Point Loma estimates proved plus probable reserves at 2,037 mboe Mon, 27 Feb 2017 15:43:00 +0000 Aminex and Solo Oil investors need patience, more details expected from Tanzania in mid-March Mon, 27 Feb 2017 14:42:00 +0000 Green Dragon's reserves rise for eleventh year running Mon, 27 Feb 2017 12:39:00 +0000 Oil price, Premier, Roxi, Union Jack, And finally... Mon, 27 Feb 2017 12:22:00 +0000 Oil price

Still stuck in a narrow trading range, both WTI and Brent rose by 21 cents last week. Friday might have been a lot better if London traders hadnt been suffering from the after effects of the IP dinner, but the boys in long trousers go and and do the Scottish Oil Clubs event on Friday as well. There were bullish remarks by the Opec Secretary General indicating that compliance is good and he included Russia in that which some observers doubt.

As we enter March on Wednesday we will start getting all the reports from the data collecting agencies who will have varying news on February output, if what we are hearing anecdotally it should be ok at the moment but I am sure that there will be the odd ‘rogue poll’. The rig count on Friday showed an increase of 3 overall and 5 in oil which is hardly going to clear the backlog, elsewhere on friday the stats showed that money managers were still very long crude oil.

Premier Oil

A slight whiff of panic from the market on Friday meant that Prems had to knock out a press release saying that all was going fine with the finalising of the refinancing of the debt process. With formal credit committee approvals needed and of course the amendment of terms for the convertible, many suits are needed to sign off the process. We are told to expect an update ‘in the next few days’ which can’t come too soon for everyone involved one way or another.

Roxi Petroleum

Roxi has announced that it intends to merge its and Baverstock’s interests in Eragon which itself holds a 99% interest in the BNG asset. I met with Clive Carver recently and it has been a long planned event in order to ‘bring our principal asset under direct control’ whilst at the same time capitalising the debt by converting the Vertom loan. As a result of this deal and the issue of shares to Baverstock and Kuat Oraziman these two will own 43.86% of the stock and the company will be effectively debt free and ‘without the funding restraints of the current structure’.

Union Jack Oil

Union Jack has announced that it has raised £1.4m through an oversubscribed placing at 0.135p. The company is fully funded at present for its commitments, this raise is to increase interests in its existing licences and by the sounds of it we should expect something pretty soon. Although the discount is high I have to say that the company appear to be doing the right things at present.

And finally…Poopers in LaLaLand…

Quite difficult to know where to start but with Scotland beating Wales and Ireland beating France both Celtic nations were looking to Twickenham yesterday to see how they rated their chances against England in upcoming matches. The tactical surprise that Italy came up with in order to avoid a proper walloping was in some eyes very smart and others against the spirit of the game. Either way when the dunderheads eventually worked out how to combat it, they filled their boots as it were, against a rubbish Italian team, bring on Georgia who are above Italy in the world rankings and probably wouldnt try to pull a cheap stunt like this.

The first piece of silverware this football season is now in the trophy cabinet at the Theatre of Dreams after the Red Devils saw off the Saints in a remarkably good game at Wembley yesterday. In the Prem there were wins for Chelski and Spurs as the Gooners, the Noisy Neighbours as well as the aforementioned Red Devils didnt have a game. Tonight it will be interesting to see if the spineless Foxes owners are at the King Power  Stadium to see their team take on the HubCap Stealers…

A shame to see that Barry Geraghty is out of Cheltenham after a fall at the weekend, watching which of the JP horses he chose and in what races, was going to be an interesting pointer to the Festival which is only a fortnight away.

There will be a very special Razzie for PriceWaterhouseCooper or Pooperscoopers as they are affectionately known next year after their incompetence led to ugly scenes at the Oscars when they gave the best movie award to the wrong film. One must conclude that if they can’t fulfill such a straightforward auditing task then maybe big companies may be a step too far after all…Ryan Gosling wasnt too pleased either I couldnt help noticing….

]]> Infrastrata tanks as it announces fundraising for Northern Ireland project Mon, 27 Feb 2017 10:26:00 +0000 JP Morgan impressed with Shell’s LNG business Mon, 27 Feb 2017 10:24:00 +0000 Mosman Oil and Gas ups investment in diamond explorer Mon, 27 Feb 2017 08:39:00 +0000 Drax to buy two distressed US pellet plants as it expands operations Mon, 27 Feb 2017 08:33:00 +0000 Nostra Terra Oil and Gas CEO talks of 'exciting times' following latest acquisition Mon, 27 Feb 2017 08:21:00 +0000 Nostra Terra Oil and Gas Company plc (LON:NTOG) chief executive Matt Lofgran talks to Proactive about the company's acquisition of additional production assets, located in the Permian basin, United States.

]]> Roxi Petroleum unveils deal to take control of BNG project Mon, 27 Feb 2017 08:15:00 +0000 LGO Energy to start new drilling operations next week Mon, 27 Feb 2017 07:50:00 +0000 Union Jack Oil raises £1.4mln to boost onshore UK portfolio Mon, 27 Feb 2017 07:28:00 +0000 'We've got a huge investment base to drive this company forward', says Saffron Energy CEO Fri, 24 Feb 2017 15:56:00 +0000 Michael Masterman, chief executive of Saffron Energy plc  (LON:SRON) spoke to Proactive's Stocktube on the day the Italian oil producer began trading on London's AIM market.

Saffron Energy's a producer and explorer of natural gas based in Northern Italy and owns three fields - Sillaro, Bezzecca and Sant'Alberto.

]]> Husky Energy reports rising production as oil stabilised in Q4 Fri, 24 Feb 2017 13:55:00 +0000 Diversified Gas & Oil unveils production boosting acquisition Fri, 24 Feb 2017 11:39:00 +0000 Powerhouse Energy tipped to reach 2p per share in coming months Fri, 24 Feb 2017 10:32:00 +0000 Powerhouse Energy Group Plc (LON:PHE) has plenty going on in terms of fundamentals, according to chartist Zak Mir, who says the chart is ‘equally golden’.

The technical analyst, highlighting a ‘golden cross’ formation in the chart, sees support for the share at the 1p level and reckons the price could rise as high as 2p over the next three to four months.  

]]> Drax shares look set to bounce, but not yet - Zak Mir Fri, 24 Feb 2017 10:28:00 +0000 The Drax Plc (LON:DRX) chart has come off the boil, according to technical analyst Zak Mir, but, he reckons the share price may bounce off the 325p level.

Mir says the best case scenario would see the price rise to around 400p (current price: 341p).

]]> UBS upbeat on BP ahead of first medium/long term strategy update for three years Fri, 24 Feb 2017 09:27:00 +0000 Sound Energy making rapid progress with latest Morocco well Fri, 24 Feb 2017 07:35:00 +0000 PowerHouse Energy to head north with its breakthrough gasification technology Fri, 24 Feb 2017 07:13:00 +0000 Riva Resources secures cash for cobalt project Thu, 23 Feb 2017 21:30:00 +0000 'Tell Sid' that dividend rises depend on debt reduction for British gas-owner Centrica Thu, 23 Feb 2017 13:15:00 +0000 Gulf Keystone: Cantor Fitzgerald repeats ‘buy’ recommendation amid export changes Thu, 23 Feb 2017 10:57:00 +0000 British Gas-owner Centrica flags-up future dividend hike but investors disappointed by pegged payout now Thu, 23 Feb 2017 09:00:00 +0000 Empyrean Energy receives last of Sugarloaf money, looks forward to Chinese exploration Thu, 23 Feb 2017 08:34:00 +0000 Magnolia Petroleum chairman Thomas Wagenhofer resigns Thu, 23 Feb 2017 08:29:00 +0000 VSA Capital Market Movers - Millennial Lithium, Glencore and KAZ Minerals Thu, 23 Feb 2017 08:29:00 +0000 Millennial Lithium (CVE:ML)
Millennial Lithium has announced that it intends to complete an equity placing of C$8.7m at a price of C$1.45 per share (6m shares), a discount of 4% to the last close. For each share purchased investors will receive one half common share purchase warrant. This will entitle the holder to purchase one common share a t a price of C$1.9 for a period of 24 months from the closing date.

Proceeds will be used to advance the Pastos Grandes project, in Argentina, particularly drilling and process and evaporation trials engineering as well as working capital. ML indicates that the full placement would enable a PEA to be completed.

Please click here for our recent initiation.

We reiterate our Speculative Buy recommendation.

Glencore (LON:GLEN)
Glencore has announced modestly improved results for 2016. Revenues of US$153bn were up 4% YoY while adjusted EBITDA of US$10.3bn was up 18% YoY. EBITDA for energy products and agricultural products were down 20% and 19% YoY to US$1.5bn and US$138m respectively. This was despite the recovery in oil prices. However, the recovery in metals prices meant that the improvement in EBITDA in the metals division of 43% YoY to US$6bn more than offset weakness in other divisions. Net income of US$1.9bn was up 48% YoY. GLEN reduced net debt by 40% YoY to US$15.5bn, below the published target, while capex was down 41% YoY to US$3.5bn. GLEN announced a dividend of US$0.07/sh.

KAZ Minerals (LON:KAZ)
KAZ Minerals  has announced strong results driven by a combination of rising copper and gold prices as well as a strong operational performance. Revenue of US$969m was up 43% YoY as copper production of 140kt was up 73% YoY and gold production of 120koz was up 245% YoY, ahead of guidance. Group net cash costs of US$0.59/lb were down 46% YoY, driven by the significant by product credit contribution. Consequently EBITDA of US$492m was up 136% YoY. Net income of US$180m reversed a loss of US$10m in the prior year. KAZ has opted to not pay a dividend given the ramp up of Aktogay and Bozshakol, which drove the increase in production, is ongoing. We note that net debt increased 18% YoY to US$2.7bn owing to continued pressures from expansionary capex. However, with the ramp ups progressing well, KAZ appears to be on track to reducing its operating leverage.

]]> Gulf Keystone to go long haul as Kurdistan takes Shaikan crude out of export pipeline Thu, 23 Feb 2017 07:56:00 +0000 Nostra Terra adds production, receives cash injection and sheds light on placing U-turn Thu, 23 Feb 2017 07:27:00 +0000 Carnarvon Petroleum and Quadrant Energy prepare for Dorado-1 exploration Wed, 22 Feb 2017 23:30:00 +0000 First Solar shares drop as it swings to quarterly loss Wed, 22 Feb 2017 14:38:00 +0000 KrisEnergy appoints new chairman Wed, 22 Feb 2017 11:55:00 +0000 Active Energy expecting significant growth this year from its CoalSwitch initiative Wed, 22 Feb 2017 09:37:00 +0000 VSA Capital Market Movers - Millennial Lithium Wed, 22 Feb 2017 08:40:00 +0000 Millennial Lithium (CVE:ML)
Millennial Lithium  has announced the results from the completion of a ground geophysics programme at its Cruz Property in the Salta Province, Argentina. Southern Lithium (SNL CN) has an option to acquire up to 80% of the project through the completion of certain payments, exploration funding and completion of a feasibility study.

A Transient Electromagnetic Survey (TEM) covering 20.25km2 demonstrated a continuous north-south trending conductive unit over a distance greater than 6km, the full distance of the Cruz property. In the central core of the property indications of brine are apparent from 30m and up to 250m beyond which point data becomes limited due to the highly conductive nature of the anomaly. High conductivity is often an indication of high lithium brine contents.


]]> Rested US bulls crank up the volume Wed, 22 Feb 2017 08:21:00 +0000 FTSE 100 Index called to open +10pts at 7285, having traded sideways 7275-7290 overnight into the apex of a narrowing pattern. Bulls need a break above 7290 to overcome 2-day falling highs resistance and revive hopes of a rally back to 7365. Bears require a breach of overnight rising lows at 7280 to open the door for a drop to support at 7250. Watch levels: Bullish 7295, Bearish 7275.

Calls for a firm open come after US bourses posted a solid return from a long weekend. Helped by corporate results, fresh record highs come via continued investor optimism about Trump policies that has now kept the S&P 500 Index from anything worse than a 1% fall for more than 90 days. A stronger USD suggests expectations of hawkish Fed minutes banking up this view this evening. DAX called to open +0.3% thanks to a weaker EUR.

Bullishness has been echoed in Asia overnight with only Japan’s Nikkei spoiling the party, flirting with breakeven on account of a slightly stronger Yen. Hong Kong is outperforming despite a continued drag from HSBC’s disappointing results yesterday. Australia’s ASX is higher thanks to a buoyant oil prices offsetting weakness among metals while retail sector results buoy and China property price growth maintains confidence.

FTSE sentiment may be impacted by Lloyds Banking Group results which appear to have beaten at the underlining profits before tax level (highest in 10 years; lower PPI) and the dividend being increased. Housebuilder Barratt Developments says it is confident with its FY outlook thanks to forward sales +17% and has announced special dividends of £175M for both Nov 2017 and Nov 2018.

Having enjoyed a long weekend, US equity markets continued where they left off, with the four major bourses of Wall Street all notching fresh record closing highs as corporate earnings once again impressed. The Dow Jones rallied 0.6% as Retail names Home Depot and Wal-Mart reported positive FY earnings, while the S&P also closed 0.6% stronger as all 11 sectors represented on the index finished firmer. The Nasdaq finished 0.5% higher and the small-cap Russell outperformed, up 0.65%.

Crude Oil prices broke out from 2017 falling highs resistance yesterday morning, as optimism that OPEC’s production cut is effectively rebalancing the supply glut saw fresh bullish sentiment in the marketplace. However, US dollar strength in the face of the Euro at 6-week lows could see potential investors deterred as the relative value of both Brent and US crude decrease.

Gold, having recovered from a one week low of $1226 yesterday, was unable to overcome weekly highs of $1238, further hampered by a trend of falling highs resistance that began on Friday. While political tensions in the US and Europe - most notably France - may harbour fresh demand for the safe haven asset, emergent US dollar strength today (Fed minutes this evening could be a key influencer) may see the precious metal test support at $1233.

In focus today will be UK Q4 GDP (9.30am) for which the second estimate is seen unchanged at 0.6% QoQ for a third straight quarter and 2.2% YoY for the second quarter in a row as the Index of Services and Business Investment both cooled into the end of last year.

Fed Minutes may also garner a smidgen of attention this evening given the hawkish rhetoric from the central bank of late (“unwise to wait to long”) and decent US data, although political uncertainty could yet play a part in delaying, even scuppering, plans for multiple hike stateside interest rate hikes this year.

Elsewhere this morning German IFO surveys (9am) may show all three components edging back again in February. The final reading for January Eurozone Consumer Price Inflation (CPI) is forecast to show a monthly figure plunging following last month’s jump while an annual jump is confirmed and the core print holds firm, albeit still well below the ECB’s 2.0% target.

This afternoon the China Leading Economic Index may add to this morning's solid property prices data to give us an update on the state of play in the world’s #2 economy, before US Existing Home Sales are expected to show an increase in January after December’s fall to add to the message of solid US consumer confidence.

Speakers today include the Bank of England’s (BOE) Cunliffe (11am) followed by his colleague Shafik (11.30am) before this evening sees the Fed’s Powell (6pm, voter, neutral) tee us up for the Fed Minutes (7pm)

]]> Sirius Petroleum to raise £2mln as preparations for Nigeria wells advance Wed, 22 Feb 2017 07:52:00 +0000 Altech Chemicals moves closer to alumina plant construction financing Tue, 21 Feb 2017 23:30:00 +0000 Riva Resources to reveal details from Tabac cobalt gold project Tue, 21 Feb 2017 23:00:00 +0000 Oklo Resources drills out more gold and extends drill program Tue, 21 Feb 2017 21:00:00 +0000 Hillcrest to earn 75% of Western Canadian petroleum assets Tue, 21 Feb 2017 20:19:00 +0000 'There's an awful lot to play for' - Cenkos analyst on 88 Energy's Icewine potential Tue, 21 Feb 2017 15:04:00 +0000 Cenkos Securities analyst Jack Allardyce talks to Proactive about 88 Energy's upcoming well - Icewine 2.

The company's first Icewine well, drilled in late 2015, confirmed a potentially significant new shale play up in Alaska’s North Slope region and the next well, slated for Q2 2017, is designed to test the discovery’s commercial viability.

Click here for Cenkos important information and disclaimer

Cenkos Recommendation History                            
Date                       Company        Share price Recommendation
15.03.16               88 Energy Plc      3.8p       BUY
07.09.16               88 Energy Plc      2.5p       BUY
04.11.16               88 Energy Plc      2.3p       BUY
16.01.17               88 Energy Plc      2.5p       BUY

]]> Is 88 Energy on the verge of unlocking several billion barrels of oil potential? Tue, 21 Feb 2017 14:57:00 +0000 VSA Capital Market Movers - Sula Iron & Gold, Anglo American and BHP Billiton Tue, 21 Feb 2017 14:50:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold has announced the issue of 9.375mn ordinary shares at an exercise price of 0.16p following the exercise of warrants. The gross proceeds raised amounted to £15k. Share capital is now 2,086mn ordinary shares.

We reiterate our Buy Recommendation and target price of 1.7p/sh.

Anglo American (LON:AAL)
Following strong production results Anglo American  has announced strong full year results. Group revenue of US$23.1bn was marginally higher at 1%. However, margins were significantly stronger owing to cost cutting and currency depreciation and EBITDA of US$6.1bn was up 25% YoY. The key segments which drove the improvement were De Beers, iron ore and coal although this was offset by modest declines in platinum and copper. Net income of US$1.6bn reversed a loss of US$5.6bn in the prior year.

AAL opted not to pay a dividend in 2016. The net debt target of US$10bn was well beaten, however, as the strong earnings combined with asset sales (US$1.8bn) and capex reduction (-37% YoY to US$2.5bn) resulted in a 34% YoY decline in net debt to US$8.5bn. AAL is targeting a further US$1bn in cost savings and is aiming to resume dividend payments by the end of 2017.

BHP Billiton (LON:BLT)
BHP Billiton  has released robust interim results as the strong recovery in bulk and base metal commodity prices offset production weakness in petroleum, copper and thermal coal. Group revenues for H1 FY 2017 were up 20% YoY to US$15.7bn driven primarily by the recovery in prices in iron ore, copper and coal. Underlying EBITDA of US$9.9bn was up 65% primarily as a result of the strong top line. EBITDA in the iron ore division was up from US$2.8bn to US$4.2bn while in copper EBITDA was up from US$0.8bn to US$1.7bn and US$0.2m to US$2bn in coal.

Net debt decreased from US$25.9bn to US$20bn owing to a 38% reduction in capex to US$2.7bn combined with the significant recovery in earnings. The final dividend of US$0.3/sh. meant that the full year dividend of US$0.4/sh. was up 150% YoY.

BLT has announced an increase in exploration spending for FY 2017 and 2018 by around US$400m.

]]> Europa Oil & Gas extends deadline for Wressle deal with Upland Resources Tue, 21 Feb 2017 14:23:00 +0000 Eland Oil & Gas has made a great start to 2017 but experts see much more upside Tue, 21 Feb 2017 13:45:00 +0000 Falcon Oil & Gas boss Philip O’Quigley exercises share options Tue, 21 Feb 2017 08:52:00 +0000 Petsec boss Terry Fern talks of the 'incredible upside' to the company's Yemen assets Tue, 21 Feb 2017 08:36:00 +0000 Terry Fern, chairman and managing director of Petsec Energy (ASX:PSA) runs Proactive through the company's producing assets in the U.S - as well as their development opportunities in the Republic of Yemen.

