Views from the Trading Floor - Featuring Tullow Oil, Borders and Southern, Tangiers Petroleum and Edenville Energy
Thursday, 19 April 2012 – proactiveinvestors.co.uk (Web)
Saints & Sinners: Oil & Gas
Tullow Oil (LON:TLW) were active during afternoon trading, pushing 2% higher to 1550p on decent volume after the company said that its Mercury-2 exploratory appraisal well in Sierra Leone and its Kosrou-1 exploration well in Cote d'Ivoire have both encountered water bearing reservoirs with oil shows. The Discoverer Spirit drillship drilled Mercury-2 to a final depth of 5,142 meters in water depths of 1,815 meters. Anadarko (55%) is operator of offshore Block SL-07B-11 along with partners Repsol (25%) and Tullow (20%). The Eirik Raude semi-submersible drilled Kosrou-1 to a final depth of 5,241 meters in water depths of 2,275 meters. On completion of operations the rig will return to the Paon-1 location to complete the drilling of that well. Anadarko (50%) is operator of offshore Block CI-105 along with partners Tullow (22%), Petroci (15%) and Thani (13%).
Borders & Southern (LON:BOR) jumped another 12% to 121p during afternoon trading on big volume once again. Chatter has been doing the rounds in the press that a crew change a few days ago on the Boarders rig, could be the driver behind the move. As with all speculation it must be taken with a large pinch of salt, but something has got the retail market chomping at the bit, and we will continue to watch this one tick for tick.
A few small profit takers showed up to the Falkland Oil & Gas (LON:FOGL) party today, knocking the stock from a high of 98p on the day, back down to a low of 85p on the day. The shares did settle around the 91p mark during lunch, as the market continued to speculate about what may or may not come from the Borders & Southern update.
Tangiers Petroleum (LON:TPET) slipped another 3% to 30p during early trading today, albeit on thin volume. This is a stock that really has got us scratching our heads. The shares surged from 33p to 46p over a period of 3 trading sessions after the company said back on the 30th of March it wishes to advise that the securities of the Company have been placed in a trading halt on the Australian Securities Exchange ("ASX") pending an announcement in relation to project results. It is expected that an announcement will be released prior to the commencement of trading on Tuesday, 3 April 2012 and that trading in its securities will then resume on the ASX. The Company's shares will continue to trade on AIM. Since then the shares have slipped all the way back down to 30p on news released on the 3rd of April that the company has received a competent persons report for the Milligans Fan oil play in its WA-442-P and NT/P81 permit areas, adding the report further confirms the excellent prospectivity of the region. Significant oil potential confirmed in 14 identified leads, 8 of which are structural traps with 6 being a combination structural/stratigraphic in nature. The report includes an assessment of the mean unrisked prospective resources individually contained within 14 identified leads, with crests ranging in depth from 2374 meters to 4450 meters. Estimates mean unrisked undiscovered oil in place to be 683 million barrels of oil with a mean prospective resource of 218 million barrels of oil. One for the watch list at the very least.
Wessex Exploration (LON:WSX) slipped to a low of 7p over the last few sessions, after Total walked away from a potential 10p a share offer for the company. Today the bulls had the upper hand again, pushing the stock 8% higher to 8.125p at the mid-price during lunchtime trading, on just over 4 times the average daily volume. Could someone else be in the wings ready to pounce? We will be watching the volumes and the newswires closely again here.
Exillon Energy (LON:EXI) jumped 6% during afternoon trading to 141p on decent volume. The shares have slipped from almost 300p at the start of the year to a recent low of 122p. Now the stock has started to move, could it be that a potential long standing seller has finally been finished? We will be watching to see if any holdings updates hit the newswires over the coming trading sessions.
Petro Matad (LON:MATD) slipped 7% to 22.5p during early trading today. Volumes have been slowly declining in the name over the last month or so, and the company have not given any operations updates since the 17th of November last year, in which the company did highlight the possibility of exploration drilling in 2012, subject to the results of the seismic studies and budget approval. Surely the market should be expecting some sort of update soon?
Mediterranean Oil & Gas (LON:MOG) jumped 15% to 5.6p during afternoon trading on decent volume. Looking through the most recent updates I can't find any potentially forthcoming news, so it will be interesting to see if anything hits the wires as the driver behind the run.
SacOil Holdings (LON:SAC) slipped another 11% to 3.875p on huge volume of near 45 million shares, that's roughly 20 times the average daily volume! When I see volume and prints of that size in a small illiquid stock, it does catch the eye and beg the question, who was behind the volume?
Saints & Sinners: Mining
Talvivaara Mining (LON:TALV) slipped 15% to 192p during trading on just over 5 times the average daily volume after the company said that it produced 3,374 tons of nickel in the first quarter of 2012, with output hit by downtime at the metals recovery plant, adding that its full year guidance is maintained at 25,000 to 30,000 tons, though it expects production to be closer to the lower end of the range. Recent analysis of ore samples taken from heap section 3 indicates nickel recoveries of up to 85% in less than two years of leaching, which exceeds expectations. Run-rate crushing and primary heap reclaiming performance has also improved. Progress in bioheapleaching and crushing puts Talvivaara in the position to offset the recent issues and to achieve the 2012 guidance and ramp up towards full capacity.
