Why Shares In Roxi Petroleum plc Rocketed

Speculative oil share Roxi Petroleum plc (LON: RXP) rises following oil discovery.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 9 July, 2014 10:28 am BST

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.

What: Shares of Roxi Petroleum (LSE: RXP) spiked this morning, rising as high as 10p and becoming a double-bagger for shareholders. The central Asia-focused oil and gas company has increased 75% year to date, but the share price has been highly volatile month to month.

So what: Roxi has detected oil at its flagship BNG asset located in the west of Kazakhstan. The chief executive, Clive Carver, commented:“We are naturally delighted with these early indications and look forward to quantifying what has been discovered in the coming days and weeks.” The first well has a planned total depth of 4,700 metres.

Now what: The group’s long-term strategy is to build a strong portfolio of productive assets, but there are a slew of risks facing prospective investors. The principal risk is that there is no guarantee that exploration activities will deliver oil, and while this isn’t necessarily dependent on pure chance, you should keep in mind that a sensible investment should never result in even a single sleepless night. Of course, the decision to ‘buy’ is entirely your own decision.