]]> Wood Group expects only modest recovery in key markets Tue, 21 Feb 2017 08:17:00 +0000 Eland Oil & Gas's crude shipping continues to be successful in Nigeria Tue, 21 Feb 2017 07:29:00 +0000 Zenith Energy offloads Argentina oil operations after failing to resume production Mon, 20 Feb 2017 15:27:00 +0000 Sound Energy well will test lateral extent of Morocco gas as well as tapping deeper-lying formation Mon, 20 Feb 2017 15:16:00 +0000 'It's crunch time' says 88 Energy's Dave Wall as they gear up to spud Icewine 2 Mon, 20 Feb 2017 14:52:00 +0000 88 Energy Ltd’s (LON:88E)  managing director Dave Wall joined us in the Proactive Investors studio to talk about the upcoming drilling programme at the Icewine shale discovery, on Alaska’s North Slope.

Wall discusses the potential of the new Icewine well, the anticipated timeline for the programme, and what investors can expect for what promises to be a very exciting 2017 for 88 Energy.

]]> Oil price, Sound Energy, Lekoil, President, Velocys, And finally... Mon, 20 Feb 2017 13:31:00 +0000 WTI $53.40 +4c, Brent $55.81 +16c, Diff -$2.41 +12c, NG $2.83 -2c

Oil price

The oil price was effectively flat last week, a few cents off between friends. The same influences are exerting and unless something changes dramatically we will remain range bound. All the reports are in and show around 90% adhesion to the Opec and Non-Opec agreement which is better than the doom mongers predicted and talk is already about not just extending the agreement come June but tightening it as well. By then it should be showing signs of working and even a rollover should create a modest shortage, a further cut would see prices rising again. The rig count only rose by 6 in oil last week, less than the overall number of 10 which is hardly blowing the doors off. The US is closed today for Presidents Day.

Sound Energy

News from Sound that TE-8 spudded yesterday which is highly encouraging as this 12 km step out appraisal well is drilling further into the TAGI reservoir and on deeper into the Paleozoic formation. The initial well should take 40-50 days plus 30 days for the sidetrack. In addition, the company has signed binding contracts for the OGIF deal which is very good news for shareholders as it opens up more of the company to them. With only weeks before the spud of the Badile well in Italy everything appears to be firing on all cylinders for Sound.

President Energy

I remain confident that President will deliver and today it announces a Puesto Guardian operations update. The rig is mobilised and operations have commenced, the programme is first to sort out the 2 producing wells that are in maintenance followed by the workovers of shut-in wells. To ensure value for money they are doing the multi-well frac programme in batches of three and also creating a water injector. All being well the target of 1,200 b/d in Argentina by the ‘end of summer 2017’ should be achieved.I have a call with Peter Levine coming up so may be able to add more later but this is broadly positive. at long last….


I met up with Lekoil recently after a number of followers suggested that it would be a good idea, it certainly was and particularly well timed. Today they have announced that they have started continuous production at Otakikpo, 5/- b/d now and up to 10/- b/d by the end of Q2 2017. The well is in a relatively safe part of town in the eastern Delta, away from the violence and the Shell/Chevron pipelines, I am told….It is also highly efficient with a cash breakeven of around $24. With some exciting projects on the case, highly supportive shareholders and now signs of activity Lekoil looks quite interesting, even to someone who normally avoids Nigeria for choice.


I recently met with David Pummell, CEO of Velocys, a company I have always found most interesting, if not usually rather too far away from visible progress. On meeting David again he greeted me with a glass jar and significant smile, a jar of wax made by VLS only 15 years after conception. With a plant now capable of making the product the key is how to leverage it and bring it to the market. The ENVIA plant in Oklahoma is the first smaller scale commercial GTL plant in the world and the opportunities are plenty, most important, these things are done in partnership which VLS have been building lately.

The company has a number of avenues to follow which shows important diversity and risk aversity, industries, technologies and geographies help to give balance and avoid any single market. These include focusing on the renewable jet fuel market in the US, stranded gas onshore in Canada and a number of ‘significant’ opportunities in Asia. The former has a substantial addressable market in the US for jet and diesel, up to 30 plants where VLS could put in kit and of course without doing the heavy lifting, design, build and hand over the keys is the mantra. Partnerships have been and will continue to be important, indeed take the potential with fuel traders with their need for credits, VLS have made a significant hire in this area already. Refiners and feedstock owners also come into this category as do airlines who will see increasing regulation on fuel blendings.

With regard to Asia much progress has been made in the last year and in the longer term I expect this area to be extremely valuable to the company. The size of the plants in China, made in partnership will be the most cost effective in the market and of course here, as in  the USA, bank financing and loan guarantees are available at the right times. I am reliably informed that much progress is being made in some key areas in China particularly where stranded gas is also a problem.

As time moves on there is little doubt that VLS is growing up, last years raise and a much lower cash burn helps and the balance sheet actually looks moderately healthy, by its standards. Shareholders appear to be highly supportive, the next year is looking increasingly exciting and  progress is looking as good as it has for a long time.

And finally…

It was mainly about the FA Cup at the weekend and the giant killing by Lincoln City who beat Burnley and to a lesser extent Milwall who beat the Foxes. Chelski, the Red Devils, Spurs and Boro go through as well although the Noisy Neighbours were held to a draw at Huddersfield…The Gooners are at Sutton tonight and will play Lincoln in the next round, apart from that the stand out tie is at the Bridge where Chelski host the Red Devils.

Cue card was majestic on Saturday and the Tizzard yard will be busy on Gold Cup day with four already in the picture.

Ben Stokes went for £1.7m in the IPL to play for the Rising Pune Supergiants, as one does, Tymal Mills went for £1.4m (?) with Woakes fetching £500/-, Morgan £245/- and Roy £120,-.

]]> Shares in Victoria Oil & Gas could now move “significantly higher” says Zak Mir Mon, 20 Feb 2017 12:22:00 +0000 Victoria Oil & Gas plc (LON:VOG) is on the front foot, in terms of its fundamentals, according to Tip TV’s Zak Mir and on a technical basis the share has hit the chartist’s prior target (between 50p and 60p).

Looking again at VOG, Mir now describes the chart as being in a ‘mid-move consolidation’ pattern and he says the price may go significantly higher – his new target is now “towards the 90p area” over the next three months.

]]> Royal Dutch Shell’s share price chart is turning negative - Zak Mir Mon, 20 Feb 2017 12:09:00 +0000 Traders could start thinking about going short of shares in Royal Dutch Shell Plc (LON:RDSB), according to Zak Mir, who highlights a bias that’s ‘slightly downward’.

He points out that the top of the share’s currently positive trend channel is around £24 (would be 10% upside to current price of £21.80) but the support is pitched at £20.61 and momentum is negative.

]]> Everybody is on the Falcon Oil & Gas Plc bandwagon - Zak Mir Mon, 20 Feb 2017 11:33:00 +0000 Chartist Zak Mir takes a closer look at Falcon Oil & Gas Ltd (LON:FOG) after its shares doubled last week.

The Tip TV technical analyst says Falcon is on the front foot, as far as fundamentals are concerned, while the chart points to the share price potentially going higher still.

]]> Nostra Terra calls off a share placing Mon, 20 Feb 2017 08:56:00 +0000 VSA Capital Market Movers - Petra Diamonds Mon, 20 Feb 2017 08:16:00 +0000 Petra Diamonds (LON:PDL)

Petra Diamonds (PDL) interim results were in line with expectations following a soft trading update. The significant increase in revenues, up 48% YoY, was largely due to the timing of sales with production in the period up 24% YoY to 2mncts. PDL is on track for full year production of 4.4-4.6mncts.  Realised price performance was mixed with changes in product mix the key driver. As expected the benefits of processing undiluted ore impacted earnings positively and along with the stronger top line this meant that EBITDA of US$87m was up, 80% YoY. This meant that net income of US$35.2m reversed a loss of US$2.2m in the prior period.

PDL has not yet opted to resume dividend payments. Capex of US$135m represents the majority of spending for FY 2017 which is expected to be lower YoY overall. Net debt, however, increased in the period from US$385m to US$464m.

]]> Lekoil confirms start of continuous oil production in Nigeria Mon, 20 Feb 2017 07:26:00 +0000 Austin Exploration to update on raising Sun, 19 Feb 2017 23:00:00 +0000 Falcon Oil & Gas gives more insights to massive discovery in Australia’s Northern Territory Sat, 18 Feb 2017 12:00:00 +0000 Investors should keep a close eye on 88 Energy’s Icewine well - broker Sat, 18 Feb 2017 12:00:00 +0000 Cenkos sees some 150% upside for Highlands Natural Resources shares Sat, 18 Feb 2017 10:00:00 +0000 Could the anchors now be off Powerhouse Energy's shares after move to repay convertible loan notes Sat, 18 Feb 2017 08:00:00 +0000 Range Energy receives $1.46mln loan from Gulf, Harrington Fri, 17 Feb 2017 19:11:00 +0000 Oil price, Jersey Oil & Gas, EnQuest, Ithaca, Sundry-Bowleven-Solo-Gulfsands-Chariot- And finally... Fri, 17 Feb 2017 10:41:00 +0000 Oil price

The oil price is almost the same as it was last friday, nothing is moving it at the moment almost as if it was the subject of price fixing, à la gold and silver of yore, not any tomfoolery I assure you… This week saw another set of whopping inventory increases which only seem to steady the price, indeed that is a subject worth looking at on its own. Money managers are still incredibly long and yesterday, chat out of Opec was that they are considering extending their pact with non-Opec countries and indeed possibly increasing it. They will need to do just this and then, maybe next year they might be able to make out like bandits. On that subject the only bearish stuff comes from those who worry about US production to whom I would say, dont worry your pretty little heads about it, whatever they can produce isnt enough to move a determined market…

Jersey Oil & Gas

A corporate and operational update today from one of the new members of the bucket list and all appears to be going pretty well. Statoil are close to signing a rig and services contract for the Verbier well expected to be drilled in the North Sea in the summer, JOG are carried up to $25m worth of costs here. Azinor has announced that it intends to drill the newly named ‘Partridge’ (Homer) prospect on farmed-out JOG acreage later this year, success here would trigger payments of $2m for a discovery and another $2m at the time of a successful FDP. Finally JOG are committed to acquiring some producing acreage to balance their portfolio and say that the number of opportunities remains good as a number of sellers have come to the market  recently. JOG is an interesting play and still remains cheap if you bear in mind what might be when the drill bit turns at Verbier. Significant skill will be needed in trading the shares but with the underlying upside so substantial, the risk at JOG is not being involved.


Good news from EnQuest this morning as news from Kraken is that the FPSO has arrived and has been hooked up successfully. With delivery of first oil ontrack for Q2 this year things are beginning to look up for ENQ and it probably deserves a better reception than that given by the market this morning.

Ithaca- Alert, being sold out on the cheap…

Along the same sort of lines, Ithaca has announced that the Stella Field has started up production  albeit some time after the market had expected. Having said that, the news will be exceptionally good for the company as revenues will start to flow and debt can be paid down.

I’m sure that this is what Delek thought when it bid for the company at a modest, nay measly, 11% premium last month. Despite it being the star performer in the 2016 bucket list, as soon as the good times are in sight and meaningful rewards are offered, management and shareholders jump ship at the first sign of men from the east bearing gifts. I would like to think that those in decision making positions whether they be institutional or retail would think twice before selling out like the management have done, after all Ithaca is the original wallet warmer…


Bowleven has issued a long list of counter points following COC’s recent letter to shareholders. Having said my piece earlier I do not intend to do so again, shareholders can make their decisions between now and March 14th.

Solo raised £2m by issuing 400/- shares at 50p, a raise that had been telegraphed for some time but given that the shares have roughly doubled recently one can understand management’s desire to wait!

Gulfsands also appeared with a begging bowl, theirs was to lenders who popped up with £4m. 37.3% came from Waterford, 31.4% from Blake Holdings (Richard Griffiths) and 31% from ME Investments which I think we can have an inspired guess at. I am slowly, very slowly, thinking of taking another look at GPX and am looking forward to a meeting with new MD, John Bell.

And Chariot announced a re-jig of their licences in Morocco ensuring that they retained exposure to the Kenitra permit and its possible upside. With no other commitments, CHAR will run 1,000 square kilometres of seismic which will cost about a third of what it would have been a couple of years ago. With nothing to drill at all this year CHAR has been off the radar screen but the management, who describe themselves as being ‘cautious but not conservative’ deserve credit for staying in the game. With Rabat Deep to drill next year, it may be the time to revisit the watch list.

Finally, following on from the Facon announcement I did a short interview with Proactive, the link is below.

Proactive Investors Stocktube interview: Falcon Oil & Gas has “colossal” potential gas discovery

And finally…

No international rugby this weekend although the IRB are suggesting that the 6 Nations  tournament is played over 5, not 7 weeks.

Last night in the Boropa Cup St Etienne went to the Theatre of Dreams and despite playing some exciting football and sometimes the ref, came away losing 3-0. Spurs went to Gent and lost 1-0 which they shouldn’t have really…

This weekend it is back to the FA Cup where a few of the minnows get their chances. The biggest could be Lincoln City at Burnley or possibly Oxford at ‘Boro but Sutton might fancy their chances against the Gooners on Monday night… Elsewhere the Noisy Neighbours are at Huddersfield, Wolves host Chelski, the Red Devils go to Blackburn, the Foxes go to the Den and there will be a tasty derby as Fulham host Spurs.

]]> Deutsche Bank reiterates 'hold' on Drax after full year results Fri, 17 Feb 2017 10:08:00 +0000 Excitement is building ahead of Aminex and Solo Oil well results Fri, 17 Feb 2017 09:38:00 +0000 VSA Capital Market Movers - Metal Tiger Fri, 17 Feb 2017 09:06:00 +0000 Metal Tiger (LON:MTR)

MOD Resources (MOD AU), which holds a 70/30 JV with Metal Tiger (MTR LN) has announced drill results which indicate further mineralisation at greater depth than the current T3 resource. The additional drilling has been carried out as part of the PFS work. This result confirms our view that there is potential for resource expansion at the T3 project.

Hole 64D indicated new mineralisation at depth below the current zone, this may be the source of a geophysical anomaly known to lie beneath the current resource. The core showed a 75m wide zone at a depth of around 247m. The drill core also shows that the mineralised interval sediments are folded upon themselves, suggesting that the mineralised horizon repeats, at least in some places. As the potential scope of total copper in resource is expanding MOD has mobilised another drill rig to speed up the effort to assess this new discovery. A new deep drill hole, to a depth of 600m, is intended to tes geophysical anomalies south and below the T3 resource. There are, however, no assays reported as yet and it is not yet possible to determine the grade.

We reiterate our Buy recommendation and 5.68p/sh.

]]> Ithaca Energy declares start of production at Stella field Fri, 17 Feb 2017 08:44:00 +0000 Jersey Oil & Gas looks forward to drill of Verbier well Fri, 17 Feb 2017 08:32:00 +0000 BowLeven issues tit-for-tat response to Crown Ocean Fri, 17 Feb 2017 07:38:00 +0000 EnQuest 'Kraken on' as production vessel arrives on site Fri, 17 Feb 2017 07:32:00 +0000 Range Energy enters convertible loan agreements Thu, 16 Feb 2017 21:29:00 +0000 Marindi Metals to continue exploring world-class lithium province Thu, 16 Feb 2017 21:00:00 +0000 Ascent Resources 'moving ahead without delay' towards first gas in Slovenia Thu, 16 Feb 2017 12:46:00 +0000 Colin Hutchinson, chief executive of Ascent Resources Plc (LON:AST) brings Proactive up to speed on the company's push towards first gas in Slovenia - expected around the end of March.

]]> Gulfsands Petroleum secures £4mln cash boost Thu, 16 Feb 2017 08:24:00 +0000 Chariot Oil & Gas expands footprint offshore Morocco Thu, 16 Feb 2017 08:19:00 +0000 88 Energy hires contractor for Icewine-2 well Thu, 16 Feb 2017 08:12:00 +0000 Solo Oil raises funds ahead of well-testing programme Thu, 16 Feb 2017 07:58:00 +0000 Drax's full year earnings hurt by challenging commodity markets Thu, 16 Feb 2017 07:43:00 +0000 Falcon Oil soars 50% after report by Aussie partner points to huge gas potential of its licences Wed, 15 Feb 2017 15:29:00 +0000 Falcon Oil and Gas shares flying as it unveils potential 'colossal' gas discovery Wed, 15 Feb 2017 15:15:00 +0000 'Fundraise is a major turning point in the history of Powerhouse Energy', says Executive Chairman Wed, 15 Feb 2017 14:52:00 +0000 Keith Allaun, executive chairman of Powerhouse Energy Group PLC (LON:PHE) talks to Proactive about the company's £2.5mln raise.

The funds will largely be used to repay the convertible loan note facility with Hillgrove, with the finance house accepting a £2mln offer to buy back the unconverted loan notes.

]]> Lansdowne Oil & Gas relinquishes offshore Ireland licence Wed, 15 Feb 2017 14:42:00 +0000 VSA Capital Market Movers - Eco (Atlantic) Oil & Gas Ltd Wed, 15 Feb 2017 13:57:00 +0000 Eco (Atlantic) Oil & Gas (CVE:EOG) is a junior E&P with licences in highly prospective offshore acreage in Guyana and Namibia. The prize catch on offer lies in the potential of ECO’s 40% working interest in the 1,800km Orinduik Block in Guyana, which is firmed up by ExxonMobil’s (XOM US) world class Liza and Payara discoveries on the adjacent block where recoverable resources are estimated to be up to 1.4Bboe.

In light of these significant discoveries being just a few kilometres updip of Liza, ECO and its partner Tullow Oil (TLW LN) have agreed to enhance the work programme in Guyana with TLW carrying ECO for US$1.25m on the 3D seismic survey. This will refine the targets already identified from the existing 2D seismic, which TLW estimates contain prospective resources of 900mmboe, as well as scoping out new leads. ECO is also unique in that it is currently the only AIM listed oil and gas company with exposure to Guyana.

AIM Listing Raises £5m

As part of its AIM listing ECO has raised £5.09m which will be used to advance ECO’s current work programmes including enhancing the 3D seismic data programme on the Orinduik Block, funding the acquisition of new licences as well as providing general working capital.

Carried For One Well in Namibia

In Namibia ECO has working interests across four blocks with multiple leads and is again partnered by TLW and AziNam amongst others. Whilst in Namibia, ECO is contingently carried by TLW for the full costs of one exploration well on its Cooper Block. TLW and its partners are also due to be drilling on the adjacent PEL 37, once a drillable prospect is identified, which will provide read across for ECO as well as providing a catalyst for exploration in the region.

Recommendation and Target Price

We initiate coverage on ECO with a BUY recommendation and 25p 12 month target price, representing a 41% upside on the current share price. This is in line with our risked NAV using 12% WACC and a US$60/bbl flat long-term oil price.

]]> Oil price, Bowleven, Falcon Oil & Gas, And finally... Wed, 15 Feb 2017 13:24:00 +0000 Oil price

Same old, same old, as the oil price reacts to various stories all well known to market participants. Yesterday was an up day as it seems to be confirmed by almost all sources that cohesion was over 90% in January led by the Saudis. The various reporting bodies are showing that the oversupply will run out around halfway through the year pretty much whatever the US shale does and so providing that 1) Opec and its partners hold tight and 2) roll over the agreement in June all should be ticketty boo.

Money managers took a little moolah off the table last week but their positions are still incredibly long by historic standards. Finally the API stats which came out after the close showed a bigger than expected crude build at 9.9m barrels and disappointingly also saw a build, although very small in gasoline and slightly bigger in distillates. Tonight’s EIA numbers will show more clearly quite how big the inventory situation is.


