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Mineral, Oil & Gas companies averaged 6% gain in August

My Gateway (92 x 92) There are 17 resource stocks listed on Singapore Exchange (SGX) that operate Mineral, Oil & Gas (MOG) businesses. These 17 companies averaged a 6.0% price gain over the month of August, taking their average year-to-date gain to 52.7%. Excluding the positive outlier performance of Mirach Energy (SGX: C68), the MOG companies averaged a 19.2% year-to-date gain.

Over the month, seven of the 17 stocks gained, one was unchanged, and nine stocks declined in price.  The price performances of each of the companies in August and the 2013 year-to-date are detailed in the table below.

Mineral, Oil & Gas Companies SGX code Market Cap S$M August Price Change Pct  YTD Price change Pct
LIONGOLD CORP LT

A78

1,568

45.9

55.3

KRISENERGY LTD

SK3

1,203

-5.7

4.5

REX INTERNATIONAL*

5WH

728

31.9

49.0

MIRACH ENERGY LT

C68

457

60.7

590.1

GEO ENERGY

RE4

411

-5.3

-28.3

RH PETROGAS LTD

T13

305

2.1

-5.7

FALCON ENERGY GR

5FL

273

-1.5

39.6

RAMBA ENERGY LTD

R14

214

1.6

29.4

INTERRA RESOURCE

5GI

196

-7.4

8.6

ABTERRA LTD

L5I

161

-3.0

-12.2

MALAYSIA SMELTIN

NC9

113

-13.1

-11.4

LOYZ ENERGY LTD*

594

108

-6.1

-20.5

SAPPHIRE CORP LT

NF1

105

21.5

1.6

CNMC GOLDMINE*

5TP

102

-3.8

-9.1

CHINA MINING INT

Y34

97

3.7

167.7

MAGNUS ENERGY GR*

576

76

0.0

85.0

SINCAP GROUP LTD*

5UN

11

-19.7

-47.0

Source: Bloomberg (Data as of 30 August 2013), SGX My Gateway, Note * Catalist stock

The strongest MOG performance in August was generated by Mirach Energy which saw a 60.7% gain in the month take the YTD gain to 590.1%. Mirach Energy is an energy exploration and production company with oil and gas interests in Asia.

LionGold Corp (SGX:A78) was the second best performing MOG stock in August with a 45.9% gain. LionGold focuses on gold mining, mine development and exploration activities – the Group has acquired interests in gold exploration and mining companies in Australia, Canada, Ghana and Bolivia.

Rex International (SGX:5WH) was the third best performing MOG stock in August with a 31.9% gain. Rex International Holding is the most recent addition to the MOG group, and through its subsidiaries, is principally engaged in business of oil and gas exploration and production. Through co-operation with several partners, the group develops, manages and operates concessions located in the Middle East, Norway and the US, and applies its proprietary Rex Technologies in respect of its oil and gas exploration activities.

What are some of the key characteristics of MOG companies? 

The principal business of the MOG companies is the exploration or the extraction of minerals, oil or gas. In many cases, these MOG companies do not generate any initial revenues or profit. However, they do possess exploration & exploitation rights for a potentially profitable MOG discovery. A resource and reserve reporting standard is used to express the economic confidence in any particular mineral or oil & gas resource. Investors should be aware that MOG companies may undergo long periods of time without making economic realisation, and may return to the market for several rounds of fund raising for further project development. Hence, a key sector risk for a company whose principal activities consist of exploration for mineral, oil or gas, is that it may not progress to the next stage of development or to a stage where it is able to generate revenue.

For those MOG companies specifically involved in minerals exploration and extraction, they must have achieved at least some ‘Indicated Resources’ while companies involved in Oil & Gas must have achieved at least some ‘Contingent Resources’.

Minerals, Oil & Gas are one of three core segments of Resource Stocks. The other two types of resource stocks are commodity processors & traders as well as plantations.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.