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Ascent Resources, Mariana Resources, Wood Group, Atlantic Coal and others feature in Fox-Davies Capital Newsflash



Cairn Energy plc (LON:CNE, 289.7p, ▲ 2.95%) released its half yearly results.  Highlights:  Sale of 40% shareholding of the fully diluted share capital in Cairn India Limited (CIL) to Vedanta Resources plc (Vedanta) to be completed in two stages - the first tranche of 10% which realised $1.4 billion completed July 2011 and the second tranche of 30%, approved by the Go vernment of India (GoI) in June, subject to certain conditions, will realise $4 billion; Two of the GoI conditions - Cess and Royalty payable - are currently with CIL shareholders for approval, Cairn has voted to accept these conditions, with voting results due on 14 September 2011; The Mangala field is currently producing at a rate of 125,000 barrels of oil per day (bopd): Bhagyam development on track; scheduled to commence production in Q4 2011; Multi well, multi basin Greenland exploration campaign ongoing, using two rigs; Gross operated production: 166,527 boepd (H1 2010: 87,523 boepd); Average net entitlement production: 77,056 boepd (H1 2010: 32,866 boepd); Group revenue on a continuing basis $1.3 billion (H1 2010: $333 million); and at 30 June 2011, the Group had net cash of $1,003 million (H1 2010: $267 million).  CIL had net cash of $1,048 million, comprising $1,452 million cash and $404 million debt.  PLC/Capricorn had net debt of $45 million, comprising $75 million cash and $120 million debt. 

Ascent Resources plc (BUY, £0.15) (LON:AST, 2.97p, ▲ 9.17%) has successfully completed the drilling of the Pg-10 well at the Petišovci Project in Slovenia.  The results confirm the reservoir quality and potential commerciality of the Middle Miocene reservoir section, which is independently estimated to contain over 400 Bcf of gas-in-place, and delineate the subs tantial new deeper reservoir section discovered by the Pg-11A well. The Pg-10 well was drilled to a total depth of 3,545m.  The appraisal of the deeper Miocene or 'K' sand reservoirs showed a total of approximately 123m of new net additional reservoir with 63m of good to moderate sand quality along with another 60m of poorer quality sands in a 370m gross reservoir section.  Importantly, gas is present throughout the 'K' sand in PG-10 and with the total depth of the well 45m below Pg-11A, it increases the depth of the deepest known gas.  The independent audit of the gas-in-place estimate of 412 Bcf attributable to the Project by RPS Energy ('RPS') will now be updated.  Given the larger than expected thicker reservoir discovered by Pg-10, Ascent remains confident that the RPS P50 gas in place estimate will increase significantly.  Both Pg-10 and Pg-11A are now being completed in preparation for fracture stimulation.  Mobilisation of fracturing equ ipment is planned for September 2011.  Following the appointment of global oil services company Halliburton as the contractor for fracturing and ancillary services, final treatment design is underway.  This fracture stimulation programme is being funded from existing cash resources.

Tower Resources (HOLD) (LON:TRP, 4.75p, ▲ 0.53%) provided an operational update.  In Uganda, the high resolution aero gravity gradiometry survey over the Company's Exploration Area 5 was completed in June 2010 and the interpreted data clearly indicated an area expected to be favourable for the generation of hydrocarbons. It also highlighted a clearly defined structural hig h in the vicinity of the newly defined hydrocarbon kitchen. This interpretation provided the basis for a focused 187 km 2D seismic programme, which was completed on 4 August 2011 and the final data is being processed and interpreted.  Once interpretation is complete, this high quality data will enable the choice of a suitable well location within the next month. Proposals from rig contractors and other service providers are being finalised and it is envisaged that a well can be drilled in the fourth quarter of 2011. Offshore Namibia, in which the Company has a 15% carried interest in Licence 0010, the Company has been notified by Arcadia Expro Namibia, the operator and 85% interest holder, that it is continuing its farm-out process and is expecting farm in proposals shortly from a number of potentially interested international oil and gas companies ahead of drilling a well on the very large Delta structure. Tower Resources is working with its drilling consultants in ord er to ensure that the drilling programme remains on track to spud a well as early as possible in the first half of 2012, currently anticipated in Spring.

Jubilant Energy N.V. (LON:JUB, 52.50p, ▲ 1.45%) announced settlement of the ongoing arbitration with Tap Oil in connection with Permit T-47/P located in Australian waters. Under the terms of settlement, Jubilant has paid AUD 1.67 million (approximately USD 1.62 million) in full and final settlement against a claim of AUD 3.24 million (approximately USD 3.15 million) towards cas h calls raised up to the period of 31st July 2011, related claims, interest and costs. As part of the settlement the joint venture partners have agreed that participating interests of Tap Oil and Jubilant will become 61.5% and 38.5%, respectively for future expenses, risks and rewards. The joint venture partners have agreed to limit the future expenses at AUD 297,000 (AUD 114,000 net to Jubilant) which is to be funded from the equivalent cash balance already available in the joint venture. These expenses relate to permit maintenance and do not include any drilling costs, which is not contemplated at this time due to the low prospectivity of the Permit. 

