It would appear that as we finish 2016 there is a battle raging between Sound Energy (LON:SOU) and Hurricane Energy (LON:HUR) for the oil & gas minnow of the year. Interestingly enough, it may be that Hurricane wins the “punters” prize after the latest announcement.
Is it not ironic that the small-cap companies who tend to take a rather downbeat perspective on their prospects and assets tend to be the most “lucky” in the share price stakes? Conversely, those who promise the earth tend to let the investment community down.
In the case of Hurricane Energy, it could of course have been the case that there was rather less at the Lincoln discovery than we were led to believe. But as this company and its management are very good at managing expectations, we have been treated to a gap to the upside for the shares.
One almost gets the feeling that those who are the most downbeat generate the greatest amount of luck. Indeed, even the latest language from CEO Robert Trice underlines how the investor relations here are top notch in terms of alluding to the previous 250m recoverable barrels being conservative. It all smacks of the best of Great British understatement.
As far as the charting position is concerned, it can be seen how there has been a rising trend channel in place on the daily chart since May. The floor of the channel currently runs level with the 50 day moving average at 39p.
The message at the moment is that provided there is no weekly close back below the 50 day line, one would be looking to a “minimum” 60p plus target on the stock over the next 1-2 months. This is still shy of the 72p that finnCap are looking for – but of course, they are in tune with the full fundamental picture.