The company has announced that the circular containing the notice of the General Meeting has been posted along with the resolutions proposed by the activist shareholder Crown Ocean Capital. Their proposals include sacking most of the board and returning ‘excess’ capital to the shareholders, at least Dick Turpin had the decency to wear a mask…

Unsurprisingly the board have urged shareholders to reject these proposals, in my view for the waste of the company’s time and money that they are. I have never seen this lot around the oil and gas sector before and it looks pretty much like a bunch of ne’er-do-well’s on the make but they have bought a substantial stake and are entitled to try and shake things up. Having said that the 16% holding that they have must be pretty close to any cash gains they must hope to make, bringing a touch more beta to the process than they are probably comfortable with.

I have commented a number of times in the last year or two about the fact that the situation in Cameroon has been far from perfect, but in most cases it hasn’t been BLVN’s fault and that shareholders have been well served by the farm-out that they negotiated. I would also suggest that a combination of unexplained delay by the operator, NewAge, and long and drawn out discussions about the offtake have delayed the Etinde project unnecessarily. It is quite ironic therefore that just when it seems that a solution, or solutions are much closer to being ironed out that an enemy appears at the gate. Another suggestion as I understand it, is to concentrate totally on Etinde at the expense of Bomono, (which I understand is close to farm-out anyway) although that is pretty much what the board are doing anyway, equally,  the company has made it clear that they continue to screen projects and opportunities on a daily basis. Having got this far I do not believe that it is in the interests of anyone but the marauding shareholders, who have already made a few quid as a result of this, but to support the management, as another author once said ‘nothing good can come of this’.

Falcon Oil & Gas

Origin has pretty much confirmed that the results of the extended production test on the Amungee NW-1 indicate the discovery of a ‘material gas resource’ in the area. This significant discovery is from the Middle Velkerri B shale formation and amounts to at least  2C resources of 6.6 TCF not including other shale formations. The OGIP number of 496 TCF of gas over the 16,000 km² seems huge even using the company’s 16% recovery rate and would not only be as material as but analogous to the Marcellus and Barnett shales in the USA.

The bad news of course remains that the Northern Territories Government have a moratorium on fraccing in the area and so nothing can happen for a while. Initially the worry was that this might take the whole duration of the term of the Chief Minister but now it seems that we might get an interim report by ‘mid summer’. If this gave shareholders any sort of indication that the moratorium might be lifted then the game changes completely. My own feeling is that if work was carried out away from the few densely populated parts of the area and that it would be carried out in a safe and highly regulated manner then it would likely be more than a 50:50 chance of success, after all this is so big that it makes a difference to the whole country, and of course their taxes…Those who are prepared to play the long game will, I suspect, be amply rewarded.

And my Vox Markets podcast from Monday is below…


And finally…

Last night saw PSG demolish Barca 4-0 in the Champions League, the second leg may or may not be fun to watch… The Gooners are at Bayern Munich tonight…

And Outlander was given top weight by the handicapper yesterday and was promptly withdrawn from the race by trainer Gordon Elliott…

]]> Davy analyst on Falcon Oil & Gas's Beetaloo Basin report Wed, 15 Feb 2017 12:45:00 +0000 Davy analyst Job Langbroek talks us through news today from  Toronto and London listed oiler Falcon Oil & Gas (LON:FOG, CVE:FO) and its Beetaloo Basin acreage.
Running through the detail of what is a technically recoverable resource statement from the firm's partner Origin Energy, Langbroek also considers the perceived shortage coming to Australia's domestic gas market.

]]> Falcon Oil & Gas has "colossal" potential gas discovery, says Wood Wed, 15 Feb 2017 12:40:00 +0000 "This is a colossal, monumental even, potential discovery," says oil analyst Malcolm Graham Wood, referring to the Falcon Oil & Gas (LON:FOG, CVE:FO) Northern Territory news today.
In a report, Origin Energy, its partner and operator of 16,000-square kilometres of licences, put the gross best estimate of gas in place at a world-class 496 trillion cubic feet (TCF).
Converting that to oil equivalent, it stacks up to 82bn barrels.
"Whichever number you look at, it's very substantial indeed," said Graham Wood.

]]> Scale of Falcon Oil & Gas's resource far bigger than expected, says WH Ireland Wed, 15 Feb 2017 11:36:00 +0000 Falcon Oil & Gas's O'Quigley very excited about Beetaloo Basin Wed, 15 Feb 2017 11:07:00 +0000 Falcon Oil & Gas boss 'more than pleased' with Beetaloo Basin gas in place report Wed, 15 Feb 2017 10:45:00 +0000 Philip O'Quigley, the chief executive of Falcon Oil & Gas (LON:FOG, CVE:FO), described himself as "more than pleased" with the report submitted by partner Origin Energy on its shale acreage in the Beetaloo Basin in the Northern Territory, Australia.
It put a gross best estimate of gas in place at a world-class 496 trillion cubic feet - or up to 82bn barrels of oil equivalent - for the Velkerri B shale horizon.
But as O'Quigley points out that's just one horizon at Beetaloo. There are also the A and C horizons.
"So there's a lot more to go after but at a starting point of 496 trillion cubic feet  (TCF) just for the middle  Velkerri  it's a pretty good place to start."

]]> Powerhouse Energy raises funds; pays off loan note facility Wed, 15 Feb 2017 09:17:00 +0000 Gulfsands awarded Moroccan licence extension Wed, 15 Feb 2017 07:38:00 +0000 VSA Capital Market Movers - Millennial Lithium, Acacia Mining Tue, 14 Feb 2017 08:44:00 +0000 Millennial Lithium (TSX:ML)

Iain Scarr has been promoted from VP of Development and Exploration to Chief Operating Officer of Millennial Lithium.

We reiterate our Speculative Buy recommendation.

Acacia Mining (LON:ACA)

Acacia Mining (LON:ACA) has announced strong results for the full year 2016. Gold production of 830koz was up 13% YoY while gold prices averaged 7% higher YoY meaning revenues of US$1.05bn were up 21% YoY. The stronger top line alongside significant cash cost reduction resulted in EBITDA of US$415m, up 137% YoY. Operating cash costs of US$640/oz were down 17% YoY whilst on an AISC basis at US$958/oz they were 14% lower. This was despite a modest increase in capex of 7% YoY to US$196mn.

ACA significantly increased its dividend up from 4.2 cents per share in 2015 to 10.4 cents per share in 2016 after a final dividend of 8.4 cents per share. Net cash of US$218mn was up more than double from US$105m as a result of the strong performance.

]]> IOT Group shares rise on imminent launch of selfie drone in the U.S. Mon, 13 Feb 2017 23:30:00 +0000 Oklo Resources gains a new substantial holder from on-market buying Mon, 13 Feb 2017 22:30:00 +0000 Greenland Minerals and Energy's substantial holder lifts stake as shares rally Mon, 13 Feb 2017 22:30:00 +0000 Trending: Oil price recession continues, but small caps lap up tax pledges Mon, 13 Feb 2017 20:28:00 +0000 Premier Holding gets go-ahead for power supplier buy Mon, 13 Feb 2017 14:19:00 +0000 LGO Energy is looking up with fresh catalysts coming in 2017 Mon, 13 Feb 2017 13:30:00 +0000 Oil price, Genel, Ophir, Sundry-Sound Energy-Ascent- And finally... Mon, 13 Feb 2017 13:01:00 +0000 Oil price

As if proof were ever needed that crude is trading in a narrow range last week WTI was up 3 cents on the week while Brent was down a whopping 11 cents. The end of the week was best for the bulls as the IEA added to other reporters in assessing the adherence to the quotas as being over 90%. Later today we will see the Opec numbers which might just bear those numbers out. Not much else is around, the rig count was up 12 to 741 overall and the oil number was up 8 to 591, nothing special but it will keep rising and there is little to worry about but I am looking forward to the 2nd March when Hunting comment on the market place.


The company has announced that the PSC’s and the GLA’s for the Miran and Bina Bawi gas fields that were announced in 2015 have been completed. The company say that now ‘progress on the large scale, low cost onshore gas fields’ can begin  which will need midstream gas processing facilities and a pipeline to be installed under the KRG/Turkey agreement made some time ago. It seems like a very long time ago that I first saw the slides at a Genel presentation but have to assume that it is still good news…


I dropped by to see Ophir recently, Bill Higgs had sent me a note following the Schlumberger deal at Fortuna and it was clear that I  hadnt processed it very well in the blog and I needed a bit of education. It turns out that we werent actually very far apart, I hadnt quite got to grips with the integrated value chain or the floor and ceiling protection but was right in thinking that OPHR could draw down on the 33.8% of Fortuna if they needed to. Whether this will be necessary or not is at present unclear, ultimately the project should be the ‘substantial’ provider of free cash flow for the business but first get through to 2020. Capex is capped at $150m and there is $350m of cash, (net $165m) in the balance sheet but there are also commitment wells and other prospects in the portfolio which will need to be looked at. Current commitments are around $90m of which the Cote D’Ivoire well takes $30m and interesting prospects in Gabon, Mexico and in Indonesia with  Statoil in the longer term.

There is a clear ethos at Ophir to play ‘within our means’ and keep a clear line of sight through to 2020 which is admirable given my earlier skepticism about raiding the Fortuna pot but will be interesting to see if it can be done. Having said that, in order to maintain a balanced portfolio and take advantage of upgrading extending existing assets efficiently nothing can or should be ruled out. The asset base is strong with 2P assets of 54.4m boe and powerful 2C resources behind it and unless one of the big oil prospects comes in Ophir will remain a gas play for the longer term. Flexibility is a touch tight at the moment but the Fortuna pot could help, although best not used as a regular ‘well’ to tap whenever the exploration department comes up with a particularly good wheeze. Definitely one for the watch list even after the bounce in the last quarter.


Sound Energy has announced the early redemption of a loan of £1m which carries a 10% coupon and matures in July 2017. This will involve the exercise of 9.6m warrants  and obviously some minor dilution.

Ascent Resources has confirmed that the raise announce last week has completed, just under £3m has been raised through PrimaryBid at 1.85p per share.


And finally…

In the shock of the decade Joe Root has been named England cricket captain with Ben Stokes as his vice captain.

In the Premiership at the weekend the HubCap Stealers beat lacklustre Spurs whilst Chelski could only draw against Burnley. With the Gooners beating Hull City Tigers and the Red Devils seeing off the Hornets the Noisy Neighbours need a win at the Cherries tonight.

And what a Six Nations weekend, after Ireland put 60 on Italy in Rome the Principality Stadium saw a great display of rugby which saw England come from behind to beat Wales. Yesterday afternoon another good match saw France slip by Scotland who might have thought they had enough for Les Blues, on this occasion in white and orange…

]]> Plastics Capital says full-year profits “remain on track to meet market expectations” Mon, 13 Feb 2017 08:45:00 +0000 VSA Capital Market Movers - Sula Iron and Gold PLC Mon, 13 Feb 2017 08:23:00 +0000 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced that two diamond drill rigs for its upcoming drill programme on the Ferensola gold project in Sierra Leone were unloaded at the port in Freetown on 10th February. The original programme had envisaged a single drill covering 2,400m, however, the second drill has been provided at no additional cost to SULA meaning that the results of the programme should be received faster than planned. Furthermore, since Equity Drilling are taking a portion of payment in SULA common shares the cash freed up can be used to fund the programme beyond the original 2,400m plan.

Drilling will be carried out on the Sanama Hill target, where drilling previously backed up historical data, as well as on the significantly larger Eastern Target which was highlighted by the recent IP survey.

We reiterate our 1.7p/sh. target price and Speculative Buy recommendation.

]]> VSA Morning Agri Comment Mon, 13 Feb 2017 08:21:00 +0000 AAAP#Secures New Supply Contract

Anglo African Agriculture plc (LON:AAAP), the London-listed food manufacturing and processing company with operations in Cape Town, South Africa, has announced a significant contract win.

AAAP will supply up to 300t of speciality spices to an unnamed South African food manufacturer through CY 2017

Order subject to supply chain volumes from the purchaser

VSA Comment

In FY 2017 AAAP sold c1,100t of product through its wholly owned spice manufacturing business Dynamic Intertrade. This latest contract provides a significant proportion of the volumes needed for AAAP to exceed this figure in FY 2017.

As previously announced, AAAP is currently undergoing a number of expansion initiatives to expand its production capacity to 250t per month, which should be complete by the end of February.

The contract win highlights the continued progress at AAAP, following the installation of new senior management at the end of last year.

]]> Nu-Oil & Gas moves closer to divesting Canada asset Mon, 13 Feb 2017 08:12:00 +0000 LGO Energy re-starts drilling in Trinidad Mon, 13 Feb 2017 07:49:00 +0000 Greenpower Energy to reveal update on fertiliser project Mon, 13 Feb 2017 01:30:00 +0000 Oklo Resources chairman Michael Fotios snaps up shares on-market Sun, 12 Feb 2017 23:00:00 +0000 Premier Holding Corp signs with Sustainability Partners Fri, 10 Feb 2017 18:54:00 +0000 OPEC ROUNDUP: Encouragement there for oil producers, although volatility will remain a theme Fri, 10 Feb 2017 12:18:00 +0000 Oil price, Faroe, And finally... Fri, 10 Feb 2017 09:31:00 +0000 Oil price

The oil price is marginally down on the week but little has happened, the inventory figures may have signalled panic but were rescued by the gasoline draw helped by lower refinery runs but better signs of growth in the economy. A very slight thaw in the Donald’s attitude towards China is detected but dont bet the house on it.

Company news has been very thin this week which is good as I have had a load of company meetings which you will see being written up during next week.

Faroe Petroleum

An operations update from Faroe today and as expected all is going well. Production is down but as expected due to Njord and Hyme outage and a small time at Trym where Harald takes priority on lifts. Opex is $24 which is good but will rise this year due to the lower production, reserves are up, 2P is now 81.3 mboe. At ODA all kit is ordered, taking advantage of current low costs and at Tambar we can expect up to 5 wells on site by 2018. The new APA licence awards give a pleasing mixture of near and longer term as well as higher and lower risk and reward.

Financially, they have £97m of cash and with the new RBL and EFF arrangements with ten banks new and old, undrawn and leaving them with all options covered. Being in such a strong position means that the company can look for further acquisition opportunities and the company point out that they are full of ambition and keen to accelerate the pace of growth. So, everything in the garden is rosy and management and shareholders can sleep easily at night, or can they? Delek Group holds 20% of the shares and having just got a recommended offer through on the cheap from Ithaca I hope that should the same thing happen here management wouldnt surrender with as little determination as did the Ithaca board. FPM remains right up there as one of the best in the sector, with exceptional management, a strong balance sheet with scope, and a cracking portfolio at all stages of the cycle, lets hope it can remain independent and of course, go Dazzler!

And finally…

Back to the 6 Nations where it’s Italy v Ireland and Wales v England tomorrow and France v Scotland on Sunday. Wales will want to reproduce their best form and hope that England play like last week, the other matches should speak for themselves.

In the Prem there is only one standout fixture, the HubCap Stealers host Spurs and must win I assume. Elsewhere the Gooners host the Hull City Tigers and the Red Devils entertain the Hornets whilst Chelski go to Burnley and the Noisy Neighbours go to the Cherries.

]]> US Oil & Gas says consultant has update its oil in place estimates for Nevada project Fri, 10 Feb 2017 08:25:00 +0000 Faroe Petroleum reiterates production target and says it is on hunt for more acquisitions after transformational year Fri, 10 Feb 2017 07:57:00 +0000 IOT Group to reveal agreement in North America Fri, 10 Feb 2017 03:30:00 +0000 HRL Holdings to reveal acquisition Thu, 09 Feb 2017 23:00:00 +0000 Range's Shewashan produced 877,000 bbl oil in 2016 Thu, 09 Feb 2017 19:09:00 +0000 Eco (Atlantic) Oil & Gas offers investors a unique proposition, says CEO Gil Holzman Thu, 09 Feb 2017 12:28:00 +0000 Eco (Atlantic) Oil & Gas, chief executive Gil Holzman spoke to Proactive on the day the Canadian oil explorer, listed on London's AIM market.

Raising £4.8mln, the cash will be used to help finance a drilling campaign offshore Guyana with partner Tullow Oil.

]]> LGO Energy's Neil Ritson 'hoping to move quickly' to re-establish Spanish production Thu, 09 Feb 2017 11:52:00 +0000 LGO Energy PLC (LON:LGO) executive chairman Neil Ritson talks to Proactive about the company's intention to re-apply for the production licence at the Ayoluengo Field in northern Spain.

The field was operated by its subsidiary Compañía Petrolífera de Sedano (CPS) until the termination of La Lora Concession on 31 January.

]]> Gulf Keystone receives further US$15mln payment for export sales from the Shaikan oil field Thu, 09 Feb 2017 10:59:00 +0000 VSA Capital Market Movers - Metal Tiger Thu, 09 Feb 2017 08:16:00 +0000 Metal Tiger (LON:MTR)

Metal Tiger (MTR LN) announced yesterday that it has exercised 29.2mn warrants at AUD0.01/sh. for 29.2mn shares in MOD Resources (MOD AU) at a cost of AUD292k (£179k). MOD and MTR hold a 70/30 JV on the T3 copper project in Botswana. The funds arising from the exercise will be used in the development of this project where the focus is on completing a PFS. We note that the exercise of the warrants increases MTR’s holding in MOD’s issued shares to 5.01% which is notifiable on the ASX. 

We reiterate our Buy recommendation and target price of 5.68p/sh.

]]> LGO Energy to re-apply for Spanish production licence Thu, 09 Feb 2017 08:01:00 +0000 Austin Exploration unveils maiden oil and gas reserve at Pathfinder Thu, 09 Feb 2017 03:00:00 +0000 Success at TE-8 'will really prove up a significant size' at Tendrara for Sound Energy, says analyst Wed, 08 Feb 2017 15:58:00 +0000 Cantor Fitzgerald's Oil & Gas analyst Sam Wahab talks to Proactive about Sound Energy PLC's (LON:SOU) impending drill programme on the TE-8 gas project.

The company has confirmed the mobilisation of the Saipem rig that will be used for the programme.

Ground works at the TE-8 location are now complete, the rig is moving from the TE-7 site, and it is expected to ‘rig up’ by mid-February.

]]> COPL will focus on exciting Noa project - Shard Capital Wed, 08 Feb 2017 13:27:00 +0000 BP getting the balance about right, Credit Suisse believes Wed, 08 Feb 2017 10:33:00 +0000 BP in a ‘buy trend’, but beware if it does this Wed, 08 Feb 2017 10:00:00 +0000 Technical analyst Zak Mir tips the BP PLC (LON:BP.) share price to bounce back again after a recent slide, although there are a couple of potential warning signs for the stock which he highlights.

“We’ve been in a rising channel since the beginning of last year and currently teetering on the brink of support at around 455p,” Mir tells the Proactive Investors Bulletin Board.

“While we’re above the 200-day moving average at 440p one would regard the stock as being in a buy trend and capable of retesting the best levels of the year around 520p

“Otherwise, a break of 440p and the 200-day line could be bearish.”

]]> Nu-Oil and Gas a volatile play, but you could double your money Wed, 08 Feb 2017 09:45:00 +0000 Nu-Oil and Gas PLC (LON:NUOG) is a “very volatile play” according to Zak Mir, but if you’re brave enough to take the plunge you could almost double your money over the next few months.

In the latest segment of the Proactive Investors Bulletin Board, the analyst explains: “It’s a very volatile play and the chart reflects that.

“We had the move in October last year and since then we’ve seen consolidation at and just below the 50-day moving average at 0.45p.

“Really, while we’re above the 0.4p zone the chances are of a retest of the best levels of October towards 1p over the next few months.”

