Swala Oil and Gas Tanzania, an oil exploring company, shares have dropped by 25 per cent as supply exceeded demand to push down prices during the last ten weeks.Tanzania Securities Ltd (TSL), stock brokerage firm, daily report shows that Swala opened the year at 700/- but nosedived to 525/-.
The TSL daily reports show that since the beginning of this year the downward spiral on Swala share price, is now heading to the listing price level of 500/-.
Swala, affiliated to Swala Energy of Australia, was listed at Dar es Salaam Stock Exchange's alternative market last August and immediately the share price went up over four times to 2,110/-.
According to TSL report, up to yesterday, Swala was the top loser so far in the first ten weeks of this year after its share crushed by 25 per cent, the immediately second loser was Mkombozi Bank at 16.67 per cent.
Orbit Securities General Manager Juventus Simon said the share price descending was the results of the bourse to have many shares on selling than on buying counter.
"Speculators are rushing to sell at reasonable price since they figured out price will continue to increase but things have dramatically changed," Mr Simon told 'Daily News'.
The Orbit GM said short term investors wanted to gain on the price change thus rushed to buy Swala but their predications were short lived.
"Speculators now want to sell out their shares at good price -- the trend if continued will see Swala share exchange hands at IPO price or below in near future," Mr Simon said.
However, the long term investors are still holding their share anticipating Swala will strike oil or gas in near future to turn their share into a 'blue-chip'.
In January Swala announced that it has successfully completed its 430km 2D seismic programme over the Kilombero Basin, which showed 'string of pearls'.
The geometry of this 'string of pearls' is a strongly analogous to that seen elsewhere in the East African Rift System, notably in the Lokichar Basin of Northern Kenya where a series of oil discoveries have already been made.
Swala's CEO Dr David Mestres Ridge, said when they were granted the licence, no hydrocarbon exploration activity had ever before been carried out over the area.
"We have broken new ground, proving three sedimentary basins and in the Kilombero basin, multiple structural leads and prospects in a young (Neogene) basin," Dr Ridge said.
Swala is an oil and gas exploration company that is actively exploring the East African Rift System.
Swala has a 50 per cent equity in, and is operator of, the Kilosa-Kilombero and Pangani licences, where it completed its first year work commitments some five months ahead of schedule.
Source: Daily News, reported from Dar es Salaam, Tanzania
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