Gulf Keystone is in the tightest of tight corners. It is overloaded with debt, which is due to be repaid next year, and only a trickle of cash is coming in from the Kurds, who are struggling to fund a war against Islamic State and a migrant crisis. The latest monthly payment is overdue, and the company is locked in negotiations with debt holders about a financial restructuring.

A sudden influx of funds from the Kurds would be something of a miracle, while the situation in the region also seems to be putting off any potential bidder or cash rich partner coming to the rescue, with the company having said there is a “low likelihood of an asset transaction in the near future”.

By far the likeliest scenario is a financial restructuring involving a debt-for-equity swap and a rights issue for existing shareholders at the same price that debt converts to equity. It’s hard to see that price being much above 1p a share, so barring that miracle, the shares appear set to plummet rather than rocket.

Blinkx

Online video platform Blinkx (LSE: BLNX) posted revenue of $247m and a pre-tax profit of $18m for its financial year ended March 2014. However, partly as a result of advertisers’ increasing intolerance of fraudulent activity in the digital advertising supply chain, and partly as a results of an industry shift from desktop to mobile and programmatic trading, Blinkx’s revenues and profits have since crashed.

In its latest results, released last week, the company posted revenue of $167m and a pre-tax loss of $94m. However, much of the loss was down to a non-cash goodwill impairment charge on various past acquisitions, and there are signs that Blinkx might just have developed a viable business model out of the mess of the last few years.

The company’s new core business showed year-on-year revenue growth of 12%, while news today that it has signed up to gain a new “Certified Against Fraud” seal shows management’s confidence that the business is fit for purpose.

At a current share price of 21p, Blinkx has a market cap of £80m or so, which, with about £55m of cash on the balance sheet, values the operating business at £25m. However, with analysts forecasting continuing pre-tax losses for at least the next two years and the next financial statements (half-year) not out until the autumn, it’s hard to see the share price rocketing higher any time soon.

GTS Chemical

“Certification” was also the subject of the latest news release from London-listed Chinese chemical and oil producer GTS Chemical (LSE: GTS). The company says a certificate from the American Petroleum Institute “will add greatly to our marketing efforts”.

Not that GTS seems to need any additional help. In the face of the well-documented slowing growth in China, with notable weakness in the industrial sector, GTS said in a pre-close statement for the year ended December 2015 that its revenues have grown 32% year-on-year to ¥929m (almost £100m).

At a current share price of 53p, GTS is valued at £54m and trades on just 4.5 times the house broker’s forecast earnings. On the face of it, on this super-cheap rating, and with a pile of cash on the balance sheet, a dividend promised and full-year results due, GTS’s shares could be set to rocket higher.

However, AIM-listed China companies have had an appalling record in recent years as either poor businesses or outright fraudsm with revenue growth, balance sheet cash and early dividends all rapidly disappearing, and investors left holding worthless shares. Whether GTS will prove to be one of the exceptions to the rule remains to be seen, but the market is clearly pricing the business as a very high-risk proposition. A risk too far in my book.

The post Are shares of Gulf Keystone Petroleum Limited, Blinkx plc and GTS Chemical plc Hldg about to rocket? appeared first on The Twelfth Magpie.

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G A Chester 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.

A key reason for Blinkx’s larger loss last year was its restructuring. This included a number of one-off costs such as a goodwill impairment of over $50m, although Blinkx has been able to reduce its annualised operating costs by over $40m. And with it having a debt-free balance sheet and $78m in cash, Blinkx seems to be well-placed to move forward with its wholesale restructuring.

Looking ahead, Blinkx is confident of delivering profitability in the current financial year. If it’s able to do so then its share price is likely to rise significantly as investor sentiment will most probably improve dramatically. However, while the company’s strategy seems to be sound and core operations now account for over 70% of operations, it may be prudent to await evidence of profitability before piling-in.

Risky but rewarding?

Also rising significantly today are shares in Oxford BioMedica (LSE: OXB). They’re up by around 9%, with the gene and cell therapy group announcing details of the appointment of a sole corporate broker today. Of course, Oxford BioMedica’s shares have traded higher since the recent release of data from two clinical studies that demonstrated dose-dependent gene expression with the company’s LentiVector delivery platform.