]]> VSA Capital Market Movers - Rio Tinto, Tullow Oil plc, Eco (Atlantic) Oil & Gas Ltd Wed, 08 Feb 2017 08:38:00 +0000 Rio Tinto (LON:RIO)

Rio Tinto (LON:RIO) has announced robust full year results for 2016. Revenues were down 3% YoY to US$33.8bn, however, EBITDA was up 7% YoY to US$13.5bn and net income of US$4.6bn reversed a loss of US$0.9bn in 2016. Segment performance was mixed with iron ore and energy and minerals performing strongly offset by weakness in aluminium, copper and diamonds. Annual production for iron ore was up 4% YoY and with the benefit of stronger prices EBITDA was up 11% to US$8.5bn. Although oil production was weaker YoY the rebound in prices drove a significant recovery in segment earnings and EBITDA was up 46% YoY to US$1.8bn. Copper and diamonds segment earnings were, however, weaker with EBITDA down 24% to US$1.4bn owing largely to weakness in commodity prices. The aluminium division also suffered due to weaker aluminium premia, offsetting strong production increases and EBITDA was down 10% YoY to US$2.5bn.

RIO have also declared a final dividend of US$1.25/sh. meaning a full year dividend of US$1.70/sh or US$3.1bn, down 21% YoY. This is alongside a share buyback programme of US$0.5bn to be carried out during 2017.

Tullow Oil (LON:TLW)

Tullow Oil (TLW) announced its results for the year ended 31 December 2016 this morning. FY working interest production was 67.1kboepd (-9% YoY), in-line with recent guidance. However, including the impact of insured barrels from the Jubilee field this increases to 71.7kboepd. With the TEN development coming on-line in August 2016 TLW’s production is now expected to increase to 78-85kboepd in 2017. Revenue was US$1.3bn (-21% YoY) and net debt at a significant US$4.8bn (+19%).

TLW’s balance sheet remains under pressure with gearing standing at 5.1x. 2016 capex was US$0.9bn (-47% YoY) and TLW plans to reduce this further in 2017 to US$0.5bn. Which includes US$125m to be offset by the completion of the farm out for 21.57% of the Lake Alberta project to Total (FP FP) for US$900m. However, only US$100m of this deal will be received upfront so it will not provide significant deleveraging of its balance sheet in the short term.

Whilst TLW was free cash flow positive in Q4 2016 after TEN first oil, we anticipate that it may farm-out more of its assets to allow it to deleverage quicker. We are cautious over the stock whilst the net debt remains at such levels.

Eco Atlantic (LON:ECO)

Eco (Atlantic) Oil & Gas (ECO)# an oil and gas company with highly prospective exploration licences offshore Guyana and Namibia was admitted to trading on AIM today. As part of the listing it raised £5.09 million before expenses by placing 31,781,250 new Common Shares.

]]> Bowleven tells investors to say no to activist shareholder Wed, 08 Feb 2017 08:37:00 +0000 Eco (Atlantic) Oil & Gas makes premium London debut Wed, 08 Feb 2017 08:29:00 +0000 Cost conscious Tullow Oil takes the axe to capital investment programme Wed, 08 Feb 2017 08:05:00 +0000 Range Resources to complete US$20mln loan note issue Wed, 08 Feb 2017 07:24:00 +0000 Sound Energy contractor receives shares for work on Italy exploration well Wed, 08 Feb 2017 07:24:00 +0000 Sacgasco adds new wells to its Sacramento Basin portfolio Tue, 07 Feb 2017 22:30:00 +0000 Premier’s deregulated sales engine sees Call Center Sales record growth Tue, 07 Feb 2017 18:40:00 +0000 Hurricane Energy says estimates of the Lancaster field are too conservative, so just how big is the West of Shetland discovery? Tue, 07 Feb 2017 14:57:00 +0000 Not buoyed by the Black Stuff: Five reasons to consider selling shares in oil giant BP Tue, 07 Feb 2017 14:50:00 +0000 Oil price, Hurricane Rockhopper, And finally... Tue, 07 Feb 2017 09:44:00 +0000 Oil price

Very little to report, traders citing a quiet day at the bourse. The usual anti-Iran rhetoric from the USA and reports of building production domestically so no change there. Money managers continue to increase their skin in the oil price game.

Hurricane Energy

Further good new from HUR this morning which primarily validates mine and others view that the oil in place number previously reported by the company will be significantly enhanced by the upcoming CPR. The company report that further evaluation of wells 7 and 7z reinforce the view that the field is ‘substantial’ and that previous estimates are ‘conservative’ and the CPR will deliver a ‘material uplift’. Further good news is provided by the fact that the Brynhild fault separates the Lincoln/Warwick single accumulation from Lancaster and Halifax where of course there is a well drilling at present. I remain extremely confident that the CPR ahead of the FID will deliver excellent results and that the company has north of a billion barrels across its acreage, more after I have spoken to Dr Trice…

Rockhopper Exploration

The company has issued an operational and corporate update this morning with progress being made across the board. At Sea Lion the FEED process continues to make good progress with the technical phase being concluded. There will now be a shift to commercial, fiscal and financing elements. The Premier announcement recently has ‘significantly enhanced’ the discussions around the Sea Lion financing. At Abu Sennan there is imminent drilling of and exploration and a development well with the intention of adding additional reserves. The company has waived the right to pre-emption and is worth noting that the recent Kuwait Energy deal was done at highly attractive terms to those on which RKH entered on. The year end cash was $80m and with post year end costs will be around $60-65m adjusted, in line with guidance. 2017 development, exploration and abandonment costs are expected to be in the order of $13m some of which they may get back after arbitration. I am waiting to speak to the company so may add more in next day or two as appropriate.

And finally…

Very little on the sporting front today but I am always impressed by the wit of followers of the blog on Twitter. Yesterday after the unnecessary  intervention of the Speaker of the House of Commons into the Trump debate I received a Tweet saying, all is not lost regarding the Donald in the Chamber, imagine his surprise when he Googles ‘Burcow wife’….

]]> VSA Capital Market Movers - Egdon Resources Plc Tue, 07 Feb 2017 08:31:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR)# has provided an update on its plans at the Wressle oil field having had planning permission refused for production at the site by North Lincolnshire Council’s Planning Committee on 11 January, going against previous planning guidance. As anticipated EDR will now submit a formal appeal against the ruling at the earliest possible opportunity.

Also as expected, EDR has lowered its average production guidance for the year ending 31 July 2017 from 165boepd to 100-110boepd, reflecting the initial refusal. EDR will now take the opportunity to submit a new planning application along with the appeal for the development to address specific concerns outlined by the council.

In our model we assume EDR’s appeal will be successful but the delay has pushed out our expected cash flows for the well by one year, with the Wressle income and associated capex now occurring in FY 2018. However, this does not impact on our NAV and we maintain our BUY recommendation and 34p TP.

]]> Victoria Oil & Gas chairman runs through the 'good start' to 2017 Mon, 06 Feb 2017 14:58:00 +0000 Kevin Foo, the chairman of Cameroon focused Victoria Oil & Gas plc (LON:VOG), said he was very "happy" with the way 2017 has started.
In January the firm averaged around 14.5 mmscfd (million standard cubic feet per day) of sales peaking at 17 mmscfd in the month.
"It was a good start," he told Proactive's Andrew Scott.
It comes as the new extension to the Bonaberi pipeline came on-stream and three new customers began taking gas in December, adding around 500,000 scf/d in production.

]]> Oil price, Ithaca Energy, Aminex/Solo, Europa/Angus, Velocys, And finally... Mon, 06 Feb 2017 12:57:00 +0000 Oil price

Marginally up last week but creeping in the right direction aided by the Iranians doing a missile test that was probably ill advised for such a peace loving nation…The Donald responded as you might expect but he cannot do much about the international sanctions, yet. The EIA said that US production might be up 110/- b/d this year, hardly the terror scenario that the oil bears are preaching. Having said that, the Baker Hughes rig count showed an increase of 17 units overall to 729, oil was up 17 to 583 units and the jobs data showed a growing if not booming economy.

Ithaca Energy- Giving it all away…..

Ithaca has announced an agreed cash offer worth 120p from Delek Group which is a 19.7% shareholder and which puts an enterprise value on IAE of $1.24bn. This bid which is only an 11% premium to the Friday share price, is highly opportunistic, coming as it does only days before the FPF-1 comes on stream at Stella and which will transform the economics of the company. There is no doubt that looking at current analysts’ values of the company the bid might be considered full, but I would contend that those values would have changed significantly in this landmark year and looking forward the bid will look parsimonious in the extreme.

Ithaca has a fine portfolio of assets and a number of these will be proved to be especially valuable to Delek if the deal goes through. Whilst not certain of course, the economics of the sector are beginning to look as bright as they have done for a long time and with industry costs still falling and the oil price creeping up valuations are more subject than ever. Shareholders who are probably delighted with this bid, dont get me wrong, may be about to miss out on the ride of their lives as IAE start up at Stella, raise revenue, pay down debt, all bringing the rating down, and miss taking advantage of what is one of the best managements in the sector.

Having spoken to the management I fully understand that they have the best insight into the risk profile and the potential value of the company going forward and could not in all honestly not put this offer to shareholders with their recommendation. I am also assured that no discussions have taken place about job security and that includes whether the IAE executives are to be kept on should the rumours be true about Delek listing an oil vehicle in London. It should be noted that they also own 20% of Faroe Petroleum another premium North Sea player, maybe following this and the recent Chrysaor deal means that the consolidation of the sector is finally under way. That will be fine as long as long as opportunistic bids are not accepted just as the promised land is under foot and patient shareholders rewards are within tantalising reach. It would certainly not do if an uber cautious board delivered one the sectors finest companies into hostile hands on the cheap and without appropriate vision.


The company has announced that the Ntorya-2 well has successfully found a gross gas bearing reservoir unit of approximately 51m and net pay of 25-30m, well ahead of pre-drill expectations. The company is doing flow tests now which should be complete by the end of the month. Given that the first well flowed at 20 million cubic feet a day with some condensate, there must be a reasonable chance that this is bigger than that. If this turns into a proper gas field as one can almost say it is, it is only 40km to the Madimba gas processing plant and the natural gas pipeline system. Aminex and Solo shareholders can look forward to the Ntorya field after a long and very patient wait…


EOG has farmed-out 12.5% of PEDL 143 which includes the Holmwood prospect to Angus Energy, who will pay for 25% of exploration costs with a cap of £3.2m plus other costs. Following various transactions EOG will keep 20% and Angus gets an entry into an area it is very familiar with.


Velocys has announced that the first Fischer-Tropsch product has been successfully produced at Envia Energy’s plant in Oklahoma City. I will write further on Velocys later as I have a meeting with the CEO tomorrow.

Sound Energy

A link below to a Proactive interview I did last week following the announcement of the independent basin model.

Proactiveinvestors Stocktube interview: Sound Energy PLC’s “mind blowing” upside in Morocco

And finally…

Where does one start? I suppose with a new name to conjure with, Denis Shapolov the 17 year old Canadian tennis player who has earned new shame by being disqualified from the Davis Cup after hitting the umpire in the eye with a ball designated as for row z. It was the deciding rubber so team GB go through to play France.

In the Super Bowl it was the best ever fight back and first into extra time as the Patriots came back from 28-3 to win with you-know-who being MVP…

The 6 Nations rugby was first rate, Scotland started with a much deserved win over Ireland although Murrayfield held its collective breath as the tide of green looked like clawing back the deficit. England were not on song but crept over the line and in Rome, as ever, Italy started well but were rolled by Wales  in the end.

In the Prem Chelski were just too good for the Gooners, winning 3-1 whilst the HubCap Stealers lost 2-0 at Hull City Tigers. Jesus saved City with a winner in overtime and the Foxes are looking extremely vulnerable going down 0-3 to the Red Devils, without a fight.

Finally Alastair Cook has resigned as England cricket Captain which is a terrible shame but I suppose gives Rooooooooooooooot a run through a busy year which ends with the Ashes. I wish him well and hope he stays on at No1.

]]> Aminex's Ntorya-2 appraisal well result is "major step forward", says Graham Wood Mon, 06 Feb 2017 12:44:00 +0000 Malcolm Graham Wood, oil and gas expert, mulls over the news from Aminex plc (LON:AEX) and Solo Oil PLC (LON:SOLO) on the Ntorya-2 appraisal well in Tanzania, which he says is a "major step forward".
Ntorya-2 was sunk to 2,750 metres and hit 51 metres of gross gas bearing reservoir, with net pay interpreted to be between 25 and 30 metres.
"I think this is a major step forward to a decent gas field being discovered ," said Wood, who added that the result looked "quite a bit better than the first well".
"I think this is  a fair bit better than they were expecting," he added.

]]> Ithaca Energy Inc bid "way too cheap", reckons oil analyst Mon, 06 Feb 2017 12:37:00 +0000 Ithaca Energy Inc's (LON:IAE, TSE:IAE) agreed takeover offer by 19% shareholder and Israeli group Delek Group looks "way to cheap", reckons oil analyst Malcolm Graham Wood, speaking to Proactive.
Delek proposes to buy Ithaca for 120p per share, Friday’s closing price was 107.75p.
Wood says the offer is an 11% premium to the close last week.
He says Ithaca has worked hard over the last two to three years to build a strong position in the North Sea and its Stella field, where it's operator, is about to come on stream, which will produce decent revenue, reduce debt, leaving it in a strong position.
"I think the North Sea is becoming a very exciting place," he added

]]> Europa's latest farm out deal 'the gold standard' says CEO Hugh Mackay Mon, 06 Feb 2017 09:07:00 +0000 Europa OiI and Gas PLC (LON:EOG) chief executive Hugh Mackay speaks to Proactive about the company's wholly owned subsidiary signing a Farm Out Agreement in relation to a 12.5% interest in the PEDL143 license in the Weald Basin with a subsidiary of Angus Energy.

''We're very excited about the Holmwood Prospect - we've now got UKOG [UK Oil & Gas Investments Plc] as a partner and they're a part of the Horse Hill / Gatwick Gusher discovery which is a very exciting onshore discovery, that's 12 kms to the east - and 5 kms to the north of Holmwood is Brockham Oil Field. Angus operate that''.

Mackay adds: ''For investors they should be encouraged that two companies with detailed technical insight and commercial insight in that Weald basin … have chosen to farm in with PEDL143 and to fund drilling the Holmwood prospect''.

''Personally, I'm very confident we're going to find oil'', Mackay tells Andrew Scott.

]]> VSA Capital Market Movers - Goldplat and Rangold Resources Mon, 06 Feb 2017 08:29:00 +0000 Goldplat (LON:GDP)

Goldplat has announced the successful commissioning of its Stage One processing facility at its Kilimapesa mine in Kenya. Although in line with our expectations this news confirms that the turnaround at the mine, which has resulted in significant losses in recent period is well underway. The plant has a design capacity of 200tpd and stage one represents the commissioning of the plant whilst stage two includes the installation of the crusher circuit and three leach tanks and stage three is the installation of a second mill and three further leach tanks.

A stockpile of 6kt of crushed ore was created to enable the plant to operate whilst stage two is completed. At the current rate, GDP has guided to gold production of 4,600oz in FY 2017 which is marginally above our estimate of 4,500oz and up from 2,005oz in FY 2016. In line with GDP’s guidance we anticipate that Kilimapesa is likely to reverse operating losses in FY 2017 which would strongly benefit the results of the wider group.

We reiterate our Buy recommendation and 11.2p/sh. target price.

Randgold Resources (LON:RRS)
Randgold Resources has delivered robust operational results for 2016 although the significant announcement is the dividend increase to US$1/sh., up 52% YoY. Group production of 1.25mnoz up 3% YoY was in line with guidance while total cash costs were down 6% YoY to US$639/oz.

As a result of stronger production and a recovery in the gold price revenue of US$1.55bn was up 11% YoY. Given stronger revenues and a reduction in cash costs, profit from mining activity was also up strongly by 31% YoY to US$752mn. RRS long term plan indicates that production is due to rise further in 2018 alongside declining unit costs.

]]> Solo Oil's Ntorya has the potential to 'change Tanzania' says Lenigas Mon, 06 Feb 2017 08:05:00 +0000 Entrepreneur David Lenigas tells Proactive: ''The really big impact one is this thing they're [Solo Oil PLC (LON:SOLO)] doing at the moment down at Ntorya''.

''They're talking 4-5 trillion cubic feet of gas in place - that changes a country''.

Lenigas also discusses LGO Energy [LGO Energy PLC (LON:LGO)] telling Andrew Scott: ''Trinidad - 80% of its economy relies on the hydrocarbon business, so Trinidad needs companies like LGO Energy to get in there and get producing''.

]]> Oil price, Victoria Oil & Gas, Premier Oil, Sound Energy, Diversified Gas & Oil, And finally... Fri, 03 Feb 2017 11:56:00 +0000 Oil price

Yesterday was another up and down day, Brent traded above $57 for some of the time helped by comments from the Russian Oil Minister saying that they were cutting over and above their pact number whilst the Donald poked Iran. On the negative side, Buzzard returned after its unscheduled downtime and Brazil noted higher than expected production.

Victoria Oil & Gas

VOG was one of the first stocks that went into this year’s bucket list and today’s 4Q operational update shows just why. The company note increasing gas production, the 4th quarter was 7.64 mmscf/d against 7.14 for the comparable quarter whilst gas sales were up 4.5%. For the year, Logbaba gas sales were up 24% to 3,566 mmscf (2.868) and both Logbaba wells are progressing well albeit with some challenges. To combat the high pressure/high temperature wells, the company is using state of the art kit including Managed Pressure Drilling and Downhole Deployment Valves, the latter for the first time in sub-Saharan Africa. These additions to the well should ensure that they are of higher quality and reduce failure risk although they will add modestly to the cost of the wells.

We knew that 15km of pipe had been laid in the Bonaberi extension and this now gets to the key Western Extension hub and three new customers took gas in Q4 with more to come especially with the dry season upon us. The financials record Q4 revenue of$4.6m, $15.8m of cash, net $1.3m and undrawn credit lines of $16m. With the drilling programme going well and what seems like huge demand from customers old and new at the other end of the pipeline prospects for VOG and the shares are hugely undervalued.

Premier Oil

So, at last the deal is done and subject to any last minute problems Prems have a deal with their lenders. Total existing facilities of $3.9bn remain and undrawn capacity is preserved. Maturity dates are aligned to May 2021 with covenants amended, net debt to EBITDA will be 7.5x to end ’17, 5x to end ’18 and 3x in ’19.With interest cover ratio reducing to 1.85x before increasing to 3x in ’19, covenant net debt has to be less than $2.95bn by the end of ’18. Unsurprisingly there are ‘enhanced terms for lenders’ or they would have to return to the house of God although how they can sleep at night nobody knows…

The company appear to be free to ‘selectively seek to invest in unsanctioned projects’ such as Tolmount and Sea Lion but the lenders have annual approval of Prems capex and exploration budgets and ‘final sanction’ of ‘significant new projects’. Add to that ‘certain approval rights’ in terms of acquisitions and disposals and you are not entirely in possession of what is closest to you..However, when all is said and done it could have been so much worse and is a valuable lesson all round. With very strong operational performance at the moment, especially with Catcher on the horizon Premier should be able to cope at all levels. The two key assets are Tolmount and Sea Lion, both consumers of cash and both up for farm-out which should now be a key priority as the latter should be responsible for the company’s medium term growth and it should be remembered is a world class asset…

Sound Energy-Took us up the Gherkin

Sound Energy takes looking after its shareholders very seriously and last night the London Gherkin was the venue for the strategy presentation by the board, including a very welcome speech by Marco Fumagalli of cornerstone shareholders Continental. Over 260 people attended and many queued up outside on the wait list whilst 2,000 people dialed in on the live feed such is the retail interest in the company. CEO James Parsons and the other speakers didnt disappoint with descriptions of the ‘end game’ and ‘golden tickets’ explaining the corporate strategy and solid, detailed analyses of the current programme. Luca Madeddu gave an overview of Morocco and Brian Mitchenor talked of 260 TCF of gas of which much had sadly gone but plenty remained while Leonardo Spicci also talked about the forthcoming spud at Badile in Milan.

