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Views from the Trading Floor Monday 30th January
Saints & Sinners
Oil & Gas
Nostra Terra Oil & Gas (LON:NTOG) continues to look interesting, and sifting through the most recent investor presentation, it highlighted a number of things. According to the Expected Development Schedule, Bale Creek in Northern Oklahoma, where the company has identified 7 potential locations, should be getting close to spudding. Nostra Terra have a 30% working interest at the site which is 3,500 acres. Phase 1 looks to include 1 pilot well, and 3 horizontal wells. The presentation also highlights that the company is debt-free and has available cash in the bank to fund phase 1 of Bale Creek. The company anticipates it will be cash positive in 2012, thus giving them funds for further growth. Shares had traded Fridays volume before the start of lunch, and were trading flat at 0.42p. The story does look interesting here, and we will be keeping close tabs on developments.
TomCo Energy (LON:TOM) volumes were perky again today, trading nearly the average daily volume before midday. Holders here are still waiting for an update on operations from the company, as they have been rather quiet on what they are up to for some time. For those that are new to the TomCo Story, TomCo Energy Plc. engages in the acquisition and development of oil properties in the United States. It involves in acquiring participations in shallow producing oil wells and drilling prospects. The company owns a 100% interest in 2 State leases (7 blocks) covering 2,918 acres in the Uinta Basin, Utah estimated to contain approximately 230 million barrels. In addition to this resource, it has sound environmental credentials with its Breakthrough license agreement signed in March 2010 with Red Leaf Resources Inc. for the use of EcoShaleTM 'in-capsule' technology on TomCo leases.” Now w e have seen a number of Warrants converted recently, and if they have been sold directly in to the market, could have been hindering any potential move higher. We will be watching the news wires here for any potential update from the company.
Gulf Keystone (LON:GKP) volumes were very interesting today, with nearly 10 million shares changing hands before lunch, on a quiet day in the market. We will be watching the news wires over the next few days to see if anybody reports the sale. An interesting point to note from the last Kurdistan operational update, was John Gerstenlauer, Gulf Keystone's Chief Operating Officer comments, "Initial results of the Shaikan-4 well testing programme are very encouraging with logging results indicating that Shaikan-4 may be the best well which Gulf Keystone has logged to date in the Kurdistan Region of Iraq. We look forward to adding to our already outstanding drilling success in the region by completing further Shaikan-4 well tests, which will be followed by more results from the Shaikan-5 and Shaikan-6 appraisal wells before the appraisal programme of the Shaikan world-class discovery is completed. Initial results from the Ber Bahr-1 exploration well and progress in the 2012 wide-ranging exploration, appraisal and early development programme of the Akri-Bijeel block are also highly anticipated." So the market will be looking for updates from Shaikan-5 and Shaikan-6 over the coming weeks.
Gold Oil (LON:GOO) slipped 8% to 2.6p today, on 3 times the average daily volume. The Oil & Gas exploration and production company, with a focus on Latin America, updated the market with its Interim Results, that on face value did not read all that bad. The main points of interest were, revenue for the six months ended Oct. 31, 2011, GBP715,000 (2010: GBP474,000). Pre-tax loss GBP90,000 (2010: loss GBP785,000). Diluted loss per share 0.02 pence (2010 0.14 pence). Cash and cash equivalents GBP8.3 million (2010: GBP2.8 million). Gained environmental approvals for marine 3D seismic over Block Z34 offshore Peru. Acquired over 800 square kilometre of marine 3D seismic over Block Z34 offshore Peru. The company CEO, Richard Mew said that he looks forward to 2012 with a high degree of optimism.
New World Oil & Gas (LON:NEW) slipped 15% to 9p on 5 times the average daily volume, after the company announced that based on interest from institutional investors and lenders it has decided to undertake a fundraising of approximately US$35 million during February. In order to undertake this funding, the Company needs to increase its authority to issue shares and accordingly, a notice of an extraordinary general meeting to take place on Wednesday 15 February 2012 will be dispatched to the Company's shareholders (and will be published on the Company's website) on Monday 30 January 2012, to pass certain resolutions necessary to allow the fundraising to take place. Investors did not like the sound of this and headed for the exit. Good support does look to be at 9p, but with a large fund raising over the companies head, it would not be a surprise if the technical levels go out the window.
Nature Group (LON:NGP) dropped 12% to 60p after the company issued a trading statement. The main point that holders focused on was an insurance claim by the company for damages and business interruption following the accident had been denied. It said pre-tax profit for the year to Dec. 31 would be GBP1.5 million if the denial is upheld after an appeal by the firm's lawyers. The profit figure is lower than previous expectations. In 2010, the company posted adjusted pre-tax profit of GBP2.3 million.
Egdon Resources (LON:EDR) the Oil & Gas exploration and production company, which owns acreage in the UK and France, jumped 7% to 11.75p on 4 times the average daily volume before the end of lunch. Reading through the recent updates from the company I found this little snippet “PEDL206 was awarded in the 13(th) Onshore Licensing Round in 2008 and is located immediately to the east of PEDLs 118 and 201 which contain the Company's Dukes Wood-1 and Kirklington-3z oil wells that are due to resume production in 2012. The licence contains the Kelham Hills abandoned oil field, which produced two million barrels of oil between 1941 and 1957. A number of leads and prospects have been defined on existing seismic data which will be the focus of future exploration activity.” We will be watching the news wires for the announcement that the Dukes Wood-1 and Kirklington-3z oil wells are ba ck in production.