Clearly, this is excellent news for the company and investor sentiment has been firmer since its release. And with the company’s results showing that it has a sound strategy in terms of broadening its partnerships and investing in its facilities and headcount, Oxford BioMedica could deliver improved share price performance following its 48% decline in the last year. However, with it expected to be lossmaking in each of the next two years and therefore requiring significant amounts of cash, there may be better options available elsewhere for risk-averse investors.

One to watch

Meanwhile, shares in Intelligent Energy (LSE: IEH) have slumped by around 7% after it announced that it has agreed the terms of a £30m gross fundraising through the issue of convertible loan notes. The full amount has been secured from the company’s largest shareholder Meditor, with Intelligent Energy permitted to seek additional qualifying investors to subscribe for up to a maximum of £15m of the convertible loan notes.

If Meditor’s convertible loan notes are converted then it will give the company a stake of between 58.9% and 72.2% in Intelligent Energy. As such, this will require shareholder approval since it would give rise to certain obligations under the takeover code.

With Intelligent Energy’s future relatively uncertain and investor sentiment being rather weak, there seem to be better risk/reward opportunities available elsewhere. Certainly, Intelligent Energy’s restructuring could improve the company’s long-term outlook, but for now it appears to be a stock to watch rather than buy.

The post Should you buy Blinkx plc, Oxford BioMedica plc and Intelligent Energy Holding plc after today’s updates? 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. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Profit warning

Shares in Crossrider (LSE: CROS) have fallen off a cliff on Tuesday following a terrifying trading update.

The firm — which designs advertising platforms for digital devices — has slumped 27% after warning that “structural changes… have negatively impacted on the outlook for future trading.”

Crossrider noted that “mobile revenue growth rates have declined significantly,” particularly from mobile subscription campaigns due to regulatory changes in some countries. And revenues from web app advertising “is significant and notably faster than previously expected,” the tech play added.

Crossrider now expects revenues and EBITDA to collapse 25% from 2015 levels, it advised.

City expectations for a 6% earnings rise have now been put to the sword, making a P/E ratio of 10.5 times look suddenly expensive. I reckon investors should give Crossrider short shrift given the massive shifts across its key markets.

Revving higher

Car dealership Lookers (LSE: LOOK) has suffered no such worries in Tuesday trade, the business recently dealing 8% higher following perky first-quarter numbers.

Lookers enjoyed “continued improvements in all areas of the business” during January-March, it advised, with gross profits from sales of new and used cars rising 23% from the corresponding 2015 period. On a like-for-like basis, new and second-hand vehicle demand rose 5% and 7%, respectively.

On top of this, Lookers also benefitted from bubbly aftermarket activity during the quarter. Gross profits here advanced 25% between January and March, or 7% on an underlying basis.

And the impact of a stable UK economy on car demand should keep sales at Lookers ticking skywards, in my opinion. New vehicle sales enjoyed their best April since 2003 last month, according to the Society of Motor Manufacturers and Traders.

The number crunchers expect earnings at Lookers to climb 7% in 2016, resulting in a P/E rating of just 8 times. I reckon this is a steal given the company’s terrific momentum.

Video player

Shares in tech play Blinkx (LSE: BLNX) have also bounced higher in Tuesday business, the company last dealing 19% higher on the day.

Blinkx — which generates revenues by allowing digital users to find videos more easily — saw pre-tax losses surge to $94.3m in the period to March 2016 from $24.8m a year earlier.

The company saw revenues slip to $166.7m from $215m in 2015 as the impact of non-core asset-shedding weighed. And a colossal $81m worth of one-off charges also contributed heavily to Blinkx’s pre-tax loss.

Blinkx is clearly making progress in transforming itself into a programmatic platform builder, the development of its RhythmOne product helping drive revenues here 68% higher in 2016.

But the company’s restructuring programme still has plenty to deliver before bumping the firm back into the black. Indeed, the City expects the firm to clock up further losses in fiscal 2017. Regardless of today’s handsome share price bump, I believe Blinkx remains a very high-risk selection.

The post Why are Crossrider plc, Lookers plc and Blinkx plc shaking wildly today? appeared first on The Twelfth Magpie.

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Where Boohoo has an advantage over a number of its online peers is with regards to customer loyalty. Boohoo sells its own line of clothing and while it may not have huge pricing potential due to it being at the mid-to-lower price level, it does command a degree of customer loyalty. This should mean that Boohoo’s sales performance is relatively robust and perhaps more consistent than peers that are sellers of branded goods. And with the UK and world economies offering upbeat long-term growth prospects, Boohoo could prove to be an excellent buy in the coming years.

