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Saints & Sinners: Oil & Gas         

Red Emperor Resources (LON:RMP) and Range Resources (LON:RRL) pushed 8% and 6% higher to 20.75p and 9.2p respectively. Both stocks have been getting attention over the last few days after saying that drilling operations on the Shabeel North well in Puntland, Somalia have commenced, adding that the planned target depth of the well is 2,400 metres and drilling is expected to take 45 to 60 days to complete. The well, the second in the current drilling campaign, is being operated by Joint Venture partner, Horn Petroleum Corp (HRN). Red Emperor holds a 20% working interest in the Dharoor and Nugaal Valley Production Sharing Agreements along with Horn and Range Resources. The Shabeel North well is targeting Upper Cretaceous Jesomma sands, which had good oil and gas shows in the Shabeel-1 well 3.5 kilometres to the south. Petrophysical analysis of downhole electrical logs in the Shabeel-1 well indicated a potential pay zone in the Jesomma of up to 12 to 20 metres with an average porosity of 18 to 20%. It is planned to bring the rig back to the Shabeel-1 location to test these sands to confirm their ability to flow oil once the drilling of the Shabeel North well is completed. Range Resources have also given the market an update that showed a significant increase in Proved [P1] and Probable [P2] reserves for the North Chapman Ranch Project, in which Range holds a 20-25% interest. Range's net attributable interest in proved reserves increased 54%-57%; Range's net attributable interest in probable reserves increased 16%-20%.

Magnolia Petroleum (LON:MAGP) jumped 6% to 2.525p during afternoon trading after the company said that the Brady 17-27-12 1H and Lois Rust 7-27-12 1H wells are now both producing, though initial production rates have not yet been released by the operators. Total number of producing wells in the Bakken/Three Forks Sanish, North Dakota and the Mississippi Lime and Woodford/Hunton formations in Oklahoma now totals 77. The SPS 6-26 well, operated by Paul Gillham & Co, located in Pottawatomie County, Oklahoma and targeting the Hunton Formation has now been spudded and is currently drilling; total number of wells drilling or awaiting completion now stands at two (SPS 2-26 and Henry 2-29). MAGP has rlected to participate in two additional wells (the Montecristo 6-1H and Beebe 24-W1H); total number of wells waiting to be spud now stands at 10. Acquired further 470.39 net mineral acres with average working interest of 16%; total net acreage in Mississippi Lime now stands at 4,011.39.

Kea Petroleum (LON:KEA) pushed 7% to 10.75p during early trading after the company said that work to start production from its recent discovery in the Puka 1 well has been successful, with the well flowing an "excellent quality light oil." The company said that preparations are now underway to start longer-term production testing of the well to establish production rates and reservoir characteristics. Kea has maintained its original estimate of a gross recoverable resource of 1 million barrels of oil with a potential upside of up to 3 million barrels of oil. "These results couldn't be better or more encouraging. If further testing confirms our expectations, Puka-1 will transform Kea into a profitable oil producer," Chairman Ian Gowrie-Smith said.

Gold Oil (LON:GOO) pushed 5.6% higher to 4.3p on decent volume as investors continued to play the range between 4p and 5p while they wait for the update on the potential Farm-In of the Z34 block in Peru.

Nostra Terra Oil & Gas (LON:NTOG) continued its bullish vein of form again today, adding another 14% to 0.67p on decent volume as investors continued to chase the stock higher, in anticipation of further updates from drilling at Bale Creek. The company has always tried to be very vocal when possible to keep investors up to date, so it would not be a surprise to see another update on the horizon. We will continue to watch the newswires and the volume here very closely.

Serica Energy (LON:SQZ) moved 7.6% higher to 24.75p during afternoon trading, albeit on thin volume. Directors have recently their hands in their pockets to buy shares, with Christopher Hearne (Finance Director) acquiring 14,115 ordinary shares at an average price of 23.91 pence per share taking his total beneficial shareholding to 785,263 shares representing 0.44% of the voting rights; and Peter Sadler (Business Development Director) acquiring 14,115 ordinary shares at an average price of 23.91 pence per share taking his total beneficial shareholding to 176,803 shares representing 0.10% of the voting rights.

