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Views From The Trading Floor - 7th February
Saints & Sinners
Oil & Gas
Aminex (LON:AEX) and SOLO Oil (LON:SOLO) finally issued a drilling update from the NTORYA-1 well, and it did not make for pleasant reading. The company said that its Ntorya-1 exploration well in the Ruvuma Basin onshore in Tanzania didn't find oil or gas at the depths it anticipated, and it will now run tests on the well and check data to determine whether to carry on drilling or not. It said the well is designed to test the oil-bearing sands previously encountered in the Likonde-1 well, 14 kilometres to the north. The well was drilled to 2,500 meters but was expected to find oil or gas shows at between 1,800 meters to 1,900 meters. Support at 2.7p on Aminex does look to be the main area of interest here, with 0.50p looking to be major support for SOLO Oil.
Lochard Energy (LON:LHD) the oil & gas exploration company focused on the North Sea, jumped 6% before lunch to 9.75p. Volume shave been rather thin over the last few trading sessions as holders wait for further developments on the Ithaca Energy (LON:IAE) bid. Volumes have just started to pick up once again, with over a million shares changing hands before lunch, and that helped push the stock through resistance at 9.35p. Next line resistance looks to be around the 11p area, and could well test it if the volume continues in this fashion.
Nostra Terra Oil & Gas (LON:NTOG) jumped 8% to 0.46p mid-price just before lunch, as holders started to get ready for the spudding of the companies Bale Creek asset. In the last update the company said “Bale Creek update, Following 3D seismic interpretation at Bale Creek, locations of the initial wells have been adjusted. Site construction is now underway, and spudding is expected to follow. Further updates on both the foreclosure process and Bale Creek will be made in due course.” With volumes increasing, and the price rising, could we be in store for an update here? Big brother is watching.
Gulfsands Petroleum (LON:GPX) were a little weaker today, trading 5p easier at 170p before lunch. Volumes have been nothing to shout about recently, and major support looks to be around the 165p area. Obviously any update on the situation in Syria, or any update on Gulfsands receiving the funds owed to them this one could light up. I will be watching the news wires for updates and shall report back accordingly. One for the watch list.
Sterling Energy (LON:SEY) pushed 4% better to 39.5p on almost 10 times the recent average daily volume. Shares have been very quiet since the last update back on the Ntem Farmout agreement in Cameroon with Murphy Cameroon Ntem Oil Co. If the shares can break the 40p major resistance, then it would seem that a retest of 44p could be on the cards. An old punters favourite to keep a close eye on.
Magnolia Petroleum (LON:MAGP) started to move again today, pushing 7% better to 1.5p before lunch. The shares have been on a fantastic run ever since the company announced an update on the drilling of the two Eckelberg wells in the Bakken / Three Forks Sanish Formations in North Dakota, in which it participates with leading US oil and gas operator, Marathon Oil Company. Now for a company the size of this to have any dealings with Marathon Oil it can only be a bullish sign. On 19 January 2012, the Company received confirmation from Marathon that both wells have been spud: the Eckelberg 14-23H on 6 December 2011; and the Eckelberg 14-23TFH on 31 December 2011. The two Eckelberg wells are now being drilled and further updates will be
provided to the market as and when they become available. We will be watching this one very closely for the updates as they appear.
Xcite Energy (LON:XEL) have slowly slipped back to major support of 90p today, albeit on very thin volume. Holders here continue to watch for developments and updates on its Bentley Field in the North Sea. These seem to be stuck in a tight range between 90p and 100p. It does look as though these will need a positive update to get them firmly through the 100p resistance.
Petrolatina (LON:PELE) have been stuck between 15p and 17p for the last few months, as holders sit and wait for updates on the seismic acquisition programme on the Putumayo-4 block. An interesting point to note here is, that there are only 32.3 million shares in float according to Bloomberg, so any news flow here does tend to swing this one about aggressively. We will be watching for the seismic update here.
Mining
Angel Mining (LON:ANGM) dropped 6% in trading to 2.1p, as retail investors continued to sell. The company said in a previous announcement, that it would be pouring gold from its Nalunaq asset every 2 weeks. The most recent, and largest single pour to date was announced on the 1st of February, and if the company is going to pour every 2 weeks, we should be in store for another pour around Wednesday of next week. It would not be a surprise to see these get animated once again going into the gold pour. Support looks to be around the 2p area, with resistance looking to be 2.8p now.
Beowulf (LON:BEM) jumped another 12% to 15.75p at the mid-price just after lunch on decent volume. Shares have been trading around 500,000 to 1,000,000 a day over the last few months, but have been trading 3 to 4 times that over the last few sessions. First line resistance at 15p looks to be the main area of focus here, and a close above could get the chartists excited and support looks to be around 13.50p. Holders here continue to sit tight waiting for any sign of an update on both its Kallak North and Kallak South permits that remain suspended.