Sound has an interesting upcoming programme, including the TE-8 well to hopefully start to confirm the characteristics of Tendrara, the Sidi Moktar prospect also in Morocco and of course the Badile exploration well in Italy. By the end of the year there should be a full CPR to enable an FID and FDP on Tendrara, as well as undoubtedly many other plans, as for presentations wherever next, Wembley Stadium?

Diversified Gas & Oil

DGO has appeared on the bourse this morning having raised £39.7m at 65p through Mirabaud. I met with the CEO and other board members yesterday to get an idea of this what this company does. Confusingly they dont consider themselves to be a gas or oil company, more a buyer of long term assets in their core areas of Ohio, West Virginia and Pennsylvania and even more confusingly intend to pay a dividend with a yield of around 5%. At present pretty much all of the asset base is proven reserves although at some stage the temptation will be to have a go at what could be a treasure trove of probable and possible resources. Having said that there is a list of up to a ‘magnificent seven’ acquisitions on the cards so they will remain busy.

The company has raised $50m to pay down debt, repurchase bonds and for working capital as above. The raise which is highly credible, is made easier by this company being more of a low risk and solid value asset base play which happens to have a progressive dividend policy based on its reserve base. DGO is worth keeping on the radar screen as it may pleasantly surprise.

And finally…

Another big weekend in sport and this is a truly awesome display, for those of us who follow the oval ball the 6 Nations Championship is the holy grail and tomorrow sees Scotland v Ireland and England v France and on Sunday Wales go to Rome to play Italy.

Another oval ball will be on display in Houston Texas as the Super Bowl will be fought out between the Patriots and the Falcons in what might be a close fought match. My ticket definitely got lost in the post and to think all those visits to Houston!

In the Prem this week’s monster match is the visit of the Gooners to Stamford Bridge, a win for Chelski might just see off everyone else as well. The Noisy Neighbours have picked up form and host resurgent Swans, the HubCap Stealers go to Hull City Tigers and the Red Devils are at the Foxes.

Finally it’s Davis Cup time again and team GB travel to Ottawa without Muzza hoping that recent good single form will do the trick against Canada.

]]> Diversified Gas & Oil lists on AIM and raises US$50mln to accelerate growth Fri, 03 Feb 2017 09:24:00 +0000 US- focused Diversified Gas & Oil plc (LON: DGOC) listed on London's AIM market today and raised US$50mln to accelerate growth in the process.
A delighted chief executive Rusty Hutson walks Proactive's Andrew Scott through the fundraise, his profitable firm, plans ahead and the attractiveness of the Appalachian Basin.
"The opportunities that exists in the US, especially in the Appalachian basin... we are seeing a lot of acquisition opportunities at favourable multiples...we are buying these assets very reasonably priced," he said.
This allows the firm to increase cash flows, and progress the dividend policy, he said.

]]> VSA Capital Market Movers - Metal Tiger, Millennial Lithium Fri, 03 Feb 2017 08:14:00 +0000 Millennial Lithium (TSX:ML)

Millennial Lithium (ML) has added to its existing prospective lithium acreage in the Pocitos basin of NW Argentina with the signing of an option to acquire 100% of an additional 15.9km2. This acreage is to be called the Pocitos West project. ML currently has a license at the north end of the basin optioned to Southern Lithium (SNL CN) and lies 40km west of ML’s primary project Pastos Grandes. ML will make initial payments of US$0.25m and a further set of staged payments over 36 months to total US$4.5m to acquire 100% of the license.

The Pocitos basin is 60km long and is a known host of lithium brines. Historical results from 12 shallow holes drilled in 1979 by an Argentine government agency yielded lithium in brine of up to 417ppm and potassium in brine up to 15,300ppm. Historical geophysical evidence suggests the basin is 500m deep under this license and has a floor which dips toward this ground.

ML continues to consolidate the ownership of prime lithium acreage in the Lithium Triangle of South America; the source of 80% of the world’s current lithium reserves.

We retain our SPEC BUY recommendation.

Metal Tiger (LON:MTR)

Metal Tiger (MTR LN)’s JV partner MOD Resources (MOD AU) announced this week a quarterly activities report. MTR holds a 30% interest in the T3 copper project in Botswana, for which MOD holds a 70% interest. Although the release does not contain additional new information MOD has confirmed that the PFS is now underway following the release of a PEA in Q4 2016.

The PEA demonstrated the potential for a low cost copper project producing c20ktpa Cu and 609kozpa Ag. Our analysis derived a post-tax NPV of US$170m on a 100% basis with initial capital of US$135m and cash costs of US$1.19/lb.

Currently MOD’s market capitalisation of A$48.8m (£29.7m) implies that MTR which currently has a market capitalisation of £9.8m does not even reflect the full value of its interest in the T3 project. We therefore believe that MTR continues to be heavily undervalued particularly given its broader portfolio of interests such as the brownfield zinc-lead-silver mine at Boh Yai and Song Toh in Thailand.

We reiterate our Buy recommendation and 5.68p/sh. target price.

]]> Oil price, Sound Energy, SDX Energy, SOCO, Plexus, And finally... Thu, 02 Feb 2017 13:24:00 +0000 WTI $53.88 +$1.07, Brent $56.80 +$1.22, Diff -$2.92 -46c, NG $3.17 +5c

Oil price
Sentiment over quota adhesion won over stock build and US production yesterday and crude had a reasonable rally helped by a weaker greenback. Stocks were higher than expected at 6.5m barrels and gasoline was also higher than forecast at 3.9m barrels, refineries still producing despite lower refining margins. Opec and non-Opec cuts appear to be working and the reports so far show that over 80% of the target is being hit, probably helped by Saudi cutting more to help things out. There are still many clowns out there who think that US production can rise by a meaningful amount from a standing start but pretty much anything they can do can be nullified by turning just one spigot in Saudi Arabia…
For those of you who looked at Cycles Analysis chart work from Andy Pancholi, the February package was out yesterday full of interesting facts and figures.

Sound Energy
Sound have released the independent basin model for Tendrara and Meridja which gives a mid-case number of Gas In Place as 17 TCF with a range of 9-31 TCF. The full CPR on the acreage should be commissioned after the results of the TE-8 well are known and before the FID which is scheduled to be taken at the end of this year. Existing wells prove up the 300-500 BCF already in the market and complement my current estimate of 3-5 TCF on the acreage. If however the numbers above were in any way accurate and their is no reason to believe not, there is a lot more to go for in the share price, time will tell.
Sound are not standing still, they never do and are already contemplating a drilling programme on Sidi Moktar wells for re-entry and taking a look at the lower Jurassic. We mustn’t forget that drilling on Badile is expected to start this quarter as well giving Sound and its shareholders a particularly busy few months. Talking of shareholders I am pleased to have my ticket for tonight where several hundred people are joining the company for an operational update. I’m told that many more couldnt get in with a wait list of another 100  and over 300 are dialing in to the presentation…

SDX Energy
Another company not letting the grass grow beneath their feet is SDX Energy who have produced a punchy update this morning. The South Disouq programme is well under way and with the well location decided, service company hired and the rig supplier and unit chosen a spud date of end February looks achievable. At Meseda the upgrade review has been completed and the project is moving to implementation phase. The work should double capacity and increase production by 100% from current production levels on the licence.

In the only recently acquired Moroccan acreage, the company are already talking about accelerating the drilling campaign and bringing forward 2018 plans into this year which might bring forward gas production too. CEO Paul Welch is upbeat in his statement and so he should be, he has a number of really interesting prospects with substantial upside, new and existing projects and the backing of his shareholders in the recent well oversubscribed raise, what’s not to like?

SOCO International
A rather uninspiring update from SOCO this morning as they miss their production guidance producing 9,883 b/d against a prediction of 10-11/- b/d although warning of slippage had been heeded. With over $100m of cash and a very strong model that delivers high prices and low opex giving a break even of the low $20’s one cant grumble but it is clear that they are gearing up for something hence the new ex-Cairn arrivals.

Plexus Holdings
It was disappointing to see the profit warning from Plexus but it is mitigated by the massive amount of cost cutting that has been going on and cash preservation. Also to a certain extent you know with Plexus that by the very nature of their offering repeat orders will be just around the corner from their blue chip client list. That is proven this morning by the announcement of an extension to a contract for Shell Brunei by two years. I would remain highly supportive of Plexus and its management and whilst this is a disappointment and shows that all is not yet rosy in oil service company land, POS will  undoubtedly be a survivor.

And finally…
The football this week has definitely been a bit weird as the top clubs put in highly differing performances. The Gooners were abject, the Red Devils could score against Hull City Tigers, Chelski missed a pen at Anfield that could almost have brought out the Trophy and only the Noisy Neighbours delivered in full.

The cricket tour is over thank goodness as yesterday England put in another great top, middle and lower order collapse losing 8 wickets for 8 runs. I was making the tea at the time and it lasted longer than that spell as our batsmen were bamboozled by a bit of spin, good thing it doesnt travel…

]]> Malcolm Graham Wood talks Sound Energy's “mind blowing” upside in Morocco Thu, 02 Feb 2017 12:18:00 +0000 We speak to oil and gas expert Malcom Graham Wood about Sound Energy PLC after the explorer estimated the potential for up to 31 trillion cubic feet of gas in Western Morocco.

The analyst discusses this week’s resource estimates, Sound Energy’s success to date in Morocco, and the exciting, upcoming TE-8 well.

]]> The ability for Anglo African Agriculture to grow is 'phenomenal' says David Lenigas Wed, 01 Feb 2017 16:25:00 +0000 Anglo African Agriculture plc (LON:AAAP) was set up to develop an agricultural trading group in Africa. Their wholly owned subsidiary Dynamic Intertrade is a food manufacturing company involved in the cultivation, manufacture, import and distribution of herbs, spices, seasonings and confectionary products.

Non-executive director David Lenigas tells Proactive: ''The ability of this business to grow 3,4,5, 10 times over the next few years is phenomenal''.

''When you look back at AAAP over the last year in particular we were doing about 80 tonnes a month of product. The demand for this product has picked up so dramatically from the new factory in Cape Town that critical mass for the business making profit is about 100-110 tonnes a month - we've blasted way through that in the last 3 months''.

Lenigas adds: ''We're updating the manufacturing facility to do three times the output. That work will be finished sometime this month - we certainly have the order book to fill that''.

''I see this as a great business - and we've now got to the point we're making money''.

]]> Northern Petroleum CEO 'really looking forward' to getting well reactivation programme going Wed, 01 Feb 2017 10:37:00 +0000 Northern Petroleum Plc (LON:NOP) has outlined an upcoming work programme for its Canadian assets that will see around 20 historic wells reopened and brought into production.

CEO Keith Bush tells Proactive: ''We looked at this as part of the opportunity when we did the asset acquisition over a year ago.''

''We always wanted to get some wells that had been shut-in for a long time started up and this is really the first opportunity since we've had the financial injection .... we can now really get after our work programme and the 20 wells are the first of it''.

]]> Oil price, Chrysaor, Wood Group, SOCO, And finally... Tue, 31 Jan 2017 10:39:00 +0000 Oil price

We might get a few down days albeit of a modest nature, the reason is that as the month ends scribblers galore will start guessing what January production was and how short of the 1.2m b/d target it is. First up today is Petro-Logistics who think that it was down by 900/- b/d which, should it be true would be pretty good from a standing start, I would have a small wager on it being a bit higher… The March Brent contract expires tonight and will probably actually remain fairly strong, the structure looks well set on fundamentals.


It has been the talk of the oil market for ages and today Chrysaor have announced that they have bought a package of assets from Shell for $3bn. It comprises 350m boe of 2P reserves that produce 115/- boe/d at a unit opex of under $15 per barrel. Chrysaor is bankrolled by EIG Global Equity Partners through Harbour Energy to the tune of $1bn with an RBL of $1.5bn. Shell remain committed through a decommissioning liability of $1bn. Nice to see Andrew Osborne back in the manor after a long exile.

Wood Group

Wood has announced a contract with Hess in Malaysia over five years and one, one year extension option. No value attributed but should be reasonable as it provides for 130 full time staff on the project providing operations and maintenance in the North Malay Basin.

SOCO International

Board changes dont often figure that much unless there is a particular reason so today’s news that Dr Watts is leaving the board of SIA has some interest. This is because in a few weeks time he is reappearing at the company with Jann Brown, also formerly of Cairn to set up their new Business Development Group. The actual wording from the company goes like this ‘ This change signals a renewed emphasis on growth to complement our high quality producing assets’. So, Watts and Brown are to be tasked with finding the next growth area for SIA, any sign of Greenland in the betting?

And finally…

The FA Cup draw was kind to Sutton and Lincoln who had really wanted Premiership teams and got the Gooners and Burnley respectively. Other interesting fixtures are a London Derby at Craven Cottage where Fulham entertain Spurs and Millwall have the temptation of hosting the Champions if the Foxes can beat the Rams.

There is a full Prem fixture list this week and the standout fixture is the HubCap Stealers who welcome Chelsea to fortress Anfield. Having had a bad January Herr Klopp needs to pull something out here.

And full marks to Karen Brady and the board at the happy Hammers, after that ponce Payet snuck away with his tail between his weaselly little legs, the club are buying back any Poyet shirts for £25 each, good riddance….

]]> VSA Morning Agri Comment Tue, 31 Jan 2017 09:03:00 +0000 NWF Group: H1 2017 Results

UK-focused specialist agricultural and distribution business NWF Group (NWF LN) has announced six month results for the period ended 30 November 2016 (H1 2017).

Revenue: £255.9m, +13.9% YoY (H1 2016: £224.6m), FY 2017 consensus is currently £487.3m (+4.6% YoY)

Adjusted Operating Profit: £2.2m, -21.4% YoY (H1 2016: £2.8m), FY 2017 consensus is currently £9.0m (+3.4% YoY)

Adjusted PBT: £2.0m, -23.1% YoY (H1 2016: £2.6m), FY 2017 consensus is currently £8.3m (+22.1% YoY)

Interim Dividend: 1.0p, flat YoY (H1 2016: 1.0p)

Net Debt: £19.1m, +83.7% YoY (30 November 2015: £10.4m)

Feeds: Revenue was £65.1m, +4.8% YoY (H1 2016: £62.1m), operating loss was £0.3m (H1 2016: profit of £0.3m)

Food: Revenue was £20.1, +4.1% YoY (H1 2016: £19.3m), operating profit was £1.6m, +14.3% YoY (H1 2016: £1.4m)

Fuels: Revenue was £170.7m, +19.2% YoY (H1 2016: £143.2m), operating profit was £0.9m, -18.2% YoY (H1 2016: £1.1m)

VSA Comment

Following its trading update on 19 December, NWF has confirmed the extent to which it has been impacted by the poor underlying market conditions in H1, particularly through Q1.

In feeds, following a very strong November for UK ruminant feed production (+8.0% YoY), DEFRA data shows overall ruminant compound feed production fell just 1.0% in NWF’s H1 with a QoQ turnaround clearly visible in the data (Q1: -4.7% YoY; Q2: +2.3% YoY), with sheep feed volumes being particularly strong.

This increase in demand has arrived alongside significant input commodity price increases as a result of the devaluation of the pound following the Brexit vote. This has caused margin pressure for NWF, leading to a loss for its feed division, despite two price increases being implemented during the period (in-line with peers). A third price increase has been made earlier this month as input commodity prices have continued to increase (UK feed wheat now +40% since 1 June 2016).

Although NWF gained market share in H1 (+1.5% YoY to 268,000t) it has clearly come at a cost with regards to margins. If commodity prices stabilise and NWF can maintain these customers, then it should receive a boost from these new customer additions in H2.

Net debt has increased in-line with expectations, with c£4m spent on automating the blending plant at Wardle and doubling capacity to more than 200,000t, and also doubling capacity at the compound feed plant at Longtown to 120,000t.  c£5m was also spent on the acquisition of Jim Peet Agriculture.

NWF’s food division continues its solid performance with its Wardle warehouse fully utilised and high service levels maintained. The division is benefiting from the gradual recovery in the ambient grocery market.

NWF’s fuel supply business was impacted by warm weather and lower demand for heating oil through summer (H1 volumes -20% YoY). FY performance will depend on temperatures in the remaining winter months, with a cold snap forecasted for February, which would be beneficial for volumes of higher margin heating oil.

NWF remains confident on meeting FY expectations, which would represent a significant turnaround from its performance in the quieter H1 period (adjusted PBT moving from -20% YoY for H1 to +20% YoY for FY). Due to higher commodity prices, consensus expectations for revenues are likely to be upgraded through £500m following these results. As we have been writing for some time, underlying market conditions have turned in the UK agricultural sector and NWF appears set to benefit from this improved sentiment in H2.

]]> Oil price, Ascent Resources, IGas, Premier Oil, And finally... Mon, 30 Jan 2017 13:23:00 +0000 Oil price

Still very quiet with no obvious signs of breaking out either way. Looking at the CFTC numbers on Friday the money managers have added to their long positions again, up by 24m barrels in WTI which is as high as they have been since 2014…The other positive is that reports are still coming through that the production cuts are being adhered to, as we hit the end of  the month reports will start coming in, corroboration would be good.

The bears are still working on a non-adhesion to the treaty and the continued rise in the rig count showing that the current rate, which is the highest since November 2015, will lead to a huge rise in US shale production thus wrecking the deal, I think US production will inevitably rise but won’t stymie the deal.

Ascent Resources 

News this morning from Ascent where we have been waiting for the result of the flow test at Pg-10 at the Petišovci project in Slovenia.  The result ‘exceeded management expectations’ which isnt always a good guide until you know whether you are dealing with an optimist or a pessimist but I have put a call into the company to find out, I think the person I spoke to thinks I am mad. Either way, until I have guidance I think that this is a good flow rate and would, I suspect be a decent step forward towards the ever present off-take agreement.

I have, since those words, spoken to Colin Hutchinson and feel that the 8.8m number is genuinely good, being higher than the 2011 number after which time anything might have happened. Indeed having to perforate the tubing meant that I suspect that anything much north of 5-6/- mmscf/d would have been acceptable. The company is eager to start selling gas and hopes to be under way by the end of this quarter all being well. Considering its past, this marks a most interesting situation for Ascent and with phase one looking good, the upside for phase two is also worth looking at.

IGas Energy

Looking at the statement from IGas this morning it looks as if the company has been forced to make a payment to bondholders as it  appears to have undershot its oil and gas investment last year by $2.3m. This offer is open until March 1st and will obviously reduce the cash in the company and have a modest restriction on activity.

Premier Oil 

I took the opportunity the other day to spend a bit of time with Tony Durrant as a catch up and also so he could correct any errors I might have made in my recent podcast. There is little doubt that whoever you talk to that Solan has been a huge disappointment and the company are lucky to have been able to carry the passenger as long as this. The company have spent ‘far too much money on it’ and whilst the P1 well is producing 10-11/- b/d the P2 well has significant water injection problems and is doing 1-3/- b/d and the company needs to find a solution. Unfortunately there isn’t an obvious one around the corner, a frac job might be possible when the weather improves and a sidetrack well is a possibility but unlikely before April 2018. Putting in a call to Dr Trice who is nearby is a possibility but a long shot in my view.

