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Views from the Trading Floor Tuesday 24th January
Saints & Sinners
Oil & Gas
Nautical Petroleum (LON:NPE) has made a significant move since the turn of the year, pushing from around 250p up to its current levels of around 340p (+36% in 2012). Today the company jumped another 6% after they announced it had agreed with EnQuest PLC (EnQuest) to divest a 25% interest in United Kingdom Petroleum Production Licence P1077, North Sea Blocks 9/2b & 9/2c, which contain the Kraken discovery. In consideration for the transaction Nautical will receive a carry on its future expenditure on the Kraken field of up to $240 million, consisting of a $150 million firm carry and a contingent carry of up to $90 million. Nautical look to have major resistance at 350p, a break of that could see 400p as the next significant area of resistance.
Desire Petroleum (LON:DES) has been getting a lot of interest over the last week or so, since the press speculation that the region could be in play. Desire has always been a very volatile stock, but has recently struggled to get out of its trading range of 19p to 23p. The last few days have seen a decent surge in volume, and the price has started to break a number of resistance levels. For the chartists among us, we can all see the big gap to fill up to 36p, but one thing is for sure, the Anadarko talk has really got the sector rocking again.
Caza Oil & Gas (LON:CAZA) ticked a little easier today, dropping 5% to 10p in trading. Volume on the stock has been steadily increasing over the last few sessions, as investors get ready for a potential update. One of the previous announcements said “Caza has five additional proven undeveloped locations to drill on the San Jacinto property. The next two wells on this property were planned for the fourth quarter of 2011, however, the scheduling of these wells may be subject to change in the context of a more comprehensive drill plan for 2012.” The question here is, when will they give the update on these two wells in San Jacinto?
The Leed Petroleum (LONLDP) rollercoaster continued again today, with the stock trading 15% easier to 0.43p. The stock has been on very impressive run of late, moving from 0.1p to 0.7p over the last few weeks of trading, and the bulk of that move over the last week! The volumes have been huge, with over a billion shares changing hands each day. The ride came to a shuddering stop today, when the market read the RNS from 6:06pm last night, stating that Viridas (LON:VIR) which is an investing company, had sold 592 million shares at an average price of 0.48p. The company said “Viridas decided to sell the majority of its holding in order to make funds available for other investment opportunities.” Where ever this one lands, it has enjoyed on hell of a ride.
Yesterday Roxi Petroleum (LON:RXP) gave an update from NW Konys in Kazakhstan, that highlighted it had begun pilot production from the NW Konys field in the Galaz Contract Area, in the Kyzylorda Oblast Western Kazakhstan. The company successfully drilled six new wells on the NW Konys field in 2008/9 and re-entered one old well drilled in the 1990s. The wells were tested and shut-in pending application and receipt of final regulatory approvals, which were received in December 2011. Well NK-6 re-commenced production from NW Konys on Jan. 19, achieving a rate of approximately 225 barrels of oil per day, the oil is a saturated, low sulphur crude, with wax content varying between 12% and 29%. Resistance looks to be arounf the 5.5p level, which is where the stock is sitting as I type. It will be interesting to see if it can break this major resistance over the coming sessions.
Solo Oil (LON:SOLO) Slipped 10% easier to 0.72p today, after the company issued an operations update on its activities in Canada. The statement said “that significant progress has been made on a number of field activities associated with the on-going development of the Ausable Field Gas Recycling and Enhanced Oil Recovery ("EOR") project. The recently spudded North Airport #1 exploration well, being drilled using a cable drilling rig, is currently drilling ahead towards intermediate casing below a surface casing which was set at 51 metres. The well is expected to reach intermediate casing point by mid-February and to reach TD at 608 metres by early March.” So I guess the market will be ready and waiting for the potential mid-February update. The shares have been running nicely over the last few sessions, as punters get ready for a potential update on the company’s operations in Tanzania with its partner Amine x (LON:AEX).
Haike Chemical (LON:HAIK) the petrochemical and speciality chemical company, slipped 5% to 44p, despite the CEO Zhang Zaizhong buying 15,000 shares at 38p a pop. The shares have had a decent run over the last few trading sessions, moving from 36p to 48p, but they are still a long way off of the 90p highs of July last year.
After the significant rise yesterday, it was no surprise to see Leni Gas (LON:LGO) slip 10% on a little profit taking today. The shares were 0.09p easier by the end of lunch as punters took some profit off the table after the near 50% rally yesterday. Holders are waiting for an update on the Ocean Columbia rig arrival on site, that was scheduled to be on site early January. We will continued to monitor this one closely.
One for the watch list is Bahamas Petroleum (LON:BPC). The bulletin boards have been full of speculation over the last few months, and I will leave you to read them at your own leisure. The one thing that has caught my eye is the large increase in volumes over the last few sessions. The last RNS on the 16th of January, the CEO Simon Potter, stated "We are very pleased with the quality of the CGG BroadSeis data, the reinforcement of the conclusions from the 2D data and the new, initial interpretations we are able to make. The on-going technical studies and well planning activities represent the final phase of de-risking prior to being ready to commence drilling by March 2013 as the terms of our exploration licence oblige us to do."