Strategy progress

Similarly, AFC Energy (LSE: AFC) has considerable long-term potential. Although its share price has slumped by 33% since the turn of the year, it continues to make encouraging progress with its strategy. And with 2015 having been such a transformational year for the hydrogen fuel cell specialist, its recent share price fall could be a case of profit-taking from investors who are still sitting on gains of 48% since the start of 2015.

Looking ahead, AFC has considerable potential to deliver high levels of profitability in a world where cleaner energy is likely to be demanded in greater quantities. As such, the fact that it’s forecast to be lossmaking in each of the next two years may add to the company’s risk, but AFC also has the potential to deliver upbeat share price performance if news flow surrounding its eight 2016 milestones is positive.

This was the case in 2015 as the company derisked its proprietary fuel cell technology and while it remains a small and relatively high-risk stock, it could be of interest to less risk-averse investors.

Tough times

Meanwhile, online advertising specialist Blinkx (LSE: BLNX) continues to disappoint, with its shares being down 2% since the turn of the year. That’s despite the company making significant progress with its restructuring and efficiency measures, with it reporting that over $40m had been eliminated from its annual expenses in its most recent update.

In spite of this cost control, Blinkx remains lossmaking. Looking ahead, it’s expected to remain so in the current financial year and while its strategy seems to be sound and has included a successful rebranding, it may be wise for investors to await evidence of profitability before buying a slice of the business. After all, that’s what the market appears to be waiting for and without a black bottom line, Blinkx may struggle to ignite investor interest over the medium term.

The post 3 small-cap high flyers? Boohoo.Com plc, AFC Energy plc and Blinkx plc appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of AFC Energy. 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.

Could buying shares in cash-rich companies be a cure for investors fretting about debt? Today, I’m looking at three cash kings: FTSE 100 tech champion ARM (LSE: ARM), fast fashion etailer Boohoo (LSE: BOO) and online video platform Blinkx (LSE: BLNX).

ARM

ARM is simply one of the best businesses around. Ten years ago the company generated revenue of £232m, posted earnings per share (EPS) of 4.3p and had surplus cash on the balance sheet of £182m. Today, those numbers stand at £1,489m, 30.2p and £1,006m. Over the same period, the share price has risen from 132p to a current 950p.

Few companies have delivered a comparable record, and fewer still have done so without the leverage of debt. It’s rare indeed for such growth to come entirely from cash flows generated by the business itself. ARM has invested in the R&D necessary to deliver this growth, bought back its own shares to minimise dilution for existing shareholders, paid a dividend that has increased more than 10-fold, and still had cash left over at the end of each year to add to an ever-increasing kitty of ‘loose change’.

Ten years ago ARM was trading on a price-to-earnings (P/E) ratio of 30.7. Today, the P/E is marginally higher at 31.5. Can the company deliver the same kind of performance in the next 10 years as it delivered over the last 10? With expanding market opportunities for its technologies, including the Internet of Things, I wouldn’t bet against it. Indeed, I rate the shares a strong buy at current levels.

Boohoo

Boohoo is a relative newcomer to the stock market, having floated on AIM in March 2014. The company raised gross proceeds of £300m at 50p a share, but after repaying convertible loan notes was left with net proceeds of £46m to add to existing cash of £8m.

As a young, fast-growing business — revenue up 40% and EPS up 48% last year — Boohoo is making substantial investments in infrastructure and marketing. Annual results last week showed £13.6m of capital expenditure and £19.9m of marketing expenditure. Despite these substantial investments, Boohoo ended the year with a £4m increase in its cash balance to £58m. Again, we have a company funding impressive growth entirely from the cash flows of the business.

Boohoo was arguably overvalued at its flotation, but with the shares currently trading at 48p on a forward P/E of 33.5, the company looks a good buy to me, given the strength of its balance sheet and growth prospects.

Blinkx

Blinkx has an AIM-market listing and cash on the balance sheet in common with Boohoo, but there the similarities end. The following table shows the gross proceeds raised by Blinkx on its 2007 flotation and in subsequent share placings.

Blinkx has raised a total of almost £100m gross — call it £85m net — which at current exchange rates translates into around $125m. In a trading update earlier this month the company gave a cash balance for 31 March of $76m. In other words, all of the cash on Blinkx’s balance sheet has been provided by investors, rather than generated by the business. In fact, the company has consumed about $50m of investors’ cash since flotation.