On a much more positive note it seems that Catcher is up with, if not ahead of events and is planned to leave Singapore in late June/early July and will take around 45 days to get to the North Sea  and first oil still expected in the 4th quarter. With work going better than expected the company are already talking about de-bottlenecking and the current plan for   50/- b/d could be nearer 65/- b/d if the FPSO can handle it. Also continuing to impress is Tolmount which was definitely sold too cheaply and will actually take much more investment than first envisaged, indeed one can expect a farm-down of around 20% at some stage. There is added value to Prems due to their tax losses and here one might find a potential buyer amongst the growing army of infrastructure funds who could make it work for them.

The market has taken the view that Sea Lion is on the back burner, especially with the bank debt being renegotiated at the moment. TD said that they were ‘digging their heels in’ with the banks to ensure that they had the flexibility to go ahead with both this and Tolmount but it too needs a funding package. They need to find a partner, same old, same old, but with the relationship with Argentina being re-kindled more doors should be opening all the time. Indeed it in this day of flexible financing it could be that a service company might find it interesting, after all there are 20 wells in phase one and 30 in phase two and over ten years of work for somebody. Given the falling industry costs and that at $55, margins are higher than with oil at $110 one might have expected some action here, after all developments of such size are creating vibes around the industry elsewhere. Elsewhere there are exciting possibilities in Mexico and with the Tuna project both of which are considered by the technical department to be most interesting.

Finally the renegotiation of the debt which has taken way longer than the market expected and I suspect longer that the company did too. TD says that a 50 page term sheet has become 110 pages but I think that the end may be near, despite wobbles in the process partly as stories of banks bailing out swept the marché. After the lawyers have finished it goes to the banks, private placees, convertible holders and private retail bondholders who must surely now p*** or get off the pot. This whole process has been a considerable frustration all round but should now be signed and sealed and banks should work out whether they want to be in energy financing or not.

It has been a long year for Premier and it’s not quite over yet, once the financing is sorted they only need to fix Solan, deliver Catcher and fund Tolmount and Sea Lion, after all if they dont where is the growth going to come from?

And finally…

The FA Cup always throws up surprises but nowadays minnows who win can have the gloss rubbed off as stronger teams field weakened sides. Dont tell that to Sutton who beat Leeds or Lincoln City who beat Brighton. Indeed the Hubcap Stealers lost to Wolves and both Watford and Hull City Tigers lost to Championship sides Millwall and Fulham respectively. Oxford will be happy to be in tonight’s draw  having seen off the Magpies who also dropped almost all the first team and Spurs managed to revive Fergie time as the fourth official held up the board that said ‘until Spurs score’ as they eventually beat Wycombe Wanderers 4-3. The Gooners, Red Devils and Noisy Neighbours went through to the draw with ease.

And although it is no excuse, competent umpiring would surely have made a difference in yesterday’s T20 but it makes Wednesday’s decider much more fun!

]]> VSA Capital Market Movers - Egdon Resources Plc Mon, 30 Jan 2017 09:01:00 +0000 Egdon Resources (LON:EDR)

Egdon Resources (EDR)# has acquired an additional 12.5% working interest in PEDL 201 in the Widmerpool Gulf from Corfe Energy for a consideration of 424,593 shares, equivalent to £50k based on the average closing mid-price for the five days prior to completion.

This increases EDR’s interest in the licence to 45% which lies in its core area of the East Midlands which is considered prospective for both conventional and unconventional resources. We value PEDL 201 as part of EDR’s shale portfolio, therefore, the value added by increasing its net acreage offsets the dilution by the issuance of these additional shares. Hence we maintain our BUY recommendation and 34p TP.

]]> '2017 is the year we've been waiting for' says PowerHouse Energy chairman Thu, 26 Jan 2017 12:18:00 +0000 PowerHouse Energy Group PLC (LON:PHE) chairman Keith Allaun brings Proactive up to speed on the latest with their G3-UHt Ultra-high temperature Demonstration gasification system.

It's now left the harbour in Brisbane, Australia and is bound for the UK. The transit time is estimated to be 50 days.

Allaun mentions that discussions are continuing with a number of interested commercial parties for the siting of the unit.

]]> VSA Capital Market Movers - Anglo American, Kaz Minerals, Polymetal International Thu, 26 Jan 2017 08:23:00 +0000 Anglo American (LON:AAL)

Anglo American (LON:AAL) has released largely strong production results for Q4 2016 with production increases across all commodities bar copper and met coal. Diamond production of 7.8mnct was up 10% YoY reflecting curtailed production in 2015 and also the increased contribution from Gahcho Kue in Canada. Platinum production of 610koz was up 2% YoY in Q4 meaning full year production of 2.38mnoz was also up 2% YoY.

Copper production of 147kt was down 19% YoY in Q4 and 10% YoY to 577kt for the full year. This was due to unplanned disruptions as well as planned sequencing of lower grades at Los Bronces. Nickel production of 11kt was up 4% YoY in Q4 meaning full year production of 45kt was up 47% YoY driven by the ramp up of additional capacity.

Iron ore production at Kumba was strong, up 9% YoY to 12mnt in Q4, however, full year production was 8% lower YoY at 42mnt. The optimisation of the pit shell did not take effect until H2 2016 hence the weaker annual output. The ramp up at Minas Rio continued strongly, however, with production of 4.9mnt up 49% YoY with full year production of 16.1mnt up 76% YoY. Met coal production was 2% lower YoY in Q4 and the full year at 5.4mnt and 21mnt respectively following the sale of Foxleigh. Thermal coal production up 4% in Q4 to 8mnt was insufficient to offset the sale of Callide meaning full year production of 33mnt was down 4%.

Polymetal (LON:POLY)

Polymetal (POLY LN) has announced strong Q4 2016 production results with gold equivalent production of 375koz, up 21% YoY. This was primarily driven by stronger gold production, up 30% YoY to 285koz in Q4 while silver production was down 3% YoY to 3mnoz. Full year production of 1.27mnoz gold equivalent was marginally ahead of full year guidance of 1.26mnoz.

POLY expect gold equivalent production of 1.4-1.55mnoz, however, cash costs are expected to rise versus 2016 to between US$600-650/oz from US$525-575/oz and on an AISC basis to US$775-825/oz from US$700-750/oz.


KAZ Minerals (LON:KAZ)

KAZ Minerals (LON:KAZ) has announced strong Q4 production results with 140kt of copper produced in the full year, up 73% YoY and in line with guidance.  Gold production was strong and ahead of guidance with 40koz produced in Q4 meaning that full year production of 120koz was up 245% due to elevated grades at Bozshakol.

]]> Oil price, SDX Energy, EnQuest, Bowleven, And finally... Wed, 25 Jan 2017 14:18:00 +0000 Oil price

Boring is the correct word to be frank as crude lifts gently on the back of global supplies tightening and stocks slowly falling. After the close the API numbers were in line with forecasts at +2.93m barrels but Cushing was down which was ok but gasoline stocks were still very high.

SDX Energy

SDX has announced – finally- that it has acquired the Egyptian and Moroccan assets of Circle oil from a pre-packed bankruptcy and raised $40m at 30p to pay for it. When the company came to London last year it vowed to become a mid-tier E&P in North Africa and this takes the company some way down the track to doing just that. It has picked from the shelves the assets in Egypt and Morocco which fit with the current portfolio and the plans. The licences come debt free for $30m which SDX say is 39 cents in the dollar for the debt. With an average net back of $24.11 the deal seems to promise a swift return to shareholders.

The Egypt asset gets them 40% of the NW Gemsa concession in which they already have a 10% stake, this means that without any further cost, the extra income drops through to the bottom line with ease. 2P reserves here go up by 3.77 mmboe. In Morocco they get 75% of Sebou and  LM concessions  which adds 4.5 MMscf/d of production and 2P reserves of 1.45 mmboe, so in total SDX adds 5.22 mmboe to the book. Infrastructure in Morocco obviously includes 75% of the pipeline which takes gas to market and has significant spare capacity.

SDX also has an interesting existing portfolio and I am excited about prospects for South Disouq in particular which is due to spud shortly and following 3D seismic now has both oil and gas plays. Overall I feel that SDX has successfully transited during its time in London, it has built a solid base and now is becoming a bigger player with this acquisition and raise, in which existing and new shareholders made the issue very well oversubscribed, does the bucket list beckon?

I have done an interview with Paul Welch, CEO of SDX in which he discusses the deal, the link is here.

TipTV CEO interview: Paul Welch of SDX Energy


Time prevented me from writing about EnQuest yesterday but it looks like a pretty sensible deal to me, from both sides. For EnQuest, buying a 25% stake in Magnus is fairly cheap and in fact, through paid through cash generated by the field itself. No worries about decommissioning either as BP retain the liability subject to further deals on that front. We are going to see a bit more in respect of late life assets as the majors tidy their portfolios and their liabilities, they may well be attractive to smaller players if terms are like this.


The FT reports what has been significant gossip in the sector lately about a Monaco-based investor who is amassing a stake in the company in order, one presumes to snaffle the cash. Crown Ocean Capital is asking for virtually all the board’s heads on a platter and has two directors ready to take over. I am grappling with my recommendation on BLVN at present ahead of the bucket list changes but although I know there is discontent I am not quite so sure that it is well directed. The company took a huge cheque in farming-out in Cameroon in recent years and is set pretty well as a result. It is not their fault that the new owners havent spun the drill bit yet but $250m gets you over a lot of things. I have personally said that  I would have done some things but in general am not pointing my guns at the BLVN board even if I sometimes wish they might be a bit more proactive.

And finally…

Sad to see that Johanna Konta lost her game in Australia to Serena Williams but in the mens side both Federer and Nadal are holding up the standards for the old brigade.

And Cheltenham gets a bit more open as Annie Power withdraws from the festival…

]]> SDX Energy boss hails 'transformational' $30mln asset acquisition Wed, 25 Jan 2017 13:05:00 +0000 SDX Energy Inc (LON:SDX, CVE: SDX) has revealed it will pay US$30mln to acquire Circle Oil’s assets in Egypt and Morocco.

The deal will see SDX increase net production by almost 250% to 4,705 barrels oil equivalent per day.  Reserves, meanwhile, rise by 64% to 12.03mln barrels oil equivalent.

CEO Paul Welch tells Proactive: ''For us it's a transformational deal ... it takes us up to a significant amount of production and most importantly it increases our yearly cash flow by $21mln - and that's what's attractive to us''.

]]> VSA Capital Market Movers - Antofagasta Plc, BHP Billiton plc, Fresnillo Wed, 25 Jan 2017 08:34:00 +0000 Antofagasta (LON:ANTO)

Full year copper production at Antofagsta (LON:ANTO) narrowly missed full year guidance of 710-740kt at 709.4kt despite a 12.5% YoY increase. Q4 2016 copper production of 206kt was up 14% QoQ and 22% higher YoY. 2016 gold production of 271koz was up 27% YoY at the upper end of guidance of between 245-275koz.

Despite weaker than planned copper production, net cash costs were ahead of guidance of US$1.25/lb at US$1.20/lb, down 20% YoY. Q4 2016 net cash costs were down 4.2% QoQ to US$1.13/lb.

Guidance for 2017 suggest broadly flat copper production at 685-720kt. Gold production is expected to decline significantly to between 185-205koz while molybdenum production is expected to modestly increase from 7.1kt in 2016 to 8.5-9.5kt in 2017. Capex was previously guided to below US$900m in 2017 while group cash costs are forecast to rise modestly to US$1.30/lb, due to a weaker by-product credit contribution. Operationally the outlook appears weaker in 2017, in our view; however, this is likely to be offset somewhat by stronger copper prices.

BHP Billiton (LON:BLT)

BHP Billiton (LON:BLT) has released weak results, with production declines in petroleum, copper and thermal coal in H1 FY 2017. Petroleum production of 106mmboe was down 15% YoY in H1 due to a sharp decline in onshore US production. Conventional production was largely flat, meanwhile. Copper production of 712kt was down 7% YoY as although Escondida production was flat at 452kt this was offset by maintenance at Pampa Norte and grade weakness at Antamina.

Iron ore production of 118mnt in H1 FY 2017 was up 4% YoY as production continued to ramp up at Jimblebar. Met coal production of 21mnt was up 1% YoY while thermal coal production was down 4% YoY to 14mnt.

Fresnillo (LON:FRES)

Fresnillo (LON:FRES) has released strong results with silver production of 50.3mnoz, up 7% YoY and in line with guidance. Q4 2016 production of 13.3mnoz was up 10% YoY. FRES also benefitted from strong gold production of 934koz, up 23% YoY and ahead of guidance. This was enhanced by a one off inventory drawdown at Herradura. Guidance for 2017 is for continued strong silver production with a further annual increase to 58-61mnoz including 4mnoz from the silverstream. Gold production is again expected to be strong although without the inventory drawdown impact this will likely be lower at between 870-900koz.

]]> MUST WATCH - Origin Energy video gives insights to Beetaloo shale Tue, 24 Jan 2017 12:31:00 +0000 Falcon Oil & Gas (LON:FOG) has seen great success in Australia’s Beetaloo shale basin, with wells unearthing new discoveries. A new resource evaluation report is currently being worked on to further detail the size and scope of the discovery and the potential of its surrounding areas.

A video from Origin Energy, the project operator, adds valuable insight to the venture.

]]> Oil price, Amerisur, Rockhopper, And finally... Tue, 24 Jan 2017 08:51:00 +0000 Oil price

A very quiet day according to traders, oil was firmed by the continued weakness in the greenback and the comments from Iraq suggesting that all members of Opec were playing the game but some drift was provided by talk of US production increasing, but that’s a given surely?

Amerisur Resources

More good news from AMER this morning as they announce that Platanillo 24 has been tested and placed on commercial production of 420 b/d of natural flow. The interval of 7 feet was perforated in the lower U sand only and brings the OBA system up to 3,100 b/d which is another step in the right direction.


I notice that Kuwait Energy has announced the signing of a farm-out agreement for a 25% participating interest in the Abu Sennan Concession in Egypt to Global Connect Limited. Global Connect is a ‘recently established E&P company with a focus on the MENA region’.

Readers will know that other participants in this concession are Dover Investment Ltd and Rockhopper who own 28% and 22% respectively and Kuwait Energy with its remaining 25%  and will continue as Operator. It will be interesting to see if anyone pre-empts this deal but I suspect not as it seems the implied valuation appears to be materially higher than Rockhopper paid.  Either way it looks like a win-win situation from RKH who have been quietly adding to their Greater Med portfolio.

And finally…

So, farewell Bernie Ecclestone who has been moved upstairs at the age of 86, its been a good knock, as they say and i’m sure he can still afford a paddock pass…..

]]> Oil price, Lamprell, Thalassa Holdings, Sundry-Genel/GKP- Providence- Cairn/Far- And finally... Mon, 23 Jan 2017 12:50:00 +0000 Oil price

Very little change last week, indeed this time last week you could have closed the book and taken the week off. The usual voices pushing either way had no ammunition although the bears had a go on Friday after the rig count numbers to no avail, with oil units up 29 to 551 one might have expected more. Indeed it was the mildly better economic news from China post their GDP and oil import numbers that got the bulls going ahead of the impending New Year celebrations. Finally the ‘Opec’ meeting at the weekend did a fair bit of monitoring and even set up a compliance committee to oversee the numbers, but news from the Saudis remained steadfastly solid.


The pre-close update from Lamprell was never going to blow any doors off, the recent modest orders could only keep the wolf from the door and in the absence of  anything else, this had the smell of a profit warning. Revenues for 16 look like around $700m but guidance for ’17 has not changed yet from the $400-500m level albeit a nudge to the lower end of that level. Costs are coming down sharply as you would expect, but with three deliveries in 2H 16 and three more in 1H 2017 the yard must seem quite empty sans Tourneau’s. As we thought when we visited just over a year ago there is little that can be done to smooth the cycle, but even having said that the Chairman’s statement was distinctly bearish on the order front. Long term this is still a good business but for the moment it is hard going with no sign of the upturn I would have started to see by now.

Thalassa Holdings

There is rarely a dull moment with Thalassa Chairman Duncan Soukup around and todays statement is an immaculate blend of confidence and despair with a lecture to world leaders in between. Firstly the update and outlook where 2016 ‘exceeded’ market expectations with revenue of $14m, clean PBT of $2.2m and cash of $7.7m, maybe more. As a result of this the buy out is back but with the ’17 outlook as ‘cautious but unpredictable optimism’ shareholders may take him up on that. He concludes the statement by worrying about international economic policies and how they will play out, mostly words to jump off cliffs to.

“Holding one‘s breath and jumping is not a prudent economic or business model which is why the THAL Board is reticent to present any long term forecasts in the current political and economic environment. In fact, given the upcoming elections in France and Germany and the inauguration of President Trump, we would go so far as to say that even short-term predictions are nothing more than speculative guesses.”

PS “We wish everyone a prosperous 2017.” He might have said, have a nice day……


Genel and GKP have both announced some payment of October invoices, it seems that GENL has done better but it is probably swings and roundabouts. Either way there appears to be a slight warming from the KRG, probably associated with the recent rally in the oil price but the mountain pf receivables has not been dented yet.

News on wells to be spudded include from Providence Resources who say that the Druid well is in good time and they have a spud date of June of this year.

Far and Cairn have announced that the SNE-5 well spudded last Saturday with the intention of fine tuning the SNE concept, it will likely be back to back with the SNE-6 well and they should take 50-60 days each. It has to be noted that the situation regarding the ConocoPhillips farm-out to Woodside is yet to be completed, as Far believe that the pre-emptive rights notice has not been issued to the JOA. Whatever the outcome of the matter, I believe that the upside for Far has yet to be taken into account by the market, especially given what Woodside are preparing to pay for the stake and that was when oil prices were 10 bucks cheaper…

And finally

The Patriots booked their place in Super Bowl LI last night after they beat the Steelers. However, they will face tough competition from the Falcons after Matt Ryan demolished the Packers in Atlanta.

Patriots quarterback Tom Brady will be looking to collect his 5th Championship ring and his team will start as marginal favourites in Houston in a couple of weeks time.

Muzza and Danny boy blew out of Australia on Sunday morning with so much promise, Johanna Konta will be playing Serena Williams on Wednesday.

In the footy there was a bit of a shakeup which might have been more. Chelski beat Hull and the Gooners got a 98th minute penalty to beat Burnley. The HubCap Stealers lost to the Swans at mighty Anfield and some consider the Noisy Neighbours to have been a tad unlucky in only getting a 2-2 against Spurs. Wayne Rooney saved up the scoring of his record goal to secure a point against the Potters.

And Ronnie O’Sullevan won the Masters, never looked in doubt…

]]> VSA Capital Market Movers - Petra Diamonds Mon, 23 Jan 2017 11:09:00 +0000 Petra Diamonds (LON:PDL)

Petra Diamonds (LON:PDL) has announced a trading update for H1 FY 2017 which is soft, in our view, as achieved prices disappointed. Production increased 24% YoY to 2mnct as mining at Finsch and Cullinan moved away from undiluted ore thereby improving grades while PDL also benefitted from the increased contribution from tailings production at Ekapa. Grades were in line with company guidance and full year guidance of 4.4-4.6mnct is unchanged. However, since the period end, PDL has experienced some labour disruption at Cullinan due to a dispute with contractors. This may impact up to 0.6mnt of ore throughput.

Revenue was up 48% YoY to US$228.5mn, in part due to the timing of sales as volumes sold increased 47% YoY to 1.9mnct. However, per carat prices demonstrate a mixed picture. Despite a periodic increase in per carat values at Finsch of 20% and at Koffiefontein of 8% these disappointed versus guidance. At Cullinan and Williamson per carat values were ahead of guidance although at Williamson values declined 17% YoY.

Capex was marginally lower at US$135m (-4% YoY) although this represents c70% of FY 2017 capex. Net debt was up 21% YoY to US$465m.