Punters favourite Edenville Energy (LON:EDL) jumped 18% to 0.3p at the mid-price on huge volume after the company said it is making preparations for the upcoming field season at the Mkomolo Basin on the Rukwa Coalfield Project in South Western Tanzania, and new site vehicles have been purchased. Camp is being up-graded and additional geological staff recruited in preparation for the 2012 work program. Focus of the 2012 drill campaign will be on the Rukwa Coalfield Project and the nearby properties of Namwele and Muze. Drill contractor is expected to mobilize during May as is the geophysical contractor. Company is fully funded to undertake the planned 2012 work program. It looks as though the management are trying to keep the news flowing which can only be a positive for holders of the stock who want to know what's going on.
Atlantic Coal (LON:ATC) pushed another 5% to 0.33p at the mid-price after the company announced yesterday that production from its Stockton Colliery in Pennsylvania for the first three months ended March 31 increased 12% compared to the same period last year. Production at Stockton for the first quarter increased 12% to 31,729 tons of clean coal during Q1 2012 compared to the equivalent period in 2011 (2011: 28,376 tons). During the period the Company removed 715,691 bank cubic yards ("BCY") of overburden (2011: 658,785); 85,911 tons of run of mine coal was washed (Q1 2011: 62,000). Demand for Stockton's high quality anthracite remains strong with production from Pennsylvanian anthracite mines struggling to meet demand; as a result there has been a substantial increase in the average sale price of Pennsylvanian anthracite with a 1Q average price of $166.30 per ton compared with a 1Q 2011 price of $134.25, an increase of 24%. Railroad diversion is now complete allowing the working of over approximately 1.0 million tons of coal of previously unworkable reserves, which will enable the Company to increase production at the mine over the coming months.
Oracle Coalfields (LON:ORCP) slipped 4% to 5.375p at the mid-price on just over 2 times the average daily volume. The shares seem to have been locked in a tight trading range over the last few weeks, with support sitting around the 5p level, and resistance at 5.75p.
Specialist Energy (LON:SEGR) slipped 13% to 25.5p after the company reported a 49% widened pretax loss for 2011, and said that it will restructure its U.K. manufacturing operations to deliver a more robust operation/flexible overhead in Luton and reliable supply chain through MBE Cologne. Total revenue for the year ended Dec. 31, 2011, GBP32.1 million (2010: GBP38.5 million). Total pretax loss GBP3.1 million (2010: loss GBP2.1 million). Diluted loss per share 12.93 pence (2010: EPS 12.25 pence). Order intake GBP31.6 million (2010: GBP30.1 million). Net debt at Dec. 31 GBP10.0 million (2010: GBP6.7 million). No dividend.
Noricum Gold (LON:NMG) jumped 25% to 2.375p at the mid-price after the company said it has acquired further gold exploration licenses adjacent to its Schonberg property as initial exploration and analysis has been very positive for high grade copper, as well as gold and silver. The company has acquired 33 further licenses covering 15 square kilometers to expand its exploration footprint. Historical copper mines within the Schonberg license area produced ore with average grades between 4.94% and 7.38% copper. Noricum said it plans to fast track exploration on this highly prospective project.
Creat Resources Holdings (LON:CRHL) moved 5.5% higher to 1.3p on almost 4 times the average daily volume by the end of lunch. The company recently said it is pleased to announce that ASX-listed Galaxy Resources Limited ("Galaxy"), in which CRHL has a major shareholding, has today announced that it has successfully raised A$30million (before costs) via a Placement ("Placement") to institutional and sophisticated investors which consists of the issue of 39 million new, fully paid shares. The Placement will support Galaxy's recently announced proposed merger ("Proposed Merger") with Lithium One Inc. (TSX-V: LI, "Lithium One"). Upon the completion of Placement, CRHL's shareholding in Galaxy will be diluted from 11.78% to 10.51%.
From the trading floor
The FTSE 100 moved 16 points better by the end of lunch to 5761 on volume of just over 600 million shares. The market did slip a touch after the US Existing Home Sales hit the wires at -2.6% versus an expected +0.5%. The FTSE AIM All-Share Index was 0.08% easier on volume of just over 1 billion shares.
Gold - Trading at $1646, up $5 (+0.27%)
Silver - Trading at $31.83, up 24c (+0.75%)
Copper - Trading at $8010, up $53 (+0.67%)
Zinc - Trading at $1984, up $4 (+0.11%)
WTI Crude - Trading at $102.15, down 56c (-0.55%)
Brent Crude - Trading at $118.57, up 60c (+0.51%)
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Original article published on: http://www.proactiveinvestors.co.uk/columns/fox-davies-capital/9065/views-from-the-trading-floor-featuring-tullow-oil-borders-and-southern-tangiers-petroleum-and-edenville-energy-9065.html