The shares are currently trading below any previous placing price — at 17p — and I see Blinkx as a company to avoid, until it can demonstrate that its business is capable of generating cash sustainably.

The post Are cash kings ARM Holdings plc, Boohoo.com plc and Blinkx plc the cure for fretting about debt? appeared first on The Twelfth Magpie.

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

First gas from Kiliwani North, in which Solo has a 6.175% interest, is expected to ramp up to production of around 4,000 to 5,000 barrels of oil equivalent per day over the next 90 to 100 days. And that was enough to push the share price up 24% to 0.36p on the day.

Then today we hear of a 320m share issue, to raise £800,000 for Kiliwani development and take the firm’s interest to 8.425%, but which will dilute existing shareholders’ interests. The shares promptly gave up Wednesday’s gains and are now back at 0.28p. I’m sure the timing, straight after Wednesday’s good news, is purely coincidental, but it does illustrate why I wouldn’t touch a cash-burn investment like Solo. By the time it’s profitable, we’ve no idea how badly we’d have been diluted out of it by fresh cash-raising.

Running out of cash

The reason I’d dump Gulf Keystone Petroleum (LSE: GKP) is also simple — it’s at great risk of going bust. Although the firm’s Shaikan development in the Kurdistan region of Iraq is a world-class asset, Gulf Keystone is rapidly running out of money because it’s not been getting the cash from the regional government for all the oil it’s exported.

Sure, there’s a payment schedule in place now and Gulf is seeing some cash trickle in, but it seems like too little, too late to me. The big problem is that Gulf has debt repayments to meet of $250m in April 2017 and $325m in October 2017. And the company has come about as close as it can to admitting that it can’t continue for much longer without a serious injection of cash. It said it “continues to actively review options to secure new funding and restructure the Company’s balance sheet, to ensure it is able to continue as a going concern“.

The shares are down 83% in 12 months, to 6.4p, and down 98% since their 2012 peak, but I’m hearing echoes of Afren here, and I reckon there could easily be a further 100% to go.

Transformational?

Shares in video technologist Blinkx (LSE; BLNX) soared to around 230p in late 2014, but crashed back down when it became clear that the company had missed the massive switch to mobile computing and had to re-engineer its products to match. Today the shares trade at just 18.7p.

The latest dip came in response to Tuesday’s trading update, in which its chief executive S Brian Mukherjee described 2015-16 as “a transformational year for the industry and the company“. The trouble is, as my Foolish colleague G A Chester astutely pointed out, a year ago, the firm described 2014-15 as “a transformational year for both the online advertising sector and blinkx“.

Meanwhile, revenues are transforming into smaller sums, with $165m-$170m expected for this year, down from $215m last, and there’s an EBITDA loss of $10m-$11m on the cards. And the market is transforming into a more competitive one, with advertising prices falling and margins being squeezed. I can’t help feeling Blinkx has missed the boat.

The post Here’s Why I’d Sell Solo Oil PLC, Gulf Keystone Petroleum Limited & Blinkx Plc appeared first on The Twelfth Magpie.

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Still not convinced

A year ago, the company told us 2014/15 had been a transformational year for the online advertising industry and the company. Today, chief executive S. Brian Mukherjee told us 2015/16 has been … er, “a transformational year for the Industry and the Company”.

The 2014/15 transformational year saw Blinkx’s revenue fall 13% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) dive from $39.6m to just $3.5m. From today’s update we can see that the 2015/16 transformational year will see revenue fall around 22% with an EBITDA loss of $10-11m. Meanwhile, guidance of around $76m cash and equivalents on the year-end balance sheet represents a drop of $20m from 12 months ago.

Blinkx’s declining fortunes have coincided with online advertisers realising they were being somewhat ripped off for the money they were paying. Blinkx and its rivals have had to provide a better service at a lower price, as well as dealing with an industry shift from desktop to mobile and programmatic advertising.

Blinkx’s H1 revenue was down $17.6m on the previous six-month period, and I calculate that it has continued to hurtle lower in H2 by around $15.4m. Meanwhile, EBITDA remains in negative territory, with H2 looking like a loss of around $3.7m compared with $6.8m in H1.

