UKOG slumps while Falcon Oil & Gas advances

A look at some of today's top risers and fallers in London

oil and gas operations
The two oilers were moving in opposite directions

1:15 am: UKOG slumps while Falcon Oil & Gas advances

Shares in onshore explorer UK Oil & Gas Investments PLC (LON:UKOG) tumbled around 13% on Wednesday as investor continued to react unfavourably to the latest well results from southern England.

Yesterday, the company revealed that the Broadford Bridge well - which is testing the Kimmeridge play within the Weald basin - flowed between 10 and 72 barrels per day via pumping of the KL5 zone.

UKOG chief executive Stephen Sanderson described it as “positive and encouraging” though the share trading trends may disagree.

Elsewhere in the sector, Australia focussed explorer Falcon Oil & Gas Ltd (LON:FOG) saw its shares shoot up 12.5% to 17.22p as it gave insight into additional potential for its Beetaloo shale project in the Northern Territory.

Mining junior Red Rock Resources Plc (LON:RRR) rose 12.8% after a loan was repaid to the company.

Building services firm Bilby PLC (LON:BILB) shares gained 14.6% to trade at 109.45p after a trading update told investors that its ‘considerable progress’ with a number of large scale contracts is ahead of schedule.

Residential gas and electricity services specialist Flowgroup Plc (LON:FLOW) slumped 23% due to the forces dilution caused by a new £5mln funding arrangement.

9:30 am: AA shares breakdown on slashed dividends, Barratt rallies as interims reassure

Losing about a quarter of its value in Wednesday’s early deals AA PLC’s (LON:AA) apparent share price breakdown appeared quite severe.

The roadside recovery group somewhat smuggled news of a massive dividend cut, with the annual pay-out down to 2p per share (last September the interim payment for 2017 was 3.6p), into a ‘strategy update’ which also effectively included a profit warning.

Russ Mould, investment director at AJ Bell, in a note, highlighted that AA shares have now lost around 60% of their value since the company floated on the stock market and exited private equity ownership.

“Like many companies which join the market after exiting private equity ownership AA was carrying a lot of debt after its float in June 2014. This was seen as manageable given strong cash generation but while the company has been busily paying down its borrowings, it still has a substantial amount of net debt.

“This has left the stock exposed as it faced management upheaval and growth concerns.”

He added: “Management note earnings would have to drop to £200m to risk breach banking covenants, while this is materially lower than the reduced guidance of £335m to £345m for the January 2019 financial year, if the restructuring is more difficult, expensive or time-consuming than expected then this apparently comfortable position could end up looking more precarious.”  

Elsewhere, UK housebuilder Barratt Developments PLC (LON:BDEV) saw its share price gain around 1% after its half year results boasted of improving revenues, margins and profits.

Barratt is increasing its interim dividend to 8.6p, up 17%, and it claimed that sales were off to a positive start in 2018.

“With reservations rates, average prices and completions all ticking up, it’s easy to see where Barratt gets the confidence to nigh-on double its investment in new land, while simultaneously earmarking another £175m for shareholder returns,” said George Salmon, analyst at stockbroker Hargreaves Lansdown.

“Taken in the context of shakier UK housing data recently, these moves from the UK’s biggest builder are reassuring.”

Proactive news headlines:

Collagen Solutions PLC (LON:COS) is to make an initial submission for a CE mark after positive results from a clinical study of ChondroMimetic implants. Collagen's shares opened 29% higher at 3.49p as the company revealed quantitative three-dimensional magnetic resonance imaging analysis in the long-term study concluded that cartilage regeneration in the treated defects had reached a level and structural quality nearly identical to native cartilage.

Skin health specialist SkinBioTherapeutics PLC (LON:SBTX) remains on track to start its first human study for its cosmetic application in the third quarter of 2018. In its half-year results statement covering the second half of 2017, the life sciences company said it ended the year with £3.6mln in cash, up from £400,000 or so a year earlier

SDX Energy Inc (LON:SDX) (CVE:SDX) has finished drilling the KSS-2 well  at the Sebou project onshore Morocco, though analysis determined that the gas saturation was too low and the well is not deemed to be commercial. KSS-2 encountered 8 net metres of high quality reservoir, on prognosis, but, the company believes that the well location has been isolated from the reservoir source rock as it is on the ‘upthrown’ side of a fault.

Range Resources Ltd (LON:RRL) has announced the appointment of Lubing Liu as its new chief operating officer, effective March 1, and at the same time the company updated investors on its operations in Trinidad. Average net oil production amounted to 777 barrels of oil per day in January, representing 23% growth compared to the rate measured for the quarter ending December 31.

FairFx Group PLC (LON:FFX) has acquired international payments and travel currency services provider City Forex Limited, for a consideration of £6mln payable in cash. The electronic banking and international payments group said the acquisition of City Forex is expected to be immediately earnings enhancing.

Coinsilium Group Limited (NEX:COIN) announced that it has been engaged by online education platform operator Tutellus Technologies SL to advise them on the development of a blockchain-based platform in advance of its upcoming Token Generation Event.

Eco (Atlantic) Oil & Gas Ltd. (LON:ECO) (CVE:EOG) has forwarded on the first batch of seismic data shot by Tullow Oil (LON:TLW) over the Orinduik field. French giant Total has an option to take a 25% working interest in Orinduik from Eco for a payment of US$12.5mln.

Rainbow Rare Earths Limited (LON:RBW) expects to commission the new processing plant at the Gakara mine in Burundi later this month, after which the scale of mining should pick up sharply. The plant is now running as designed said Rainbow and final adjustments have been completed.

Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) has detailed new insights regarding the potential of its Beetaloo shales discoveries in Australia, coming from the analysis of project operator Origin Energy. It comes as the two partners anticipate news of the Northern Territory’s review of fracking, which is under moratorium, when the authorities release a long-awaited report next month.

Faron Pharmaceuticals Ltd (LON:FARN), the clinical stage biopharmaceutical company, will today host an R&D Day to discuss its strategy and pipeline developments, including a focus on Clevegen, Faron's second wholly-owned pipeline product. The event will take place today from 13:00 to 15:00 GMT at the offices of Panmure Gordon, One New Change, London, EC4M 9AF.

Motif Bio PLC (LON:MFTB) (NASDAQ:MTFB), the clinical-stage biopharmaceutical company specialising in developing novel antibiotics, has announced that three iclaprim abstracts have been accepted for presentation at the upcoming 28th European Congress of Clinical Microbiology and Infectious Diseases (ECCMID 2018) to be held in Madrid, Spain, April 21-24, 2018.

Taptica International Ltd (LON:TAP) has announced that it will be attending this year's Mobile World Congress, the world's largest exhibition and conference for the mobile industry, in Barcelona from 26 February to 1 March, where Tremor Video DSP, a Taptica company, will host a session as part of the MWC Partner Programme on 'The fusion of TV & Digital: 1 to 1 creative storytelling'.

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