Galantas Gold (LON:GAL) jumped 10% to 4.75p after the company announced Concentrate production in the last quarter of 2011 saw a 255% increase compared to 2010. At 740.2 wet tonnes, the increase is due to improvements in the processing plant and to milder winter conditions than the unusually adverse conditions experienced in 2010. During the whole of 2011, concentrate production was up by 55% compared to 2010, even though the early part of the first quarter of 2011 was affected by the same adverse winter conditions as noted in Q4 2010. First line resistance looks to be 4.5p, with 5p looking to be the resistance thereafter.
Regency Mines (LON:RGM) continued its impressive run, pushing another 14% to 2.5p. Shares have really been motoring the last few sessions, since the company issued a Nickel Laterite drilling update, and the proposed sale of royalty interest. The main area of interest here is the resistance at 3p, and break and close above could lead to a test of the 4p resistance from the summer of last year.
KIBO Mining (LON:KIBO) jumped 60% to 2.5p just after lunch, and on huge volume for the stock. Well over 3 million hand changed hands by 1pm, and for a stock that tends to trade 250,000 to 350,000 on a good day, that sort of volume does catch the eye. First line resistance sits at 2.5p and any break and close above that could lead to a retest of the resistance at 3p.
ECR Minerals (LON:ECR) pushed another 4% better in trading to 1.2p, on a massive 10 times the average daily volume. The shares jumped after the company said “that the results of initial metallurgical testwork carried out on samples from the company's Sierra de las Minas gold project area in La Rioja Province, Argentina have been received and are highly positive. Four samples of 20kg each were sent to the ALS Ammtec laboratory in Perth, Western Australia, where they were prepared for analysis. Two samples were taken at the El Abra prospect and one sample was taken at each of the Maestro Agüero and Casas Viejas prospects. The four samples show high variability in gold grades, indicating the possible presence of coarse grained gold. First line resistance looks to be 1.25p followed by major resistance at 1.5p.
Richland Resources (LON:RLD) continued its very impressive run, pushing another 4% better to 12p by lunch. Shares have been on a great run since the turn of the year, jumping from 8p to its current levels. Holders here continued to cheer the resources upgrade from yesterday, that said JORC compliant for its tanzanite mining operation in Tanzania indicated resource of 30.6 million carats, adding that the new indicated resource alone provides for a life of mine of 30 years at the planned production ramped-up over the next 5 years to 2.7 million carats a year. First line resistance looks to be 12p, followed by major resistance at 14p.
Herencia Resources (LON:HER) jumped 5% to 2.18p on decent volume before lunch, as holders here get ready for the Assay results that are due this month. Resistance here looks to be 2.2p followed by major resistance at 2.5p. We will have our eyes fixed to the 7am news wires for the update holders are clearly getting excited about.
From the trading floor
The FTSE 100 had a rather mixed open this morning, as traders were trying to decide if they liked the BP numbers or not. The index was flirting with positive and negative territory for the best part of the morning, before finally giving up the fight and slipping 26 points easier to 5865 as I type. Volumes were light even though its looks as though the deal between Glencore (LON:GLEN) and Xstrata (LON:XTA) will be going through. The FTSE AIM All-Share Index was 0.35% easier on volume of 1.13 billion shares before the US open.
German Industrial Production was the only real bit of economic data to watch for today, and it was not really anything to shout home about. Expectations were for a flat reading Month on Month, however, the reading was a lot worse than expected, coming in at -2.9%. The Year on Year number was equally uninspiring hitting the wires at +0.9% versus a consensus of +4.3%.
According to a report from the BBC business website, India's economic growth is likely to dip below 7% for the 2011-12 financial year, new government statistics show. The downward revision reflects the slowdown in mining, agriculture and manufacturing sectors. Only last week Prime Minister Manmohan Singh had re-stated government figures of 7%-7.5% growth. The figure for the 2010-11 year was 8.4%.
Commodities Corner
Gold – ↓Trading at $1718, down $2 (-0.12%)
Silver – ↓Trading at $33.41, down 23c (-0.66%)
Copper – ↓Trading at $8382, down $90 (-1.06%)
Zinc – ↓Trading at $2106, down $17 (-0.81%)
WTI Crude – ↓Trading at $96.20 down 72c (-0.74%)
Brent Crude – ↓Trading at $116.05, down 1c (-0.01%)
Natural Gas (HH) – ↑Trading at $2.59, up 5c (+1.84%)
Any questions please contactsteve.asfour@fox-davies.com
Written by Steven Asfour, Sales Trader at Fox-Davies