]]> VSA Capital Market Movers - Mariana Resources Ltd, Shanta Gold Limited Thu, 19 Jan 2017 14:25:00 +0000 In the news: Mariana Resources, Shanta GOLD, West African Resources, Base Resources & The Alchemist


We have a few items of news today. In the Companies section we have a review of the amazingly robust results of a Preliminary Economic Assessment into the development of the Hot Maden Project in Turkey, in which Mariana Resources† has a 30% interest. The study delivered a post-tax NPV8 of US$1.4bn for the whole project and an IRR of 153%. We also review the quarterly production report from Shanta Gold, a company that is building a solid reputation for delivery from its New Luika operations in Tanzania.

You might have missed this on West African Resources (we did!). The company has now received the mining permit for its lead project in Burkina Faso; this has been renamed Sanbrado (it was formerly Tanlouka). With this significant milestone passed, the company is now focused on the delivery of the definitive feasibility study for the project, which is scheduled to be completed by the end of 1Q17.

Just to remind you about our latest publications. Jim Taylor put out Base Resources*† — December Quarterly Activities Report, 17 January 2017. The company’s latest quarterly figures show it continuing to offer quality exposure to improving mineral sands markets. Production was largely stable, with guidance for 2017 largely unchanged.

We also published our latest edition of The Alchemist. This was focused on zinc, which should benefit from rising commodity prices, production cuts, minimal new mine development and growth in demand. The piece looks at where investors can obtain exposure to zinc miners. It can be viewed here.




LON:MARL| £0.835 | US$128m

Stellar Economics Highlighted in the Hot Maden PEA

Mariana Resources has announced the results of its Preliminary Economic Assessment (PEA) of the 30%-owned Hot Maden gold-copper project in Turkey. Headline figures includes a base case of 1.0Mtpa mined, a nine-year mine life producing 2.6Moz Au and 142,000t Cu, an IRR of 153% and an NPV8 of US$1.4bn.

COMMENT: The Hot Maden PEA assumes very low operating costs and a low upfront capital intensity from a sizeable underground mining operation. The economics showing a post-tax NPV8 of US$1.4bn and an IRR of 153% highlight why Mariana’s stock price has quintupled over the last 12 months. The pace of development has been fast, with no sign of letting up. The current programme includes a further 10,000m of drilling, with the next milestone the planned publication of a pre-feasibility study in 3Q17. Subject to financing and permitting, we suggest that this could see the completion of a DFS and the project construction completed by the end of 2018.

Mariana’s flagship asset is the Hot Maden Project in Turkey — Hot Maden is a gold-copper project in north-eastern Turkey. It is a joint venture, of which Mariana owns 30%. The JV partner owning 70% is Turkey-based Lidya Madencilik Sanayi ve Ticaret AS (Lidya), the mining arm of Çalık Holding, a private Turkish conglomerate with operations in energy, construction, mining, textile, finance and telecommunications. The company’s 30% interest was acquired as part of its acquisition of Aegean Metals Group (announced in September 2014). Drilling commenced in December 2014 and was performed (and fully funded) by Lidya in order to earn its 70% interest.

Very low capital intensity is key to driving IRR — Upfront capex is expected to be US$169m, which equates to US$51/oz AuEq over life-of-mine. Total capex (upfront + sustaining) is expected to be US$261m, which equates to US$79/oz AuEq life-of-mine.

Low-cost underground mining adds to the positive economics — The mine plan assumed in the PEA is an all underground operation using transverse and longitudinal long-hole open stoping. The base rate for mining and processing is 1.0Mtpa, with an assumed mineable quantity of 7Mt at 11 g/t gold and 1.9% Cu over a nine-year mine life. Mining costs are assumed to be low at US$31.05/t.

The gravity and flotation process delivers high recoveries — Metallurgical testing to date has been done through flotation and concentration, and indicated high recoveries of both copper and silver. The assumed recoveries vary based on grade, but the life-of-mine weighted averages are 88% Au and 90% Cu. The flow sheet for the PEA assumes the production of one standard copper-gold concentrate, and a second gold-bearing pyrite concentrate for sale to smelters. Processing these concentrates is assumed to cost US$15.13/t.

Economics highlight a low-cost operation with a very high NPV — In calculating the NPV, the company assumed a gold price of US$1,250/oz and a copper price of US$2.75/lb. Royalties on the property include a 2.6% state royalty and a 2% NSR to pay to Sandstorm. The PEA highlights an NPV of US$1.4bn using an 8% discount rate, and an IRR of 153%.

The fast pace of development is expected to continue — Lidya and Mariana will continue to advance this project rapidly in order to capitalise on what appears to be a highly cash-generative asset. This went from early drill results to PEA in 20 months, and is expected to move to PFS by 3Q17. The PFS is expected to consider the economics of the hanging-wall zinc zone (2.8Mt at 4.0% Zn), which was not considered in the PEA. The study will be conducted concurrently with a 20,000m drill programme planned for this year, including exploration drilling aimed at the discovery of new resources south of the Main Zone in the area of the old Russian mine.


LON:SHG | £0.11 | US$81m

December Quarterly Production and Operational Update

Shanta Gold has announced that 4QFY16 production from New Luika in Tanzania was 18,897oz (-8% QoQ). Cash costs were US$486/oz (+26% QoQ) and AISC US$747/oz (+20% QoQ). For the full year, production was 87,713oz (+7% YoY) and AISC were US$661/oz (-22%).

At 15,285oz, gold sales for the quarter were 81% of the total produced over the period. This, and a lower gold price received of US$1,187/oz, contributed to cashflow from operations going from US$11m in 3QFY16 to an outflow of US$0.1m in 4QFY16. Capex of US$13m and the receipt of US$5m in cash from a silver streaming deal led to a US$5m increase in net debt QoQ to US$43m (debt of US$58m and cash of US$15m).

Production and cost guidance for FY17 was 80,000–85,000oz at AISC of US$800-850/oz. Production is expected be lower during 1H17, when the ramp-up of higher-grade underground ore is scheduled to commence, than in 2H17.

COMMENT: Annual production was a record for the operation and was ahead of guidance for the year of 82,000-87,000oz. Also, AISC for the year of US$661/oz were lower than guidance of US$690-740/oz, further building the current management team’s growing reputation for delivery. This was reinforced by statements that the all-important, fully-funded transition to underground operations is on budget and on schedule to deliver first ore by mid-year.

With respect to the future; an updated mine plan is planned to be completed by the end of 1Q17, which we expect to increase the planned mine life by two years (to 2023). The project retains considerable local and regional exploration potential, on which the company is now re-focusing its attention.

Encouragingly, the company also stated that its net debt will continue to decline in 2017, despite the completion of the underground development programme in 1H17.

In summary, the outlook for Shanta looks positive.

Production has been stable and costs have fallen — Commercial production was declared at the 100%-owned New Luika gold mine in south-west Tanzania in 2Q13. The company produced 64,000oz in 2013, 8,000oz in 2014 and 82,000oz in 2015; it has now delivered 88,000oz in 2016. Over each of these years, All-in Sustaining Costs (AISC) declined YoY (from US$1,049/oz to US$941/oz, to US$834/oz and to US$661/oz in 2016).

Much of cashflow hitherto has been re-invested in the project — A large proportion of the healthy cashflow generated by New Luika since coming on-stream has been reinvested in the operation. Between 2013 and 2016, Shanta’s operating cashflow totalled US$140m; over the same three-year period, a total of US$115m of this was reinvested in the operations (mainly on retrofitting the plant), resulting in net cashflow before finance over the four years of US$25m. In spite of the planned capex in 2017 of US$33m, much of which will be spent in 1H17, the company has stated that it expects to reduce net debt over the coming year.

New Luika commenced transition to underground in 2016 — Operations currently comprise production from two open pits — Ilunga and Jamhuri (which contained 39,000oz of gold reserves) — and from stockpiles. A further three small deposits (with total reserves of 49,000oz) are planned to be mined by open pit until the end of 2021. Under the current plan (‘Base Case Mine Plan’ of September 2015), production from underground mining operations is planned to commence at the Bauhinia deposit in early 2017, and at the Luika deposit by mid-2017. This plan included total production of 310,000oz from 2016 to early 2022, at average AISC of US$640/oz and pre-production capex of US$38m (excluding working capital). Assuming throughput of 600,000tpa, recoveries of 90% and a head grade of 4.8 g/t, the Base Case Mine Plan forecast average production of 84,000oz pa between 2016 and 2020.

New mine plan to be published in 1Q17 — The company plans to announce a new mine plan in 1Q17 that will update the previous ‘Base Case Mine Plan’ of September 2015. The new plan is expected to include a modest increase in reserves at the Elizabeth Hill deposit, and also the incorporation of a third planned underground operation at the Ilunga deposit. We expect that this will extend the mine life by two years (until mid-2023).

To date, development of the first underground operation at Bauhinia is on time and budget — The decline has now intersected the first ore levels and the first stope is planned to be in production by July 2017, with full production from Bauhinia to be reached by 1Q18. We anticipate first production from Luika underground by the end of 2017 and full production around mid-2018.

Current EV of US$124m — Net debt at the end of 2016 was US$43m, comprising US$15m of cash and US$58m of gross debt. We estimate that this comprised:

• US$3m of promissory notes, repayable April 2017

• US$37m loan from Investec (Libor +4.5%, repayable over four years)

• US$15m of convertible loan notes (maturing April 2019, 13.5% interest, convertible at US$0.47/share (equivalent to £0.38/share))

• US$3m of equipment finance and lease finance

At the company’s current share price and with 583m shares outstanding, the current market cap is equivalent to US$81m. With net debt at end-December of US$43m, the estimated enterprise value is therefore US$124m.


]]> Zak Mir tips Xeros Technology shares to re-test 2015’s highs Thu, 19 Jan 2017 11:30:00 +0000 The Xeros Technology Group PLC (LON:XSG) shares could be set to revisit its 2015 highs, so sys leading technical analyst Zak Mir.

“It looks as though a break through £2.50 and this 2015 resistance line could take the shares up for a re-test of 2015’s best levels of above £3.50 for later in 2017,” he explains in the latest segment of the Proactive Investors Bulletin Board.

]]> Sound Energy Thu, 19 Jan 2017 10:42:00 +0000 A flash blog on Sound this morning but a genuine keynote deal to mention let alone a very good EWT reported by the company.

The EWT has clearly been a significant success and in line, or better than the company had expected. Just under 1 BCF was produced in 56 days of continuous flow and they have now started the final pressure build up phase. This is consistent with pre-test estimates and confirms good deliverability of the TAGI reservoir, it justifies the horizontal well and shows ‘significant potential’. Flow rates were were limited to 40% draw-down to preserve completion integrity and good average rates were achieved over decreasing choke sizes. With no formation water and no indication of barriers detected Sound will now check pressures at TE-5 and TE-6 for connectivity. The last piece of this jigsaw for now is the TE-8 well for which a fair bit of valuation lies, civil works are under way some 12km away from TE-7  and the company are expecting to spud next month.

In another announcement this morning the company has proposed that they acquire OGIF’s interests in Eastern Morocco for shares at what seems like an attractive discount. OGIF is a Moroccan fund owned by six large local institutions including the largest Bank and Pension Fund amongst others. The influence and access to capital in country should not be dismissed lightly and I suspect that the interest that OGIF may have in getting involved in the infrastructure solutions may help identify these with such help from the new shareholder.

The deal gives Sound and its shareholders a very strong position, by buying in before the outpost well is drilled gets an early start and the 30% discount to core NAV might achieve even more. This is hugely accretive to Sound and delivers scale on an impressive basis (75% gross, 47.5% net of Tendrara and 75% gross of Meridja), should this asset prove to be as big as some expectations, then it prepares the way for a classic asset sale if a suitor with deep pockets were to come along. These are exciting times for faithful retail holders, supportive Continental, and now OGIF who bring a local interest to the play engineered by Sound’s strong and enterprising management.

]]> Sound Energy deal 'one of the best in the industry for a while' says Malcolm Graham-Wood Thu, 19 Jan 2017 10:31:00 +0000 Oil analyst Malcolm Graham-Wood outlines to Proactive the significance of Sound Energy PLC's (LON:SOU) deal to acquire an extra 20% of the Tendrara gas project.

''The fact that Sound have tied all this up means that if the plan in a year or two's time was to sell this asset in one go ... then you've just made it possible for that to happen''.

Graham-Wood adds: ''Sound shareholders should like this very much''.

]]> VSA Capital Market Movers - Acacia Mining Thu, 19 Jan 2017 08:41:00 +0000 Acacia Mining (LON:ACA)

Acacia Mining (LON:ACA) has announced strong production results for Q4 2016. Production of 213koz was up 6% YoY resulting in record full year production of 830koz, up 13% YoY. Higher throughput and stronger recoveries offset a marginal YoY decline in grade driving cash costs down by 7% YoY whilst AISC were down 5% YoY to US$952/oz. For the full year AISC of US$958/oz, down 14% YoY, indicates strong free cash flow generation, which given the stronger gold price for much of the year, resulted in net cash rising from US$114m to US$219m.

Although full year guidance was not provided at this time, ACA indicated that production at Buzwagi would be extended by six months to the end of 2017 before two years of stockpile processing. This will likely result in an increase in annual production from 162koz in 2016 at Buzwagi.

It was announced recently that ACA is in talks to merge with TSX listed Endeavour Mining (EDV CN). EDV has assets in Mali, Ghana and Ivory Coast. EDV produces less gold per annum at below 625koz, however, this at a lower AISC of less than US$920/oz. EDV is currently capitalised at C$2.17bn (£1.3bn) versus ACA at £1.78bn. The merger would create a geographically diversified Sub-Saharan gold producer with significant growth potential from EDV’s Hounde project in Burkina Faso. With the gold price likely to be volatile in 2017, the strong cost position of both firms places them in a strong position.

]]> Oil price, Faroe, SDX Energy, And finally... Wed, 18 Jan 2017 11:39:00 +0000 Oil price

Both the Saudi Oil Minister and the head of Saudi Aramco were on their hind legs at Dav-oh yesterday, the former saying that the US supply infrastructure was ‘decimated’ and the latter confirming that the oil market would have re-balanced by the end of the first half. He also snuck in that the IPO would aim to raise around $100bn.


Faroe has announced that it has received four new licences in the recently announced APA round. Three are in the Norwegian North Sea of which one looks very like a possible Brasse extension, one is the Pabow prospect east of Shango and one is the Goanna prospect. They have also received one licence in the Norwegian Sea which contains the Canela project. These awards being in the APA round, ie Awards in Pre-defined Areas, mean that Faroe are able to pinpoint such areas and adds exploration as well as concentrating on consolidating near Brasse for example. With few commitments Faroe have been wise to pick up these blocks which underscores my favourable valuation  for the future and will surely remain in the bucket list come the end of January…

SDX Energy

My weekly VoxMarkets Podcast was about SDX Energy where management have announced that they are looking at parts of Circle Oil and an equity raise to go with it. The link is below:

VOX Markets podcast: includes Malcy on SDX Energy

And finally…

Sensational news from down under this morning where Brit Dan Evans has beaten the No 7 seed Marin Cilic…

In the FA Cup replays there was indeed giant killing going on as Sutton beat Wimbledon and Lincoln beat the Tractor Boys.

Tonight in the cup, the HubCap Stealers go to Plymouth, the Magpies welcome Birmingham City and  the Canaries visit the Saints.

]]> Cairn Energy shares set to advance another 16% says Zak Mir Wed, 18 Jan 2017 11:18:00 +0000 Cairn Energy PLC (LON:CNE) shares may be set to advance another 16%, according to technical analyst Zak Mir, who dissects the oiler’s share price chart.

Mir, in a Tip TV segment for Proactive Investors, highlighted that in early 2016 the share broke above the 200-day moving average and last March there was a ‘golden cross’ buy signal triggering an uptrend in the chart.

“That momentum has been maintained. In the current situation you’re probably looking for the share to just make a little bit more progress,” he said.

Mir says the top of the rising trend channel is as high as 280p.

]]> VSA Capital Market Movers - Hochschild Mining Wed, 18 Jan 2017 09:08:00 +0000 Hochschild Mining (LON:HOC)

Production numbers for Q4 and the full year show a robust growth in output of both gold and silver for Hochschild (HOC). Total silver equivalent ounces for the year rose 31% to 35.5m ounces on the back of a rise in gold output to 246kozs while silver output rose to 17.3mozs.  AISC costs per equivalent ounce of Ag are looking to come in at $11/oz-$11.50/oz.  Cash grew by almost US$60m to US$140m over the year.

Forward guidance is rather conservative with growth of 2mozs to a 37moz target.  AISC costs are predicted to rise about $1/oz to above US$12/oz due to increased exploration budgets and capex on the Pablo vein development.

We see Inmaculada mine is proving its production worth for the company but also is its corporate vulnerability; being its flagship operation and significant source of cashflows.  It will be interesting to see what HOC may do with its rising cash on M&A opportunities in coming months.

]]> Oil price, Tullow, Cairn, Cape, Velocys, And finally... Tue, 17 Jan 2017 09:38:00 +0000 Oil price

The above prices are slightly skewed as the US was shut for MLK day, I suspect that tomorrow will rearrange the order of things. I remain sceptical about bulls and bears sticking to their view, yesterday the Saudis said that after the May meeting the quotas may not need to be rolled over as ‘the market should have re-balanced by then’ especially as they are over cutting to make up for the likes of Libya. Cue whooping and shouting but no, the bears immediately went off saying that the game was over and the end was high, you pays your money and makes your choice.

Dav-oh starts today and all those people paying 30 grand each for the privilege cant be wrong, can they? They didnt expect Brexit or Trump and so far havent managed to fix the world in any way shape or form. They have said that you could put the richest 8 people in the world in a golf buggy and they would be worth the same as 50% of the rest of the world but do nothing about it, shame on you all….!


A nice discovery from Tullow today at Erut-1 in Kenya where the oil column was 100-125m which is indeed impressive. The well was to test the structural trap at the northern limit of the South Lokichar basin and de-risks multiple prospects. With Kenya looking better the farm-out to Total (right this time) in Uganda looks smarter and smarter.

Cairn Energy

A pre-close update from Cairn today but very little to add. The 3rd phase of drilling in Senegal is about to start with SNE-5 and 6 to be drilled at the southern end of the structure in an attempt to provide connectivity and deliverability. After that the selection process for the next wells takes place. Kraken plods on with first oil due in Q2 2017 and Catcher also looks likely to be onstream H2 2017. Here capex is $1.6bn which is $600m less than originally estimated. With $335m of cash and the RBL undrawn all looks good but after UK devex of $170m this year plus E&A of $125m those receivables will be handy. The arbitration re CIL continues and with some big cheques to write i’m sure they wish they could access some of that cash pile.


Same old, same old Cape, repeatedly delivering the goods and not always being appreciated…Today they announce a contract for the Saudi Aramco Jazan refinery in Saudi Arabia and also the scope of the contract with Daewoo on the same project has been increased. Whilst the legal matters do, I understand, hang over them, the company cannot be accused of slowing the rate of growth in the business proper and the market should be more appreciative.


The company announce a strategic alliance with Morimatsu Heavy Industry today which is intended to reduce the costs of the smaller scale GTL plants. MHI will be the preferred supplier of module engineering and fabrication services for all Velocys’ plants. I have a meeting in the book with David Pummell the Velocys CEO and look forward to a proper catch-up then.

And finally…

Wins this morning down under for Konta, Watson and Edmund with Sir Andy to come.