Blinkx talks much of reduced operating expenses, re-branding and being “now well aligned with broader structural market trends”, but has still to convince me that it can become a sustainably profitable and cash-generative business.

Brighter prospects

Global distributor for engineers Electrocomponents (LSE: ECM) heads the FTSE 250 risers board, as I’m writing, with its shares up 8% at 261p, following a positive trading update.

Electrocomponents has seen revenue growth of 3% for its financial year ended 31 March, and said it anticipates that headline profit before tax “will be around the top end of market expectations”. The company added that it has so far delivered at least £6m of its targeted £25m annualised cost savings.

Electrocomponents prospects are looking brighter, but balanced against a weaker outlook for global economic growth, the shares, trading at perhaps 20 times earnings, appear to be fully valued.

Optimism

Shares of cancer drug discovery and development firm Sareum (LSE: SAR) have shot up by 67% to 1.18p after a mid-morning announcement by the company that a clinical trial application for one of its drugs has been approved by the UK’s regulatory agency. Subject to final NHS approval, two Phase I clinical trials are expected to begin in Q2 2016.

Last month, the company raised £1.1m in a placing at 0.7p a share, increasing the shares in issue to 2,645,223,988. At the current price of 1.18p, Sareum has a market capitalisation of £31.2m. This valuation suggests there is a good deal of optimism about Sareum’s prospects, given the early stage of things, with today’s drug being the first from the company’s development pipeline to enter clinical trials.

You really need specialist knowledge to assess small biotech companies, and even then it’s more art than science (ironically!) I don’t have the requisite knowledge, and if I were desperate for exposure to this area of the market, I think I’d be looking for a specialist fund to invest in rather than chancing my arm with individual stocks.

The post Should You Buy Blinkx Plc, Electrocomponents plc And Sareum Holdings Plc On Today’s News? appeared first on The Twelfth Magpie.

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• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

G A Chester 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.

Of course, British American Tobacco benefits from stable demand for its products. However, it also offers significant growth potential from the development of e-cigarettes, which continue to prove increasingly popular. Alongside improvements in pricing, this should help to offset the volume declines that are taking place across the tobacco industry and boost the company’s bottom line through earnings growth of 9% this year and 8% next year.

Although British American Tobacco trades at a premium to the wider index, with its shares having a price-to-earnings (P/E) ratio of 17.7 versus around 13 for the FTSE 100, they offer tremendous upward rerating potential. That’s because they offer a mix of stability and growth prospects, which should allow the company to beat the FTSE 100 over the long run in any market conditions.

Wait and see

Also outperforming the wider index year-to-date is Rolls-Royce (LSE: RR). Its shares are up by 19% versus a 2% decline for the wider index and while the company’s long-term prospects may be bright, its near-term performance could disappoint. That’s because Rolls-Royce is forecast to record a fall in earnings of 56% in the current year and this has the potential to hurt investor sentiment in the coming months.

While Rolls-Royce is likely to turn its performance around at least partly because of the capabilities of its new management team, it could prove to be a slower than expected process. After all, its bottom line is coming under severe pressure and even though earnings are expected to rise by 31% next year, it may be prudent to await evidence of the delivery of improved financial performance before buying a slice of it. That’s especially the case since it trades on a P/E ratio of 26.7 at the present time.

Bid target?

Meanwhile, online advertising specialist Blinkx (LSE: BLNX) has also outperformed the wider market in 2016, with its shares rising by an impressive 23%. The main reason for this was a better than expected set of third quarter results, with Blinkx making encouraging progress on its cost reduction measures as well as delivering improved performance in its core product lines.

Looking ahead, Blinkx could continue to beat the FTSE 100 if it’s able to continue to deliver on its strategy. The prospects for this appear to be reasonable and with Blinkx rumoured to be a potential bid target, this could also help to support its share price moving forward. However, with the company expected to remain in a lossmaking position in each of the next two years, there may be better options available elsewhere – especially with the stock market trading at such an appealing level.

The post Will British American Tobacco plc, Rolls-Royce Holding PLC And Blinkx Plc Keep Beating The FTSE 100? appeared first on The Twelfth Magpie.

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As a result, Hargreaves Services will reduce its exposure to the thermal coal market over the next couple of years, which it believes will generate improved cash flow from the unwinding of stock and plant positions. It will also continue to restructure and believes that while the short term will be challenging, the business has a relatively bright long-term future.