Saints & Sinners: Mining             

Aquarius Platinum (LON:AQP) eased 5.5% to 69.5p after the company said that its partners in the Pooling & Sharing Agreement, or P&SA2, for the Marikana mine in South Africa, have agreed in principle to place the P&SA2 operations on care and maintenance, due to low platinum group metals basket prices. This decision has been made in the interests of preserving the P&SA2 ore reserves until an improved economic climate merits their extraction in the future. As a result, Marikana 4 Shaft and the Marikana concentrator plant will be placed on care and maintenance, and the remaining management functions at P&SA2 will be consolidated with those of the P&SA1 at Kroondal. Preparations for these events have been initiated, and the required consultative processes will start Monday. Trading conditions in the platinum industry are expected to remain difficult in the short to medium term and these conditions have rendered the operations at the P&SA2 uneconomic.

Triple Plate Junction (LON:TPJ) slipped 21% to 1.625p at the mid-price after the company said that its joint venture partner Newmont Mining Corp (NEM) has suspended exploration drilling for six months at the Morobe project in Papua New Guinea, following a lack of success at its second exploration target, Gumots. Triple Plate holds a 49% stake in Morobe with Newmont holding the remainder. Gumots is one of 15 prospective drill targets identified across the Morobe joint venture tenements, Triple Plate said. Given the exploration failure, Newmont has decided to suspend active drilling whilst the project focus is directed at additional exploration field work for the purpose of opening up and reducing the risk of future drilling at the numerous additional potential drill targets across the territory, including the Minawa and Pade prospects.

Caspian Holdings (LON:CSH) dropped 10% to 0.38p at the mid-price during afternoon trading on almost 3 times the average daily volume by the end of lunch. The last update from the company back on the 25th of May that said it had acquired Australian Iron Ore PLC (AIO) and its owned subsidiary Iberian Resources Portugal Recursos Minerais Unipessoal LDA or IRP for a consideration of €1 million. As a result of the acquisition of AIO, Caspian will own/have rights to four tungsten projects and the prospective Portalegre gold exploration property. The company now proposes to acquire the entire issued share capital of AIO for a consideration amounting to EUR1 million to be satisfied by the issue of 269,300,000 Ordinary Shares at 0.30 pence per Ordinary Share. The directors will seek authority to issue such shares at the forthcoming AGM.

ENK Plc. (LON:ENK) jumped 5% to 11.625p during early trading after the company commented on the JORC resource upgrade for its Zambales Chromite Mining Corporation ("Zambales") tenement. The Company, in consultation with its resource consultant Snowden Industry Mining, has determined that the historic Falconbridge test pit data collected in the 1970s, which was used to calculate the previous JORC Inferred resource estimate of 23.5 million tonnes grading 1.18% Ni and 0.05% Co, is of insufficient detail to be used in the calculation of a JORC Indicated resource estimate due to the lack of ancillary elements and detailed logging data that the newer drilling data has provided. As such the Company will now undertake the drilling of additional holes, adjacent to the historic test pits, to collect this missing data. Upon the completion of the current drill programme at Acoje which is expected within the next 2 weeks, the 4 drill rigs will be relocated immediately to the Zambales tenement. A drill programme is now planned which will provide the data required to enable Snowden to provide a JORC Indicated resource estimate for this tenement. The Zambales resource update is now expected to be available by the end of September 2012.

From the trading floor  

After the Spanish banking bailout over the weekend I think we were all a little surprised to see the futures called up over 100 points early doors, something that the smart money did not believe for more than an hour, as they sold into the overreaction. The market is now getting the jitters as Ireland and Greece may look to seek new terms on their own bailouts as Spain received more favourable terms. As I type the FTSE 100 is only 35 points higher at 5470 (+0.69%) from being up just over 100 points at the high of the day, on volume of 520 million shares just as the US opening bell rang. The FTSE AIM All-Share Index was 0.51% higher on volume of just over 500 million shares, which is actually a pretty dull day of volume compared to recent times.

Commodities Corner    

Gold - ↑Trading at $1595, up $3 (+0.14%)

Silver - ↑Trading at $28.71, up 7c (+0.23%)

Copper - ↑Trading at $7429, up $182 (+2.49%)

Zinc - ↑Trading at $1881, up $2 (+0.08%)

WTI Crude - ↑Trading at $84.86, up 75c (+0.89%)

Brent Crude - ↑Trading at $100.36, up 89c (+0.89%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com