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54.5¢ slater & gordon limited

Frabjous Friday : 50 not out !, page-75

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Nick Miller

1,276 Posts.

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24/08/16

00:43

Post #: 18626505
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Originally posted by walkingeagle ↑

"Care to share any of your oil investment names??".............

on two conditions:
1 You don't take anything I say as any form of investment advice and
2 You don't laugh

I hold shares in 5 different oil companies, only 3 of which could confidently be said to have enough cash to see them through the present crisis. My holdings in these 3 companies are smaller in aggregate than he investments I have in either of the other 2 much more speculative plays, in which I have 'averaged' down to what I optimistically regard as 'achievable' levels - ie an investment cost that would allow me to make worthwhile gains should fortunes change. 'Averaging down' is contrary to advice one would get from more sensible investors than I will ever be; I enjoy risk if I understand it and am philosophical about individual failures on the basis "you can't win them all". his is irresponsible but I don't care. Many would call my strategy 'throwing good money after bad' but if the fundamentals haven't changed I tend not to agree. This has sometimes been to my cost.

Anyway, of the two large (in my terms) investments I have I much prefer Jersey Oil & Gas (JOG) to Xcite Energy (XEL). These two companies are at fundamentally different stages of their lives. It is quite likely Xcite Energy's management has failed to monetise what would have been an achievable project in other hands (I don't believe the fall in oil prices is the main reason for failure; there was always a deal to be done at a price) so I face the real prospect of losing a great deal in most people's terms.

JOG is really what I regard as a very competent and ambitious management team reversed into a failed oil company formerly called Trapoil. They got £25m of losses and a listing, have funds available for the right acquired interests and are actively looking at North Sea interests others are disposing of. There's a sporting chance of a good outcome. I am in close touch by virtue of the size of my holding and am hoping the first of a few acquisitions of producing interests isn't too far off. The company has sufficient cash to see it through to mid 2017. It's high risk but potentially high reward. The whole company has a market cap of less than £2.5m when one of Trapoil's inherited interests alone (Cortina) is worth multiples of this if a farm out can be fixed. A sustained recovery in oil prices is required first.

I am bored with my other holdings which are longer term and should eventually pay off well. They're in OPHR, RKH & BVLN - I'm not too far out of the money on any of them. Wish the same was true of XEL. I'm ok about JOG - I like the CEO (Andrew Benitz) who has ability, a good background and is a realist. The directors aren't taking out much and have a fair amount of their own money invested.

Hope the above is of some interest.

I'm also ok about my holding in SGH where I was a bit quick off the mark to invest in around Oct last year. My average is about 78c - still out of the money but it shouldn't matter much in the end. When did firms of solicitors ever make less than 20% net pa?

Famous last words. GL.

I once owned a black T shirt with big white letters on the front that said: "Ignore me, I'm pissed". I don't drink these days but the basic message might still not be misplaced. It's all in the future and my crystal ball is no better than anyone else's in this regard. In a more short term context I must now turn my attention to the card at York, where today is the final day of the Ebor meeting involving equine friends. I am hopeful of a decent return on my weekly £2 'lucky 15' (which usually isn't) and £10ew accumulator just so I don't get upset if one day my four picks all come in. I'd only use the money to buy more SGH (and maybe a few more JOG).

I'm now going to ground for 10 days. See you on the other side.

Expand

Thanks for this, I'll check them out. I noticed JOG trades in London and at this stage I only have an Australian shares trading a/c. I shouldn't let that limit me however...

In the spirit of sharing names of conviction, I also currently hold Anatara Lifesciences (ANR), Structured Monitoring Systems (SMN) and OBJ (OBJ). All very interesting companies that if you enjoy and can understand the risk should prove fruitful in the long run.

Happy to share more details on those to whoever is interested

SGH Price at posting: 57.5¢ Sentiment: Buy Disclosure: Held
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