Upland Resources (LON: UPL) shares are up 340% on the month and 21% on the day. Clearly UPL shares are undergoing a revaluation. The task we have, therefore, as investors is to try and work out why they’re rising so strongly - then try to work out whether they’re going to continue doing so.
We start from the position that of course Upland is a tiddler. Even at this elevated price the market capitalisation is under £20 million. That means that it only takes a small change in opinion and trading flow to substantially change that market capitalisation and share price. This operates both ways of course - on the way up and also, if it comes to pass, on the way down. Simply by being a small company there’s risk inherent in trading the shares.
On the other hand the news is good: “Upland Resources Limited (LSE: UPL) is pleased to announce significant progress in the development of Block SK334 in Sarawak. The Company, together with its joint venture partner in Sarawak, Big Oil Ventures sdn bhd (together "Upland Big Oil" or "UBO") are now in the formal process of assessing an onshore rig capable of developing Block SK334 in Sarawak.” Well, OK, not terribly exciting but that is at least an advance.
Upland Resources share price from Google Finance
There have also been further management share purchases. That’s something we do take as being a positive sign.
Of course, the management cannot actually know anything specific which means that the shares are worth more. If they did then that would be insider information - or something that has to be revealed to the market. So their purchases must be as a result of a general good feeling - so perhaps we should share that?
There is always a downside to these things as well. Which is that the news is about evaluating a rig to go drilling with. It’s not the announcement that they’ve used a rig and thereby found economic quantities of hydrocarbons. So everything at this stage is still “hope value” rather than anything substantial. Thus, if playing in Upland be wary and play only with complete risk capital.