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Views from the Trading Floor - Featuring Max Petroleum, Ithaca Energy, Premier Oil and Centamin Egypt 25th JuneJune 25 2012, 5:21pm
Saints & Sinners: Oil & Gas
Max Petroleum (LON:MXP) tried to push higher during early trading, reaching a high on the day of 5.25p, although the trades that high only went through while the stock was still uncrossing at 8am. The shares did settle around the 4.15p area during afternoon trading.
Ithaca Energy (LON:IAE) eased 10% to 99p during early trading after the company issued an Athena Operations Update saying the operational programme since start-up has been focused on achieving full and stable production from the four production wells and processing plant on the BW Athena floating production, storage and offloading vessel ("FPSO") and assessing the potential of the wells and the optimal production rates for the maximisation of oil recovery from the field over the coming years. The execution of these operations has progressed as planned. All the production facilities are now fully commissioned and the BW Athena is operating as designed, with continued well optimisation activities ongoing. The first cargo of crude has been transferred from the FPSO to the storage tank at the Ithaca operated Nigg oil terminal using the Betty Knutsen shuttle tanker. Currently only three of the four production wells on the field are flowing as a result of a suspected downhole restriction in one of the wells. Testing has shown that there are no issues with the integrity of the well or performance of the reservoir in the area of the field drained by the well. The changeable flow rates achieved from the well during testing indicate that the restriction is likely attributable to a blockage in the production tubing located within the well. Diagnostic work is ongoing to identify the nature of the blockage and the most effective course of action for eliminating it. Gross production from the field is currently approximately 12,000 barrels of oil per day ("bopd"), 2,700 bopd net to Ithaca with three producing wells. Meanwhile, water injection is online to support the production wells. Based on the data obtained, the gross production potential of the restricted well is approximately 5,000 bopd, 1,125 bopd net to Ithaca.
Lochard Energy (LON:LHD) slipped 11% to 8.375p at the mid-price during afternoon trading on the back of the Athena operations update. Lochard Energy have a 10% holding in the project, through its ownership of Zeus Petroleum.
Premier Oil (LON:PMO) moved 4% easier to 327p during afternoon trading after the company said it will plug and abandon the Coaster exploration well on UK Block 28/10 and the Benteng-1 exploration well on the Buton Block in Indonesia. Coaster exploration well has reached a total depth of 5684 feet and is being plugged and abandoned as a dry hole. Total of 17 feet of Tertiary sandstones were encountered, but these were shown to be water wet on logs. Next exploration well to be drilled by Premier in the North Sea is the Spaniards East well on UK block 15/25a, which is due to spud in September. Benteng-1 exploration well has reached a total depth of 12424 feet and is being plugged and abandoned as a small but potentially commercial oil discovery. Good oil shows were encountered over a 111 feet interval from a depth of 2375 feet and initial log analysis indicates a 15 feet oil bearing Tertiary limestone reservoir. Next exploration well to be drilled by Premier in Asia is the Chim Sao Northwest appraisal well, which is due to spud in July.
Valiant Petroleum (LON:VPP) slipped 7% to 355p during early trading after the company said that drilling has completed on the Tryfan prospect (Valiant, 33.33%) located in UK Block 3/17. The well encountered both Frigg and Dornoch sandstones on prognosis with a small gas column present at the top of the Frigg formation interpreted to be sub-commercial. The well will now be plugged and abandoned.
Serica Energy (LON:SQZ) was active once again today after the company said the Minister of Mines and Energy in Namibia has consented to the assignment by Serica of a 30% interest in Serica's Luderitz Basin Licence 0047 to Exploration (Luderitz Basin) Limited, a wholly owned subsidiary of BP, and the novated Licence has been approved by the Ministry. The assignment results from the farm-in by BP to Serica's Licence offshore Namibia which was announced in March this year. Under the terms of the farm-in, BP has agreed to earn a 30% interest in the Licence by meeting the full cost of a 3D seismic survey over an area of up to 4,150 square kilometres across the Licence.
Petrel Resources (LON:PET) pushed 5% higher to 4.875p during early trading after the company announced its results for the year ending 31 December 2011. Highlights: Strong cash position of EUR 4.2m (2010; EUR 2.7m) aided by receipt of payments of $2.5m in relation to the Engineering, Procurement and Supervision of Services (EPC) contract on the Subba and Luhais oil field. Gained two exploration licenses in the Irish Atlantic Margin, Diversified asset portfolio with planned expansion into Africa, Provided further financial comfort to the Ghanaian National Petroleum Company to assist ratification of our signed Petroleum Agreement on Tano 2A Block, Ghana. John Teeling, Chairman of Petrel Resources, said "We have a strong cash position, expertise, data, skills and live operations. But we are not satisfied. We are examining ways in which we can use all of the assets and expertise in Petrel to revitalise interest in the company. In a time of massive economic uncertainty, Petrel, with cash, is in a good position."