Europa Oil & Gas (LON:EOG) moved 6% better in trading to 9p, albeit on thin volume. The market will be looking for confirmation of this section of the last update on the 20th of January “Following the unscheduled downtime, the Company is pleased to confirm that it remains on course to produce an average of approximately 185 bopd for the six months to 31 January 2012 in line with the range provided in the announcement of 16 December 2011, and representing a 22% improvement on the
151 bopd achieved in the equivalent period the previous year.” Will the company give an update to confirm that the well is producing the 185 bopd anticipated?
Mining
Noventa (LON:NVTA) continued its impressive run of form, jumping another 13% to 21p before the end of lunch. Shares have jumped from 16.5p to current levels in only 3 days of trade. The stock had major resistance at 17.5p, that the company smashed through on Friday, and did not look back today. Shares look to be on a course to test resistance at 22p.
Goldplat (LON:GDP) jumped 7% to 15p during trading today, after the company announced its gold recovery operations in South Africa and Ghana performed well over the first half, adding that it expects to report a significant increase in operating profit and that total gold production over 2012 is expected to exceed the 28,185 ounces produced in 2011. Major resistance sits at 15p, and should the shares break and close above this level, a test of weak resistance at 17p-18p could be on the cards.
Noreseman Gold (LON:NGL) moved 14% better to 6.35p on huge volume today, after the company announced that it has today requested and been granted a trading halt from its shares on the Australian Stock Exchange pending an announcement with respect to its operations and corporate restructuring at Central Norseman Gold Company Ltd. The Company's shares have not been suspended from trading on AIM. As announced on 22 December 2011, the Company is in discussions with a potential strategic partner looking to take an active role in the development of Norseman Gold. The potential partner has experience in operating at Norseman, and therefore understands the mines, the ore bodies and their potential. Resistance at 6.7p followed by 7.5p look to be the next two areas of interest here, with 5.5p looking to be potential support.
Highland Gold Mining (LON:HGM) dropped 5% to 180p after the company issued a trading statements. Production for the year to Dec. 31, 2012 is forecast to be in the range of 200,000 ounces to 215,000 ounces, or oz, of gold and gold equivalents. Group wide production for the year to Dec. 31, 2011, was 184,102 oz of gold and gold equivalents from Mnogovershinnoye, or MNV, Novoshirokinskoye, or Novo, and Belaya Gora. These numbers looked like a decrease on the previous forecasts, hence the small sell-off.
African Eagle (LON:AFE) popped 12% to 6.25p, albeit on thin volume. The shares have been largely uneventful over the last few months, sticking to the 5.5p to 6p range. If the shares can hold above the 6p level, 6.5p then 7.5p look like the next areas of major interest.
Bellzone (LON:BZM) were another active stock today, after the company said the Forecariah JV Project in the Republic of Guinea, West Africa, remains on schedule to begin production and stockpiling of iron ore in first quarter of 2012. On site commissioning of mine and process plant equipment. Road construction on schedule for haulage in first quarter of 2012. Shares tried to rally early on, but stopped just shy of the 32p mark, before selling off again, to trade flat on the day at 30p just after lunch.
Thor Mining (LON:THR) have been spoken about on numerous occasions here over the last few weeks, mainly because of the volume and price increase. Shares have jumped 50% over the last few weeks, on anticipation of an update, and that is exactly what holders got today. The company announced an overall 25% tonnage increase to 4.7 million tons in a new resource estimate for the Molyhil tungsten and molybdenum project in the Australia's Northern Territory. Holders took the update as a chance to jump in, pushing the shares through major resistance at 1.4p. If they can hold above the 1.4p level then 1.6p looks to be the next major resistance level.
Still no update on who has been selling huge blocks of Frontera Resources (LON:FRR), but the shares continued the large volume, with another 63 million shares changing hands before the US market had opened and the stock was 5% higher at 1.45p. I am still very keen to see exactly who has been doing not only the selling, but the buying as well. Eyes glued to the news wires here.
From the trading floor
A painfully quiet day today, with the FTSE 100 trading a measly 400 million shares before the US open. The main index was 77 points easier (-1.34%) at 5656. The main reason for the selloff was continued fears over Greece, as many investors were expecting a deal to be struck over the weekend. The FTSE AIM All-Share was 0.46% easier on volume of 1.15 billion shares.
Iran has hinted it may halt oil sales to some western countries, as the dispute between the Western world and Tehran continue to heat up. The warning from Iran comes only a week after the announcement that the EU will stop importing oil from Iran from July 1st.
Pretty much all the US economic data expected today, hit the wires, in-line. Personal Income came in at +0.5% versus +0.4% expected. PCE deflator YoY was expected to hit at +2.3% and came in at +2.3%.
The Eurozone summit started today, and the current economic crisis and on-going problems in Greece and Portugal will be the main topics of interest. The European Union has more than 23 million unemployed people, and the main fear is that deep cuts across the Eurozone nations will only hinder the jobs market.
Commodities Corner
Gold – ↓Trading at $1728, down $7 (-0.41%)
Silver – ↓Trading at $33.41, down 39c (-1.21%)
Copper – ↓Trading at $8426, down $153 (-1.79%)
Zinc – ↓ Trading at $2116, down $35 (-1.66%)
WTI Crude – ↓Trading at $98.69, down 84c (-0.83%)
Brent Crude – ↓Trading at $111.09, down 37c (-0.33%)
Natural Gas (HH) – ↓ Trading at $2.55, down 1c (-1.81%)
FX
GBP vs USD = 1.5671
GBP vs EUR = 1.1967
Written by Steven Asfour, Sales Trader at Fox-Davies
