The oil and gas sector was at the centre of attention in the afternoon as a few sector plays emerged among the biggest movers of the day. These included Heritage Oil (LON:HOIL), which was at the bottom of the FTSE 250 pile in afternoon trade and peers Oilex (LON:OEX) and JKX Oil & Gas (LON:JKX), whose shares were in demand in London.
However, it wasn’t all about oil and gas in London markets today as the interim management statement from Ocado (LON:OCDO) was among the most popular stock exchange announcements. The grocer reported an increase in sales as more customers preferred shopping online to going to grocery stores.
Sales across the group climbed 10.9 percent to £162.1 million in the 12 weeks to February 19.
The increase in revenue came as the average number of orders surged 13.4 percent to 116,987 per week, offsetting a decline in the size of the average order from £118.06 for the same period of the previous year to £115.49.
The group’s performance during the period benefitted from recent enhancements at the Hatfield Customer Fulfilment Centre (CFC), which is currently operating at record levels of capacity. The highest number of orders delivered in a week topped 134,000 compared to the 124,000 reported for the first quarter of 2011.
“Despite the continuing economic headwinds in the UK, more and more consumers are seeing the benefits of online grocery shopping, and in particular, the service that we offer,” said Ocado chief executive Tim Steiner
“Evidence suggests we have largely overcome the operational challenges we faced in expanding our Hatfield capacity in the second half of 2011, and are set to meet growing demand through the rest of the year.
“We expect to see acceleration in sales growth as the year progresses.”
Moving to Heritage, the report from the FTSE 250 constituent, which also made the list of the most read RNS statements, revealed that the Miran West-3 well in the Kurdistan region of northern Iraq is taking longer than expected, having encountered a high pressure interval that had to be sidetracked.
This interval has now successfully been drilled and the well is currently at a depth of 2,910 metres and being logged.
The appraisal well is targeting the Jurassic reservoir intervals discovered by the Miran West-2 well. Heritage is planning a number of tests, expecting drilling operations to be completed within the next couple of months.
“The degree of fracturing and high pressure encountered in these deeper intervals have meant that the drilling programme is taking longer than expected, but nevertheless, the data being obtained is vindicating our approach in drilling this deviated well,” said chief executive of Heritage Tony Buckingham.
In order to speed up the drilling programme, Heritage has moved a second rig to location, which is expected to start drilling shortly.
Fellow midcap, business software group Misys (LON:MSY) did better, rallying seven percent to 338.4 pence in early trade to top the FTSE 250 leaderboard after confirming takeover discussions with CVC and its largest shareholder ValueAct Capital.
Heritage’s sector peers JKX Oil & Gas and Oilex also did well as JKX announced an exploration success in Ukraine, where it operates the Zaplavskoye licence, while Oilex has successfully retrieved the stuck milling assembly and coiled tubing from its Cambay-76H horizontal well in the Cambay field onshore Gujarat.
JKX reported that on completion of a 36-hour test, the Z-04 well on Zaplavskoye flowed at a rate of 20.8 million cubic feet of gas per day and 1,040 barrels per day of condensate. The well has now been tied back to the main Novo-Nikolaevskoye complex processing facility and placed on production.
The company, however, said, that these rates are likely to decline over the coming weeks. In the meantime, JKX will continue monitoring the well to assess the extent of the accumulation.
The update lifted demand for shares in the oil and gas explorer, which were up 4.5 percent at 160 pence this morning.
Another oil and gas stock that attracted buyers today was Parkmead Group (LON:PMG), which managed to extend Friday’s gains of 3.75 pence by a further 0.75 pence to reach 23 pence per share thank to speculation that a “transformational deal” could be in the works.
Parkmead also topped the list of the most popular searches on Google Finance with investors looking for the latest M&A rumours involving the company.
The AIM quoted explorer, which back in February acquired 20 percent stakes in four blocks in the UK Southern North Sea, is chaired by Tom Cross, the man behind the success story of Dana Petroleum, which was sold to Korea’s state owned company KNOC for £1.87 billion.
Parkmead’s assets in the UK southern North Sea host a number of targets including the large Pharos gas prospect, which Parkmead expects to drill later this year or early in 2013. The projects, which are located between the producing Amethyst, Ravenspurn, West Sole and Hyde Fields, contain the 47/10-8 gas discovery.
In the meantime, Parkmead expects to spud a well on the Platypus field within the next few weeks.
On message boards, investors speculated that the company could make an all-share bid for fellow North Sea operating small cap Deo Petroleum (LON:DEO).
Like PMG, Deo Petroleum has seen its share price rise sharply over the past few days, jumping from 27 pence a week ago to the current price of 33.5 pence.
However, investors have expressed concerns about Cross’ ability to raise funds for the development of Deo’s main asset, the Perth field in the North Sea, following the merger.
Some even speculated that KNOC may bid for Deo to secure more assets in the North Sea, but others noted that the Korean group would be more interested in a company with more a more advanced asset portfolio.