UKOG share price collapsed sharply this week as concerns about the company continued. The stock collapsed to a low of 0.085p, which was about 35% below the highest level last Friday. This means that the company has a market cap of over 18 million pounds and is about 60% below the highest point this year.
Why did UKOG collapse?
UKOG is a small Russian oil and gas company that focuses on assets in the Weald Basin in South England. The company entered into an agreement with Aladdin Middle East to acquire a 50% interest in the license. In addition, the company’s UK Energy Storage signed an agreement to lease with Portland Port Limited.
UKOG share price has underperformed this year even as oil and gas prices remained at an elevated level. Natural gas prices have jumped by over 125% this year while oil has jumped by more than 30%. The most recent results showed that the company had an operating loss of over 1.29 million pounds compared to over 1.01 million pounds in the same period last year. Revenue rose to 910,000 pounds as the company slashed its operating cost.
UKOG stock price collapsed after the company announced new fundraising. The firm raised over 3.4 million pounds by issuing new shares. It will use these funds to boost its seismic program in Turkey. It also appointed a new Chief Financial Officer who has over 20 years in the industry.
UKOG share price forecast
The daily chart shows that the UK stock price has been under intense pressure in the past few months. It has crashed below the important support level at 0.0912p, which was the lowest level in February. At the same time, the stock has moved below the 25-day and 50-day moving averages. It has also formed an inverted cup and handle pattern.
Therefore, there is a likelihood that the UKOG share price will continue falling as sellers target the next key support at 0.070p. A move above the key resistance level at 0.10p will invalidate the bearish view.