Antofagasta plc (UNDER REVIEW) (LON:ANTO, 1212p, ▲ 2.45%) announced its half yearly financial report for the six months ended 30 June 2011. Net earnings for the period were US$696.2 million representing an 54.3% increase on the 2010 half year, reflecting both higher average commodity prices and also the increase in production volumes. 2011 first half copper production was 288,500 tonnes, 14.1% above the first half of 2010. Forecast production for the 2011 full year is in the range of 620,000 to 640,000 tonnes of copper, compared with 521,100 tonnes in 2010, mai nly due to the contribution of Esperanza. 2011 gold production is expected to be in the range of 200,000 to 215,000 ounces compared with 35,100 ounces in 2010 also as a result of Esperanza, while molybdenum production at Los Pelambres is expected to be 10,600 tonnes, ahead of the original forecast for the year and compared with 8,800 tonnes in 2010. The weighted average cash costs (net of by-product credits) is 105.6 cents per pound, compared with 91.5 cents per pound in the first half of 2010, reflecting increased on-site costs at the operations including higher costs during Esperanza's ramp-up period, The forecast for the 2011 

Atlantic Coal plc (UNDER REVIEW) ( LON:ATC, 0.32p, ► 0.0%) announced its results for the six months ended 30 June 2011. Revenues were up 55% to $7,481,880(H1 2010: $4,827,508) to return a gross profit of $843,106 (H1 2010: gross loss of $1,003,343) The company is aiming to produce 300,000 tons of run-of-mine ("ROM") coal for 2011. 

Hochschild Mining plc (UNDER REVIEW) (LON:HOC, 458p, ▲ 2.19%) announced its interim results for the six months ended 30 June 2011. H1 2011 production was 11.1 million attributable silver equivalent ounces. The Company reported an increase in unit cost per tonne at its main operations in Peru (Arcata and Pallancata) of 12% in H1 2011 to $66.5 (H1 2010: $59.6). Excluding mine royalties, which are directly linked to higher metal prices, the unit cost of main operations in Peru increased by 6%. At San Jose in Argentina, unit costs increased by 37% whilst excluding mine royalties unit costs increased by 33%. Ares and Moris, Hochschild´s two high cost ageing mines, experienced increases of 17% and 16% respectively. During the period the company recorded a record half year revenue of $496.8 million, up 62% and attributable profit after tax of $92.0 million, up 137%. The company has stated that it remains on course to deliver the stated production target of 22.5 million attributable silver equivalent ounces. 

Mariana Resources Ltd (LON:MARL,17.63p, ▲ 8.46%) announced that the fourth drilling programme at its 100% owned Las Calandrias Gold-Silver Project in southern Argentina has commenced. The drilling programme will comprise at least 10,000m with minimum of 5,000m in the first stage of a two stage programme. The company will test seven new targets all outside the outlines of the Calandria Sur and La Calandria initial resources announced on 11 July 2011.

Shanta Gold Limited (LON:SHG, 22.88p, ▲ 1.10%) announced the results of its Feasibility Study supporting the development of the Company's 100%-owned mine in the district of Singida in Tanzania. The Study has determined that a mine producing 45,000 ounces of gold per annum at a capital cost of US$39m and an average escalated operating cost of US$412 per ounce, and (based on a US$1200 per ounce gold price an 11% discount rate) should generate a net present value of US$130 million and would have an internal rate of return of 126%. The results will enable Shanta to increase gold production to more than 100,000 ounces once the new project is in production alongside the New Luika Gold Mine. It is currently anticipated that the New Luika Gold Mine, currently in the final phase of construction, should generate sufficient funds for the construction of the Singida mine during 2012. The New Luika Gold Mine is expected to ramp up to full production in 2012. 

Wood Group (BUY) (LON:WG., 518.50p, ▲ 2.17%) announced its results for the half year ending 30th June 2011. Total revenue stood at $2,828.8M, up 17% from the H1 2010 figure of $2,409.7M, and EBITA was $192.0M, up 25% from $153.3M, for an EBITA margin of 6.8%. This yielded adjusted diluted earnings per ordinary share of 25.2 cents, up 45% from the H1 2010 figure of 17.4 cents. In Engineering, there was good first half revenue growth and margin improvement with strong performance in upstream and subsea & pipelines. The division currently has a strong order book and good bidding pipeline. Wood Group PSN experienced good activity levels in the North Sea, with the first half also benefitting from strong performance in the US, held back by start up delays in Australia and Oman. The integration is reportedly progressing well and strong second half performance is anticipated. In Gas Turbines, maintenance EBITA was up over 20%, and Power Solutions contracts are progressing well.


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