Junior energy stocks are back in the spotlight

The Australian Securities Exchange this week sent out a raft of price queries after a large number of hitherto languishing penny energy stocks sprung to life, with some recording three figure percentage gains.

Others, slightly further up the food chain and with advanced projects, were also caught by the incoming market tide.

The moves may, in some cases, have reflected Prime Minister Scott Morrison’s release of a plan to boost gas production and supply within Australia.

Thus companies like Blue Energy (ASX: BLU) — which has gas projects in three basins specified by Mr Morrison as being on the development list — and BPH Energy (ASX: BPH) with its stake in a potentially huge gas resource off the NSW coast were both obvious beneficiaries of the prime minister’s plan.

But others are more of a puzzle, and perhaps suggest that the speculative fever that has been frothing through gold and other metals is spreading into oil and gas — and even coal.

Did the prime minister’s remarks this week spark an interest in any stock with the word “energy” in its title?

But did this spark also set off a blaze of short-lived speculation with the last buyer to be left holding the bag when the music stopped?

Stocks prices boiled

Wednesday 16 September was a day of frantic action among the junior energy stocks on the ASX.

One of the most spectacular performances came from Sagalio Resources (ASX: SAN), which saw its share price rise by 100% on Tuesday 15 September, and then by another 975% the following day — trading being halted when the stock was suspended, as it remains at the time of writing.

Its June quarterly report shows Sagalio produced and transported 664 tonnes of oil in Kyrgyzstan over the three months, but during the quarter suspended the sale of oil due to the decline in prices and demand due to the COVID-19 pandemic.

The company said it would gradually resume sales, but there has as yet not been an update released to the ASX.

Some rises came with news

Meanwhile, wasn’t coal meant to be on the way out?

That did not stop the punters piling into East Energy Resources (ASX: EER) on Wednesday, pushing its share price up 1,100% in a single session to close at $0.036, against the previous close at $0.003.

However, and while many of the those queried said they knew of no explanation of the big gains in their share prices, this company did have something to add to its story.

East Energy the next day called for voluntary suspension and told the ASX that it was in discussions for a possible recapitalisation of the company.

The company is focused on coal exploration in the Eromanga Basin in Queensland with permits that host a total JORC resource estimate of 3.44 billion tonnes of thermal coal.

Foreign oil stories also attracted investors

Another instance where you can your finger on the reason is the case of Kazakhstan oil producer Jupiter Energy (ASX: JPR) which reported on Tuesday it had received all necessary approvals for its Akkar East oilfield to move to commercial status with three new wells already producing, sending its stock up 519% on the day.

Until now, oil production has been limited to two earlier wells while the company awaited the all clear from the Kazakhstan government for this latest expansion.

Suddenly, too, Louisiana’s oil became of interest to investors.

Grand Gulf Energy (ASX: GGE), which produces Louisiana Light, saw its share price jump 240% on Wednesday on no news, and called for a pause in trading.

Tamaska Oil and Gas (ASX: TMK) watched as its share price received a 40% leg-up on Wednesday, a week after it had decided not to proceed with a farm-in to a Romanian oil project.

Meanwhile, Gas2Grid (ASX: GGX) and its oil hopes in the Philippines, Triple Energy (ASX: TNP) which is trying to progress its oil interests in China, and Pilot Energy (ASX: PGY) — oil and gas in Western Australia — also saw investors taking interest, although in Pilot’s case it gave back most of its gains the next day.