Companies: GOO   

It is almost two years since I tipped Gold Oil here – at 6.88p – and at last the shares are starting to repay our patience (I say ‘our’ with feeling, since I bought in some months back). In the past ten days they have jumped to 10p following news that the first drilling onshore Peru has encountered two structures bearing hydrocarbons at different depths. The higher is more likely to be gas than oil; the lower one is heavy oil. The two structures are now to be tested and results are expected towards the end of September.

Press reports have suggested Gold Oil may be sitting on 200 million barrels of oil equivalent. Valued at $5 a barrel in the ground, that would make the company worth $1 billion. It is currently capitalised at just $70 million, or £37 million. However, much hangs on the well tests now underway. The big question is whether the heavy oil in the lower reservoir can be made to flow. If not, Gold Oil’s shares may not make much more headway short-term. If it does flow, they could double, treble or more. For now, I’m holding and suggest you do too.

Gold Oil	AIM	£19.33m	4.00p	-0.08p
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Other company articles:
Exploration Insights by Robert Tyerman			03/11/2008
Reserve hope at Gold Oil			22/10/2008
Colombian deal for Gold Oil			09/07/2008
Gold Oil to get cash boost			26/10/2007
Gold Oil has success with first drilling			18/08/2006