Mining
Serabi (LON:SRB) jumped 20% to 11.5p on 6 times the average daily volume, after the company announced “final independent laboratory analytical results from the shallow infill and extensional drilling programme at the Piaui Prospect at their 100% owned Jardim do Ouro project. Final analyses of previously reported preliminary results tabled below show a higher reported gold grade on average of 14.9%. This upgrading in tenor is a result of the analytical techniques used. Preliminary onsite results were completed via an aqua regia digest analytical technique whereas the independent laboratory ALS Minerals of Vancouver has reported results derived from a 30gm fire assay.” While the company was in the mood for updating it also announced “A Placing of 27,300,000 Units to raise GBP2.73 million at a price of 10.0 pence per unit” Resistance at 12p will be the first area to watch here, a break of that could lead to a test of resistance at 15p. With the funds being raised at 10p one would assume that could now act as a support level.
Atlantic Coal (LON:ATC) issues its 2011 production update today, the update said that during 2011 it mined 208,730 tons of run-of-mine, or ROM, coal, compared with targeted annual production of 300,000 tons. The market didn’t like the sound of production below target, and voted with its feet, by knocking the stock 5% easier to 0.37p. The stock did test the major support at 0.32 first thing this morning, but as we have seen many times, holders have drawn a line in the sane there. Major resistance at 0.4p is the main area to see this stock break.
Regency Mines (LON:RGM) has been a very quiet stock recently, sitting at the 1.8p level. Yesterday the stock traded just over 8 million shares after an update from Red Rock Resources (LON:RRR) which Regency own almost 20% of. That’s about 4 times the recent traded average for this stock. Doing a little more digging in to this one I found this in the last drilling update on 31st of October last year “Drilling has accelerated in the last two weeks from one rig to four rigs while a fifth will become operational when parts arrive from overseas and the joint venture looks forward to releasing more drill results in the coming months.” Possibly the recent increase in volume is the market getting ready for the possible drill result update that could be due? Another we will keep our eyes on.
After the recent straight line rally, from 30p to 68p, it was no surprise to see some profit taking in Sierra Rutile (LON:SRX). The stock was trading 7% easier at 62p. Director purchase over the last few weeks have kept retail investors chasing the stock higher. Jan Castro bought 75,000 at 33.3p – followed by the same chap buying another 70,000 at 41p – then again he bought 35,000 at 54.62 – Then we saw Michael Barton buy 20,000 at 55p, and most recently Jan Castro bought another 25,000 at 54.78.
An old punters favourites Amur Minerals (LON:AMC) has started to catch the eye a little, as volumes have steadily been increasing. The stock has not done anything exciting of late, and reading through the previous announcements, the company sounds as though it should have a number of things to update the market on in 2012. Support does look to sit around the 8.5p level, and resistance looks to be around the 10p mark. If volumes continue to step up over the next few trading sessions, it will be interesting to see if the stock can test the resistance at 10p. We will be watching this one closely.
Last week I highlighted the significant move higher in Arian Silver (LON:AGQ). The stock had moved higher on a large increase in volume. I highlighted a few of the resistance levels that the stock had gone through, and the headline resistance at 20p. The stock has now passed through the 20p resistance and continued to move better, pushing another 5% better in trading to a high of 23p. Resistance here at 23p and then 26p look to be the new levels of interest. The old resistance of 20p that was broken could act as the new support now.
From the trading floor
The FTSE 100 paused for breath today, after its recent good run of form. The market was trading 42 points easier (-0.73%) at 5740 at the time of typing. Volumes were a little better than the previous few trading sessions at this point, with just over 600 million shares changing hands in the main board. The FTSE AIM All-Share was 0.75% easier at the time of typing with another 2 billion shares changing hands.
The International Monetary Fund (IMF) said the global economy is in danger because of the euro crisis. The IMF predicts the global economy will grow by 3.25% in 2012, down from an earlier forecast of 4%. The growth forecast for the UK economy has also been cut to 0.6% from 1.6%.
Swiss oil refiner Petroplus has said it will file for insolvency after failing to reach an agreement with creditors to extend deadlines for loan repayments. Petroplus had its credit lines frozen by its lenders in December last year, and its credit rating downgraded by S&P amid fears over the size of its debt. The company owns the Coryton oil refinery in Essex.
Commodities Corner
Gold – ↓Trading at $1664, down $12 (-0.67%)
Silver – ↓Trading at $32.071, down 19c (-0.61%)
Copper – ↓Trading at $8289, down $81 (-0.97%)
Zinc – ↑ Trading at $2087, up $27 (+1.29%)
WTI Crude – ↓Trading at $98.66, down $1 (-1.09%)
Brent Crude – ↓Trading at $109.84, down 73c (-0.66%)
Natural Gas (HH) – ↑ Trading at $2.63, up 1c (+4.27%)
FX
GBP vs USD = 1.5586
GBP vs EUR = 1.2003
Written by Steven Asfour, Sales Trader at Fox-Davies
