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MIDAS SHARE TIPS: Look for oil in Advance or turn green in Harmony

Climate change activists may be causing havoc across the country, but simple facts remain. The world depends on oil and gas and will almost certainly continue to do so for some time.

Boris Johnson has embarked on a green agenda, but demand for these hydrocarbons is continuing and expected to increase only in the next few years, as evidenced by recent soaring oil and gas prices. increase.

Advance Energy wants to take advantage of its global dependence on oil. Founded in February 2020, the project targets oil fields that have already been discovered but are currently underdeveloped or underfunded.

Simple fact: The world depends on oil and gas and will almost certainly continue to do so for some time

CEO Leslie Peterkin then uses his experience and industry contacts to maximize the potential of these assets and provide substantial compensation to shareholders. increase.

Peterkin, 67, spent 40 years in the oil industry, including 10 years at Shell, before holding senior positions at Australian majors Woodside and Santos. He also consults with an independent energy company, each time responsible for turning abandoned assets into valuable and productive oil fields.

Now he is determined to prove his spirit at Advance with the help of another oil veteran, Chairman Mark Rollins.

Their first project was Buffalo-10, formerly owned by commodity giant BHP, but has been fallow for over 15 years.

The Buffalo site, located between Australia and East Timor, has been producing oil for several years, but lacked the technology to maximize its potential.

Since then, technology has advanced significantly, and independent analysis suggests that up to 34 million barrels of oil are on the seabed of the Buffalo site. The drilling program will start next month and, if the analysis is correct, will be an Advance game changer.

Due to its high reliability, discussions are underway with lenders and contractors to produce the site by the end of 2023, about 30,000 barrels per day in the first year and 40,000 barrels thereafter. I’m out.

From the beginning, Peterkin felt that if Advance provided expertise, industry contacts and funding, and the other party adopted a joint venture approach that focused on day-to-day operations, the company would be best suited to provide shareholder compensation. I did. Australia-listed Carnarvon is a partner of Peterkin in Buffalo and the revenue is evenly distributed, but forecasters quickly recover the cost of Advance bringing the site to production and then very cash. I believe we can produce it.

Meanwhile, Peterkin is in preliminary talks on two more ventures that need to be added to the advanced roster to create long-term value. There is even talk of dividends in the next few years.

Midas Verdict: Investing in a pre-revenue energy business is by no means risk-free, but Peterkin’s experience opens the door to the entire industry and increases the chances of success by focusing on sites that have already been developed. Advance is also a very low cost business, and sector watchers believe Buffalo will be the winner. At 3.3p, the company is definitely worth a punt for adventurous oil lovers.

Suppliers: target Ticker: ADV contact: Advanceplc.com or 01624681250

… or invest in a green battery bounty

For investors with a more ecological mindset and those who want to hedge their bets in a climate-sensitive world, the Harmony Energy Income Trust may prove just that ticket.

Harmony specializes in battery storage plants, which can release electricity to the grid and send it to homes and businesses when they need it most.

Based in Knaresborough, North Yorkshire, the company plans to go public in early November and hopes to raise £ 230m.

The shares will go on sale this week for £ 1 per share and will be available through primary bids or intermediaries such as AJ Bell and Hargreaves Slansdown.

Harmony boss Paul Mason is looking to income seekers, targeting a dividend yield of 8% from 2023, paying quarterly and rising from 2% next year.

The group makes money by buying electricity from renewable energy sources overnight, usually when electricity is cheap on the wholesale market, and selling it mainly between 5 and 7 pm when it is most in demand. ..

Harmony can do this by storing energy in huge batteries strategically placed near distribution points in the area.

Battery storage has only been around for a few years in the UK, but harmony was there from the beginning, giving you access to great projects early on at attractive prices.

Therefore, Mason will use the levitation revenue to purchase six projects that can store 312.5 MW of electricity, which is sufficient to power 95,000 households annually.

Harmony reserves the exclusive right to acquire a site capable of storing an additional 687.5 MW of electricity over the next five years.

Having a long-standing relationship with Tesla, the US giant has agreed to bring a state-of-the-art battery system to Harmony’s first site portfolio.

Midas Verdict: The past few weeks have shown that when the wind doesn’t blow and the sun doesn’t shine, the entire UK power system buckles under tension. Battery storage makes the transition to renewable energy much more viable, and Harmony is an expert in this area. Dividend yield is also attractive. When stocks are put up for sale for £ 1, they are well worth a look.

Traded: Main markets Ticker: HEIT contact: harmonyenergy.co.uk or 01423799109

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MIDAS SHARE TIPS: Look for oil in Advance or turn green in Harmony

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