With Hargreaves Services expected to remain profitable during the short-to-medium term, its sustainability as a business doesn’t appear to be in doubt. However, with major changes afoot, declining profitability and reduced dividends, there may be better options in which to invest elsewhere.

Struggles ahead

Also struggling in recent months has been mobile payment solutions provider Monitise (LSE: MONI). It continues to struggle to turn a profit and this puts it in a much riskier position than Hargreaves Services. For example, it’s forecast to post a pre-tax loss of £27m in the current year and while this would represent an improvement on last year’s performance, it still leaves the company’s financial standing under increasing pressure.

Looking ahead, Monitise appears to be some way off generating a black bottom line. Although its product and idea is sound and has proved to be popular among major blue-chip customers, the investment community seems to be losing patience with the company’s profit outlook. This is evidenced by Monitise’s share price fall of 91% in the last year. Although it’s likely to still exist in a year, it seems prudent to avoid buying Monitise until it’s in an improved position regarding profitability.

Ch-ch-ch-changes

Meanwhile, online advertising company Blinkx (LSE: BLNX) is also struggling to turn a red bottom line into a black one as it transforms itself. Its recent update showed that losses in the first six months rose to $79m from $11m in the comparable period from the previous year. However, this included a $60m non-cash exceptional charge for exiting certain non-core businesses which, alongside a $1m restructuring programme, are gradually changing Blinkx’s business model and focus.

While the company has considerable potential to deliver improved financial performance, it appears to be a stock to watch rather than buy at the present time. Owing to its relatively large cash pile and sound balance sheet, Blinkx is very likely to still exist in one year. However until it’s profitable, investor sentiment may remain weak and cause its share price to come under further pressure following its 30% fall in the last year.

The post Will Hargreaves Services plc, Monitise Plc And Blinkx Plc Still Exist In 1 Year? appeared first on The Twelfth Magpie.

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

This is clearly impressive news since Blinkx has struggled to adapt to an increasingly mobile-focused industry in recent years. However, its acquisition strategy coupled with the rebranding of its offering appears to be moving it in the right direction. Importantly, the market now seems to have shifted its stance on Blinkx, with its cost-cutting measures and improved sales from core products having the potential to turn the business around.

Despite this, Blinkx remains a company with a challenging near-term outlook. For example, it’s expected to post a pre-tax loss of £15m this year, followed by a pre-tax loss of £8m next year. And while its third quarter result was impressive, it may be prudent to await evidence of improved performance over a longer period of time before buying shares in the business.

Tough road ahead

Similarly, today’s update from Petroceltic (LSE: PCI) also indicates that now may not be an opportune moment to buy a slice of the oil and gas exploration and production company. Certainly, it’s positive in the sense that the company has received a further waiver of repayments under its Senior Bank Facility extending to 29 January. Furthermore, the company’s lenders have also indicated their willingness to consider further waivers that may be required to continue the strategic review process that was announced on 23 December.

However, it indicates just how challenging the company’s outlook is and with the price of oil seeming likely to remain under a degree of pressure moving forward, Petroceltic’s near-term prospects appear to be rather downbeat. Further losses are forecast for the current year and with a number of other oil-focused stocks remaining profitable, there appear to be better risk/reward opportunities elsewhere.

Sweet Sugarloaf deal

Meanwhile, shares in onshore oil and gas producer Empyrean Energy (LSE: EME) have soared by as much as 68% today after it announced the proposed disposal of its right, title and interest in the Sugarloaf AMI project for $61.5m in cash. Empyrean may also receive a further $10m based on future oil prices and, with irrevocable undertakings from over 23% of its shareholders having been received, the prospects for the deal going through appear to be encouraging.

Proceeds from the sale would be used to pay US tax liabilities, repay the Macquarie facility and to further the company’s strategic goals. Additionally, Empyrean has stated that it will consider the most efficient manner in which to return surplus funds to its investors.

Empyrean’s CEO stated that in the current low oil price environment it would incur either an unacceptable cost or unacceptable dilution when compared with the transaction in order to further develop the Sugarloaf asset. So the sale appears to be a prudent move for the business. And with Empyrean remaining a profitable business that still trades on a price-to-earnings (P/E) ratio of  13.8, for less risk-averse investors it could prove to be of interest.

The post Are Petroceltic International PLC, Blinkx Plc And Empyrean Energy Plc 3 Top Turnaround Stocks? 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. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.