Why Jupiter Energy’s Share Price Skyrocketed 519% Today (ASX:JPR)

Energy Ltd [ASX:JPR] is on quite a run today. The ASX-listed oil explorer and producer is up 509% from yesterday. After opening at $2.6 cents, the JPR share price is trading at $13 cents at time of writing.

Jupiter has full ownership of an oil exploration permit in the Mangistau Basin in Kazakhstan. The 123-squared metre block holds three oil fields: Akkar North, West Zhetybai and Akkar East.

What did Jupiter announce?

Jupiter said they’ve finished the approval process that allows Akkar East to start commercial production. Up until now, the oil field had been shut with production only taking place in Akker North and West Zhetybai.

All three fields have now started to produce oil with three wells in Akkar East operating through a ‘preparatory period’. According to the company, this period allows Jupiter to produce oil without having the required infrastructure. The only condition is that all excess gas produced has to be used in the field, for things like power or heating.

It’s the reason why Jupiter expects the wells will only operate at about 30% capacity. Any higher would mean production would be higher than what the field can make use of.

Jupiter is looking at infrastructure sharing options in the area and funding opportunities to develop the three oil fields.

But, the big question is, has the pandemic killed oil demand?

Oil prices have collapsed during the pandemic. It’s prompted companies like Royal Dutch Shell, Oil Search, Santos and BP to write-down their assets.

And speaking of BP, the British oil and gas multinational released their Energy Outlook 2020 yesterday. In the report they explore three different paths for global energy to 2050. All three predict oil consumption will decrease in the next 30 years from the levels we saw pre-pandemic.

As they noted:

[T]here is a decline in the share of ‎hydrocarbons (coal, oil and natural gas) in the global energy system in all three scenarios. This is ‎matched by a corresponding increase in the role of renewable energy as the world increasingly ‎electrifies. The scale of this shift varies significantly across the three scenarios, with the share of ‎hydrocarbons in primary energy declining from around 85% in 2018 to between 70-20% by 2050 ‎and the share of renewable energy increasing to between 20-60%.‎’

While Jupiter Energy may be clocking massive gains today, there’s a lot of concern about the future of oil out there and these are coming from the oil producers themselves.

It’s why we think there are better investments out there.

Check out editor Greg Canavan’s new report ‘Five Bounce-Back Stocks to Watch during the Market Crash’. In this free report, Greg gives you five stocks he believes will survive the pandemic.

You can access this free report here.


Selva Freigedo

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

The Rum Rebellion