Saints & Sinners: Mining
Petropavlovsk (LON:POG) moved 3% higher to 468p during early trading after Nomura Upgraded the company to a BUY from neutral and keeps its price target of 735p.
Richland Resources (LON:RLD) were 3% higher during early trading after the company announced its audited results for the year ended 31 December 2011, highlightingEBITDA profit of $3.5 million, 17% improvement from EBIDTA profit of $3.0 million in 2010. Net profit increased by 33% to $0.8 million ($0.6 million in 2010) Revenues increased by 29% to $20.5 million ($15.9 million in 2010). Consolidated bank balance at 31 December of $1.9 million. Trade and other receivables at 31 December of $6.5 million. Tanzanite inventory stock at 31 December of $5.7million (of total inventory of $6.7milion) Total assets of $47.1 million. Total non-current assets of $30.1 million. Total current assets of $17 million. Production levels were increased by 200,000 carats in 2011, up 9% from 2.2 million to 2.4 million carats. Average recovered grade of 58 carats per tonne. Grade decreased 2% compared with 59 carats per tonne achieved in 2010. Maiden Tsavorite JORC Indicated & Inferred Resource established in 2011 of 8.49 - 12.57 million bank cubic metres ("bcm") The Tanzanite Experience sales were 29% higher in 2011 compared to 2010, at $1.8 million. Post-period Highlights, JORC compliant resource upgrade for the Block C tanzanite mine, Total Inferred and Indicated Resource of 105 million carats, Commenting on the results, Chief Executive Officer, Bernard Olivier said: "Our second year of profit is testimony to our continued margin enhancement programme and significantly enhanced production rates. Despite the continuation of the global financial issues the company was able to achieve a total revenue of $20.5million and EBIDTA of $3.5 million. We continue to remain focused on creating shareholder value during 2012 through developing new markets, especially in China, and through the development of our in-house cutting and polishing facilities to maximize margins from extraction operations."
Centamin Egypt (LON:CEY) pushed 7% higher to 69p during early trading as holders cheered the results of the Egyptian elections. The Muslim Brotherhood's Mohammed Morsi was named as the new Egyptian President. It may be a little too early to realise the intentions of the new chap, but it will be interesting watching this one unfold.
Nyota Minerals (LON:NYO) slipped 5% to 5.45p at the mid-price during afternoon trading after the company said the latest assay results from drilling at Bendokoro and Tulu Kapi demonstrate the gold mineralization potential that exists at the company's exploration assets. Peak drill assay intercept on the Bendokoro Prospect, in the Northern Block, of 100 g/t Au over 0.64 m; and Assay results for the remaining five holes drilled at the Bendokoro Prospect in the first phase of the drilling campaign expected over the next few weeks. Tulu Kapi: Assay results from diamond drilling campaign confirm strike continuity of deep high grade mineralization Tulu Kapi Definitive Feasibility Study will represent significant milestone but exploration success is fundamental to the future potential of the Company.
Polo Resources (LON:POL) pushed 3% higher to 2.71p during early trading after the company said it was notified on 22 June 2012 that following a purchase on the same day of 2,000,000 ordinary shares of no par value of the Company ("Ordinary Shares") at an average price of 2.58 pence per share, Neil L. Herbert, Executive Co-Chairman of the Company, is interested in a total of 85,385,625 Ordinary Shares, representing approximately 3.72 per cent. of the issued share capital of the Company.
From the trading floor
Another day of selling pressure in the FTSE 100 again today, pushing the main index 43 points easier to 5471 (-0.77%) on painfully thin volume of 270 million shares by the time the US opening bell sounded. The FTSE AIM All-Shares Index was 1% easier on volume of 480 million shares.
Gold - ↓Trading at $1572, down $2 (-0.17%)
Silver - ↓Trading at $26.85, down 5c (-0.23%)
Copper - ↓Trading at $7313, down $18 (-0.25%)
Zinc - ↓Trading at $1798, down $19 (-1.05%)
WTI Crude - ↓Trading at $78.92, down 81c (-1.02%)
Brent Crude - ↓Trading at $90.46, down 53c (-0.58%)
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