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Here’s Why Advance Energy (ADV) Share Price Rallied 18.7% to New All-Time Highs

Simon Mugo trader
Updated 18 Oct 2021

Shares of Advance Energy PLC (LON: ADV) rallied 18.7% to new all-time highs after the open today, driven by positive investor sentiment following a favourable report by a leading British publication on Sunday.

According to a report in the Financial Mail on Sunday, Advance Energy is a pre-production oil company with excellent prospects as its works to develop its flagship property known as Buffalo-10, located between Australia and East Timor.

The oil exploration and mining company launched in February 2020 is headed by industry veteran Leslie Peterkin, the CEO, and Mark Rollins, another oil veteran who is the firm’s Chairman.

Peterkin has over 40 years of experience in the oil sector and previously held top leadership positions at Santos and Woodside, two Australian major oil producers. He has also worked as a senior consultant for major oil firms specialising in turning around neglected assets.

Advance Energy has partnered with Carnarvon, an Australian listed company, to develop the project, which is expected to reach production stages by the end of 2023, a speedy timetable.

Buffalo-10 is expected to produce 30,000 barrels of oil daily in the first year, after which production will rise to 40,000 barrels daily for the rest of its production lifespan. The site is estimated to contain 34 million barrels of oil.

The well is expected to be quite profitable given the low production costs associated with the site. However, I’m worried that by the time the well reaches production stages in 2023, a lot may have changed in the global energy landscape.

Many countries, including the UK, have accelerated the move away from oil as an energy source and towards clean fuels such as solar power, hydrogen energy, and wind energy.

Advance Energy may also be a bit late to the party associated with the current rally in crude oil prices driven by low global supplies, which could have peaked and stabilised in the next two years.

Traders looking for buying opportunities in Advance energy should wait for the recently broken 3.60 resistance level to be retested before jumping in. However, if the price can fall back to that level, the best entry opportunity lies at the 3.02 support level.

*This is not investment advice. Always do your due diligence before making investment decisions.

Advance Energy share price.

IG chart of Advance Energy share price 18-10-2021

Advance Energy shares surged 18.65% to trade at 3.88p, rising from Friday’s closing price of 3.27p.

Should you invest in Advance Energy shares?

Advance Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Omega shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading