Roxi Petroleum (LSE: RXP) — the Central Asian oil and gas company which focuses on Kazakhstan — this morning announced that it has issued 1,000,000 new shares following the exercise of options. The new shares should be admitted to trading on AIM on 7 August.
Roxi’s share price is up 6.4% so far today, but still remains close to 30% down on its high of late July. Shareholders remain impatient for further news, following the company’s announcement on 9 July that it had found oil and gas at the deep well A5 in the BNG contract area in Kazakhstan.
News of the find saw Roxi’s share price climb over 300% from a close of 3.8p on 8 July to reach a peak of 15.91p per share during trading on 22 July. The huge rise came after period of three years or so that saw Roxi’s share price sea-sawing below a 5p ceiling.
However, a so-called “operational update” issued on 23 July contained nothing substantive about the discovery, only really saying that Roxi was still waiting for the arrival of more heavy drilling fluids, which are needed in order to take core samples for analysis. Following the no-news update, Roxi’s share price had steadily tailed off, dipping as low as 10.35p, before today’s slight recovery.
Anyone who bought Roxi shares in the past few years will currently be sitting on a handsome gain. But prospective buyers need to be well aware that oil and gas exploration is a business fraught with risk, with no guarantee that a ‘find’ will translate into a productive well (most don’t).
