% in the current financial year and with it trading on a forward price to earnings (P/E) ratio of over 108, its valuation does not yet appear to reflect its expected decline in profitability.

The post 3 Stocks I’m Avoiding Despite Positive Updates: Amur Minerals Corporation, Genel Energy PLC And Imperial Innovations Group plc appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Shares in Gulf Keystone Petroleum (LSE: GKP) have continued to slide, losing 80% in the past 12 months to just 14p, despite the firm’s biggest hurdle looking as if it has been overcome. That’s been the problem of getting payment from the Kurdistan Regional Government for the oil it’s been handing over for international sales.

With a promised regular payment schedule taking months to turn into reality, the first gross payment of $15m finally happened in September 2015. Those payments have since continued, with the latest being announced on 6 January, taking the total so far to $60m.

The big problem is this income isn’t matching Gulf’s outgoings, and the cash available to it is dwindling. So Gulf is going to need a sharp rise in the price of oil, or some new fundraising, or perhaps even both if it’s to keep going.

North Sea

Xcite Energy (LSE: XEL) shares are also in a slump, with the price losing 64% since its peak last May, to 15p. Xcite is sitting on deposits estimated to be worth more than $2bn at its Bentley field in the North Sea, but the obvious big killer right now is the price of the stuff. Xcite has estimated a total lifecycle cost of round $35 a barrel, which is actually pretty efficient for North Sea oil that can be very expensive to extract – but with Brent Crude only fetching $34.50 as I write, that’s perhaps not looking so clever.

Xcite has enough cash for now, but it’s going to need some serious extra funding to turn its oily assets into commercial reality. And at the moment, investors aren’t exactly tripping over each other to fund such things.

Cheap nickel

Leaving oil alone, we come to Amur Minerals (LSE: AMC), a miner with substantial nickel, copper, and other metal assets in eastern Russia. The Amur share price spiked in June last year to 44.6p, but since then has plummeted 84% to just 7.2p today. There’s no profit yet, so what’s the story for investors?

Amur estimates its cost of nickel production as being very low, so the current slump in metals prices shouldn’t do the company too much harm in the long term and it should be in a position to prosper when a recovery finally happens. Cash doesn’t seem to be a problem right now with a £12.5m equity issue having been concluded only last month, which should seriously help the development of its Kun-Manie project.

But the big risk for me is political – Amur operates at the whim of the Russian government.

Can you stand the risk?

Any or all of these could come good, with Amur my favourite of the three, but it would need steelier nerves than mine to invest in the shares.

The post Are Gulf Keystone Petroleum Limited, Xcite Energy Limited And Amur Minerals Corporation The Small-Caps To Watch For 2016? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
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• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.