SMALL CAP MOVERS: Baron Oil plunges; Accrol surges

There was a lot riding on Baron Oil’s competent person’s report (CPR) published on Tuesday, and by most accounts, the independent assessment of the AIM-listed oil and gas exploration group’s Chuditch asset in Timor-Leste was a good one.

Baron’s technical director Jon Ford called the CPR, which is basically a third-party view of the project and its scope, a ‘major milestone’ while highlighting that it confirms the ‘potential commercial viability of the asset’.

The report detailed a 1.1 trillion cubic feet of gas resource – a very sizeable discovery for any company the size of Baron (which has a market worth of about £32million). Such promising news surely must’ve sent shares rocketing, right?

Quite the opposite in fact. This week Baron Oil shares are down 22 per cent following an immediate 17.5 per cent drop on Tuesday.

Perhaps it may’ve been simple profit-taking. Baron chief executive Andy Yeo himself noted the ‘good run’ Baron’s had of late. Indeed, a zoomed-out view of the share chart sees Baron up nearly 140 per cent year on year.

Alternatively, perhaps investors have rebased their expectations, given that prospective resources appear to be lower than previously indicated. According to the company this is a result of incomplete survey coverage.

Analysts at house broker Allenby Capital appear less than worried. In fact, its analysts raised its project valuation by 52 per cent, noting that ‘contingent resource for the Chuditch-1 discovery constitutes a major element of de-risking and underpins the potential of the asset’.

One caveat acknowledged by the broker is that the need for funding ahead of a mid-June ‘drill or drop’ decision remained a near-term risk.

Longboat Energy took a nosedive too as investors reacted to news that a proposed appraisal well at the Egyptian Vulture light oil discovery will not presently proceed – as joint venture partners failed to trigger an extension to the Norwegian project’s licence and it was relinquished.

Longboat said it wants to pick up the project again through a 2024 licensing round. It sent the stock some 20 per cent lower on Friday to 11.57p on Friday morning.

Sticking to small-cap oilers Angus Energy saw some stronger share price action, thanks to a milestone in its onshore UK project. The shares shot up 13 per cent to 1.59p on Thursday, following the successful completion of the Saltfleetby Field.

Angus Energy has also entered into a £3million funding agreement with Aleph Commodities to build out Saltfteelby operations. Meanwhile, non-executive director Richard Herbert, who was previously head of exploration at BP, has now taken the helm as chief executive officer.

At 1.56p, Angus shares had moved back slightly to 1.56p by Friday.

Elsewhere, dual-listed Artemis Resources saw its UK shares take an 11 per cent tumble Tuesday after pricing in a new A$2.55million (£1.45million) capital raise.

Artemis has had a rocky start to the year, having suspended trading in Australia at the end of February to undergo this capital-raising exercise. Now it will use the funds to support exploration work and for ‘general working capital’ whilst its board completes a technical and corporate strategic review.

Conroy Gold & Natural Resources closed the week in high spirits with the share climbing 11 per cent, to 20.2p, boosted by the explorer’s new gold discovery in County Monaghan, Ireland.

Company chair Richard Conroy described the latest positive result as ‘a further step forward’ in what he sees as a ‘very extensive new gold district’.

Shifting gears into a totally different sector, kitchen towels are a fascinating subject, right?

Well perhaps not, but Accrol Group’s deal with British multination Unilever to exclusively produce and sell a kitchen towel product under the Lifebuoy brand certainty got the attention of investors.

Accrol’s shares advanced 6 per cent higher to 33.38p by the end of the week.

Across the broader market small-cap stocks drifted higher. The AIM All-Shares Index rose 1.19 per cent to 863.59 over the week, slightly outperforming the FTSE All-Share Index’s 1.04 per cent gain.