Valtteri Bottas signs for Mercedes on a one year contract hoping to be ‘equal with Lewis please’ and asking for the ability to race each other with no rules…

And of course it is FA Cup replay week, several tonight including Wimbledon v Sutton, the Eagles v Bolton and of course Lincoln v the Tractor Boys…

]]> Point Loma Resources Ltd looking to grow value in Alberta Tue, 17 Jan 2017 08:44:00 +0000 Chief executive of Alberta-focused oil junior Point Loma Resources  Ltd (CVE:PLX) Terry Meek runs Proactive through the firm's activity and its ambitions.
"We operate in West Central Alberta in what have typically been conventionally producing horizons. We are applying unconventional techniques to those horizons."
Looking ahead, the strategy will be a combination of further drilling out opportunities and "selective acquisitions, explains Meek.
"We still feel there's very good value in certain acquisitions in the market today before prices run up too far ahead of us."

]]> VSA Capital Market Movers - Rio Tinto Tue, 17 Jan 2017 08:25:00 +0000 Rio Tinto (LON:RIO)

Rio Tinto (LON:RIO) has announced mixed production results for Q4 2016 resulting in a robust full year result. Copper production was up by 20% YoY to 134kt meaning full year production was up 4% to 523kt, however, this was short of guidance owing to no contribution from Grasberg. This was despite strongly higher production at Kennecott and a marginal recovery at Escondida.

Iron ore shipments were modestly higher, up 4% YoY and 3% QoQ to 86mnt with full year shipments of 330mnt up 6% YoY. As well as a targeted increase in production which met guidance, RIO also benefitted from minimal disruption from poor weather. Coking coal production was up strongly by 15% QoQ and 1 % YoY to 2.2mnt although up just 4% YoY to 8.1mnt. Semi soft and thermal coal production was weak, down 13% QoQ and 3% YoY to 5.2mnt in Q4 2016 and 4% lower YoY at 21.4mnt although this was in line with guidance.

Bauxite and aluminium production was strong, with record annual aluminium production. Bauxite production of 12mnt was up 8% QoQ although down 2% YoY while full year production was up 9% to 47.7mnt, ahead of guidance. Aluminium production driven by the improved Kitimat smelter was up 7% QoQ and flat YoY to 925kt while full year production was up 10% YoY to 3.6mnt.

RIO should benefit from stronger commodity prices in Q4 2016 which should offset production weakness in copper and thermal coal and enhance revenues in aluminium and iron ore.

]]> Halifax well could be 'cherry on the cake' for Hurricane Energy Mon, 16 Jan 2017 13:45:00 +0000 Hurricane Energy Plc (LON:HUR) has now spudded the Halifax exploration well in the Rona Ridge Area in the West of Shetland region of the North Sea.

Proactive's Equity Reporter Jamie Ashcroft says: ''Hurricane's enjoyed a lot of success, shares are up around 400% this past year, mainly thanks to these positive well results and this is the fourth and final of this campaign so if it also comes off it'll be the cherry on the cake for Hurricane''.

]]> Oil price, Hurricane Energy, Independent Oil & Gas, And finally... Mon, 16 Jan 2017 13:16:00 +0000 Oil price

The week ended down a little as those who believe that quotas will be busted shouted more loudly than the believers, empty vessels and all that. The rig count actually fell, by 6 overall to 659 and in oil by 7 to 522 but the above were shouting too loudly about 9 or even 10m b/d from the USA in the future.

So now to my familiar rant, Dav-oh and all its pretentious and back slapping clap trap. I will be monitoring companies who waste shareholders money (tickets etc average €29,000 each person) and will try and find the wonderful graph that shows how badly companies perform after their Primadonna executives schmooze with other C suite grand fromages. 17th -20th if you have the 30 grand to spare and of course can find some lodgings…. The President of China is there tomorrow and Joe Biden and John Kerry have still got the White House Amex card with them at least until Friday morning when the swamp starts draining….

Hurricane Energy

Hurricane  announced this morning that it has spudded the 205/23-A well (Halifax well) which will drill below local structural closure  and then perform an open hole DST and subject to results, possibly deepen to investigate the oil water contact. The reason for all this is that the adjacent Lancaster Field possibly extends its boundary into the recently awarded P2308 licence which is contiguous to and extends North Easterly, from that discovery, indeed is is possible that it extends up to the Rona Ridge.  This will be the concluding well of this drilling programme and as such, by the time this well result is announced towards the end of Q1 of this year, have made the most significant oil find in British waters for many years.

Independent Oil & Gas

IOG has signed an MOU to buy a disused gas pipeline in the Southern North Sea for a nominal amount. After recommissioning (and a prize if anyone can think of another in the North Sea) the pipeline will provide for the evacuation of gas from the Blythe hub, the Vulcan satellites and possibly the recent Harvey discovery. It also comes with associated onshore facilities which makes sense but not as much sense as ownership confers which mean no tariff to pay and thus better economics, indeed one day they might be in a position to charge 3rd parties for its use. The company rightly suggest that this is an acquisition of strategic importance, comes for a ‘nominal cost’ and has the approval of the OGA, whats not to like.

The announcement also updates the market on the Skipper appraisal well which produced as expected 11º API oil that might be extractable but would ‘present a challenge for refining and marketing and trade at a significant discount to  the current Brent price’. Whilst there is little doubt that this will be hard work, it does have a very low wax content and is mobile in the reservoir so probably best not to rule it out altogether.

And finally…

In the USA we are getting closer to the Superbowl, to be held in Houston on 5th February, my invitation must be about to be sent out as it is getting late to ignore me… This weekend the Packers beat the Cowboys with three seconds left and will next up meet the Falcons whereas the Steelers beat Kansas and will face the Patriots to be in that in that final.

The Australian Open tennis is under way and this morning both Sir Andy and Mr Evans went through.

In the footy Chelski, Spurs and the Gooners all won easily whilst the HubCap Stealers went to the Theatre of Dreams and got a draw.

James DeGale got a draw and was probably happy to get that, he also left his two front teeth on the canvas….

And in the first cricket One Dayer England set India 350 and sat back and watched them win, not quite what they expected.

]]> Zenith Energy Ltd a 'low cost operator with big assets' says CEO Mon, 16 Jan 2017 10:33:00 +0000 Zenith Energy Ltd is a Canadian based publicly traded international energy exploration company.

Their main focus is the acquisition of large acreages in oil producing countries that offer an adequate protection of the ownership of petroleum assets by foreign investors.

CEO Andrea Cattaneo tells Proactive they're the only independent, junior oil producer in Azerbaijan.

''It's been quite an achievement to convince the national oil company that we are as good as the big names they've been dealing with for years''.      

Zenith Energy's also begun trading on London's AIM market.

]]> VSA Morning Agri Comment Mon, 16 Jan 2017 08:18:00 +0000 MPE Share Buy-back Programme

Indonesian palm oil producer MP Evans (LON:MPE) has announced a share buy-back programme.

£5m share buy-back programme

Duration of up to 12 calendar months

Programme will be kept under review and Board will make a decision in due course on whether to extend it

VSA Comment

Following its successful bid defence against Kuala Lumpur Kepong (KLK MK), one of the key concerns for us is that we may see a gradual drifting of the share price from current levels, as MPE naturally takes time to deploy its surplus cash into earnings enhancing assets.

Although fairly small, the commencement of a share buy-back programme should help address this issue and maintain the share price at around the current level, given the low levels of liquidity in the stock. Over the past 90 days, MPE has traded on average c60,000 shares a day (£350-400k).

Fellow palm oil producer REA Holdings (RE/ LN) carried out a similar share buy-back programme at the end of 2013 through to late 2014, which stabilised its share price somewhat. However, its share price fell significantly following completion of this programme.

In the case of MPE we feel this is less likely to happen, given the strength of its balance sheet, and this programme should give the company a little more time to implement its post-KLK bid strategy, including the completion of various acquisitions to support its long-term growth plans.

]]> 88 Energy shares could add more than a third in coming months Sat, 14 Jan 2017 09:00:00 +0000 The ‘King of Charts’ Zak Mir is tipping oil and gas explorer 88 Energy ltd (LON:88E, ASX:88E) to add more than a third to its share price over the coming weeks and months.

In the latest episode of the Proactive Investors Bulletin Board, Mir says: “The view at the moment is while we’re above the 50-day moving average of 2.3p we could at least retest the August resistance zone towards 3.5p.”

]]> Oil price, Trinity E&P, Andes Energia, And finally... Fri, 13 Jan 2017 10:54:00 +0000 Oil price

Another good day yesterday as news that the Saudis production was falling more than expected came out. With production now below 10m b/d they are clearly making up for any quota busters such as Iraq. Bears of the deal will clearly take it as bad news that the Saudis have to make up for others but that’s how its going to be. Better news came from China where imports in December were a record 8.56m b/d with CNPC forecasting growth of 5% + in 2017.

Trinity Exploration and Production

Even though I wrote about it recently and compared Bruce Dingwall to Superman or similar, I had to rub my eyes and check that it really was Trinity returning at 7p after its lengthy suspension. As per its RNS it really has sorted its own debt mountain and it is now hopefully manageable, it has also got enough cash to drill four wells and do some serious work on a number of existing holes in the ground. With a target of 3/- b/d thinks are definitely looking up and with Range picking up too maybe Trinidad is back on the map.

Andes Energia

Longer term readers will know that AEN has been a favourite stock for some time, a slow burner due to Argentina’s historic malaise but one that will take full advantage of Macri’s attempts to get back on a better economic footing. Today I am seeing signs that there is a deal brokered by President Macri to enable a major ramp up of production at the Vaca Muerta by getting the Government, the oil and gas companies and the labour unions together in an agreement. AEN may take time but has significant value waiting to be unlocked.

Voxmarkets Podcast

This week’s podcast on Voxmarkets covers Premier Oil and Rockhopper, if you want to listen in the link is below, I come on at 40m 10s.

VOX Markets podcast: includes Malcy on Premier Oil and Rockhopper Exploration

And finally…

This weekend sees the rugby going back to the European Champions League Cup with all the great fixtures that involves.

Cricket resumes again in India with the first One Dayer starting at 0800 hours on Sunday whilst today at a snow covered Lords, Andrew Strauss meets up with Captain Cook to try and persuade him to stay as skipper until next winters Ashes…

A big night in the ring for James DeGale who takes on Badou Jack tomorrow night…

And in the footy the big game is obviously the visit of the HubCap Stealers to the Theatre of dreams. Elsewhere Chelski go to current Champions the Foxes, they should pick up the silverware and take it home with them, the Noisy Neighbours are at the Toffees, the Gooners go to the Swans and Spurs welcome the Baggies.

]]> Oil price, SDX Energy, Ithaca, Faroe, Premier, Ophir, Wressle, And finally... Thu, 12 Jan 2017 10:06:00 +0000 Oil price

There are going to be a lot of weeks like this so get used to it! The Grand Old Duke of York would be proud of the ups and downs of the oil market mainly on the whim or rumour whirling around. Yesterday the good news was provided by the Saudis and the Russians who said that they were already increasing prices and cutting back production, mainly to Asian buyers but the strikes in the Niger Delta also steadied the ship. The EIA inventory stats were a mixed bag, crude rose by 4.1m barrels, higher than expected but products rose even more, record refinery runs were responsible for that with utilisation rates being the highest since September indicating strong demand, I hope…

SDX Energy

In what looked like a hastily prepared statement put out late yesterday, SDX announced that it ‘noted’ speculation concerning a potential acquisition and a ‘material equity raise’.  It has confirmed that it has entered into a non-binding agreement with Circle Oil for the acquisition of their Egyptian and Moroccan assets, subject to a fund raise. Clearly some on the roadshow has not understood the meaning of the phrase ‘you are now an insider’ and leaked the info.

All is not lost for SDX as this looks like a potentially very interesting deal, bought free and clear of debt, Circle has assets that would fit particularly well, especially those in Egypt. The onshore Morocco assets have needed a good shake-up and with Sound having made out so well and some signs of life at Gulfsands with John Bell having been recently appointed as MD this could be a very good deal for SDX. Obviously we will need to see how the next few days go but I am aware that the institutions are supportive and my inbox here and on Twitter shows that the retail investors are keen as well. As this moment in time I would give the benefit of the doubt to SDX, a company that is very much on the short list for the new bucket list.

Ithaca Energy

An operational update from IAE this morning, all will be revealed in the results but most things are going well here as one might expect. Production last year beat the guidance and this year is 19-22/- although Stella might improve that. Not in the short term as the start up has been delayed again but only to February but that makes no difference. The good news is that Harrier is now under way, a cheap development as it also uses FPF-1 and the GSA infrastructure. Opex is down 30% at $18 pb and net debt is falling too, this will only get better when the FPF-1 finally gets up and running. Still a top stock in the bucket list and a certainty to stay there, amongst the best in show.

Faroe Petroleum

Another very pleasing, well managed company, Faroe is also set fair for another good year I suspect. Dazzler has become Boné and is a high impact well that will be genius if it comes in, the company has also announced that a Brasse appraisal well is imminent. 2017 is set to be a ‘significant year for Faroe with a full program of exploration, appraisal, infill and early stage development’ set to keep investors happy and wealthy…

Premier Oil

Prems has also issued a trading statement, like London buses they all come along at the same time. Very little has changed for PMO though, we still wait for the debt talks to conclude but operationally things are going pretty well. Production beat the guidance although Solan looks like a walking disaster zone with production still ‘disappointing’. Catcher is still on target and Tolmount is up for approval soon just leaving Sea Lion to handle. At these industry prices Sea Lion should be profitable and as I have said before, other major projects around the world are now getting sanctioned, given how big this is for PMO they should be doing the same, although I know they will say that the bankers might say differently. Overall, Premier is looking in decent shape and subject to a lot of yeses, nos and maybes should stay with us…

Ophir Energy

Another to add to the update list for today and not much new here either, I am seeing the company soon so will update then. Fortuna is ‘on schedule’ for FID 1H 2017 but I am not convinced that Ophir will have much skin in that game when it comes onstream. Funnily enough, I imagine due to a printing error there was no CEO or Chairman’s statement in my RNS, how peculiar…


I may be wrong but I never thought that Wressle was a doubt on planning grounds, it is not a frac job as far as I am aware and so I need to chat to some of the participants before I say any more!

And finally…

Very briefly but the Saints could have done a lot of damage to the HubCap Stealers last night but won only 1-0 on the night after missing many chances.

]]> VSA Capital Market Movers - Egdon Resources Plc, Premier Oil PLC Thu, 12 Jan 2017 09:00:00 +0000 Egdon Resources (LON:EDR)

Yesterday afternoon North Lincolnshire County Council’s Planning Committee refused planning consent for the development of the Wressle Oil Field. This is disappointing for stakeholders in the licence including Egdon Resources (EDR)#, which holds a 25% WI and is operator of the licence. Permission was refused by the council over concerns that it had insufficient information on ground contamination, effect on the local community and the local economy.

Wressle is a “conventional” oil field and does not require fraccing. Therefore, this result comes as a surprise to us. EDR will now consider its options on the project including its right to appeal and we await further updates.

However, Wressle only formed a small part of our 34p/sh valuation (1p/sh) and we therefore maintain our BUY recommendation.

Premier Oil (LON:PMO)

Ahead of its FY 2016 results Premier Oil (PMO) announced an operational update with record production of 71.4kboepd in 2016 (+24% YoY), in-line with its upgraded guidance. This strong operational performance was largely driven by the acquisition of E.ON’s North Sea portfolio and the Solan field coming online. Furthermore, estimated capex for 2016 is expected to be US$690m, below guidance of US$730m. Whilst net debt reduced in Q4 as anticipated to US$2.8bn with cash and undrawn facilities was cUS$600m.

PMO 2017 production guidance for 2017 is 75kboepd before any contribution from Catcher is considered and is revised for lower Solan production due to poorer than expected reservoir performance which is limiting water injection, production uplift from works to repair this is unlikely to be added before 2018.

Catcher is on schedule for start-up later this year with total capex now forecast at US$1.6bn (29% lower than originally sanctioned).

Approval of the Tolmount gas field in the Southern North Sea is expected shortly, however, we question if PMO should begin committing significant capex to greenfield development projects whilst it is still looking to reduce its net debt. Details on its refinancing are expected shortly.

]]> Oil price, Tullow, Sundry-Wood Group-President- And finally... Wed, 11 Jan 2017 11:05:00 +0000 Oil price

Another down day as one might expect, this process is going to take some time and it wouldnt be normal if a combination of greedy hedgies and short term ambulance chasers didnt knock the market some days. The last couple of days have been all about Iraq and the extent to which they are cheating on their quota, to be fair it was obvious from the start that there would be an element of floutage and if this hasn’t been built in by the Saudis then i’m the Shah of Persia…

The API stats came out after the close and the 1.5m build was only slightly over the 1.2m guess, gasoline was in line at 1.7m but distillates were much higher than forecast at 5.5m barrels.

Tullow Oil

First the good news, I like the Uganda deal with Eni which takes away a lump of capex and probably speeds up the process, it does however take away from the potential upside for the portfolio. Indeed most of the trading statement continues with downsizing the portfolio one way or another. This is not in the plan as Jubilee is outwith their control and admittedly being paid for by the insurance Johnnies and TEN has come to a halt at 23,600 b/d net until the ITLOS ruling which may, come, 4Q of this year. Indeed, during the conference call the future of the Kenya investment was questioned, it looks as if the asset is on fast track to salesville. Tullow went into the bucket list this time last year and was in my view one of the braver calls, however it has more than doubled since then, not bad for a £3bn market cap stock but I am not so convinced that it will happen again, the jury is out.

Tullow also announced some management changes which gave the long term signal that Aidan has decided to call it a day, albeit in two years time. The excellent Paul McDade moves up to CEO and that means that Aidan will be Non-Executive Chairman for two years, words you never thought you would hear together, Aidan Heavey and Non-Executive….


Wood Group has managed to extend by another five years, with possible extensions, their framework deal with Aramco.

President has announced that it has contracted a rig for the Puesto Guardian programme, it will be mobilised in February and be under way in March. The company reaffirms its production target of 1,200 b/d by the end of the summer 2017 as forecast in the recent raise.

And finally…

The Red Devils beat the Hull City Tigers 2-0 last night in the Clueless Cup and the Saints take on the HubCap Stealers tonight.

FIFA has announced that in future anyone who pays the joining fee can turn up for the World Cup. This works with their existing policy of auctioning of the Finals to the highest bidder wherever it happens to be. Mr Infantino is certainly living up to his name and the leopard that is FIFA aint changing its spots as it pursues the quest for ever more money for the beautiful game…

Talking about selling off the family silver, it seems that the Jockey Club also needs a bit of a wallet warmer as it has decided to sell off Kempton Park to Redrow for a housing estate. Mind you, living in Mon Repose, King George Avenue does have a sort of ring abut it…

]]> VSA Capital Market Movers - Tullow Oil plc Wed, 11 Jan 2017 08:57:00 +0000 Tullow Oil plc(LON:TLW)

In an operational update ahead of its FY 2016 results, Tullow Oil Plc (LON:TLW) confirmed production was in line with its recent guidance, with West Africa averaging 65,500boepd, whilst in Europe FY net production averaged 6,200boepd.

TLW successfully brought TEN online in August 2016. Gross annualised working interest production in 2016 averaged 14,600boepd (net 6,900boepd) but in early January the capacity of the FPSO was successfully tested at an average rate of 80,000boepd over a 24 hour flow test. However, TLW now expects production from TEN to average c50,000boepd gross in 2017 as no new wells can be drilled before the ITLOS ruling in Q4 2017 with regard to the maritime border dispute between Ghana and Cote d’Ivoire.

This follows TLW’s announcement yesterday over its major farm out for 21.57% of the Lake Alberta project to Total (FP FP) for US$900m. This will leave TLW with 10% of the project, which is expected to produce c230,000boepd once complete. The deal will consist of US$200m cash with Total to pay US$700m of TLW’s remaining development costs on the project. We view this as a positive deal as it will allow TLW to repair its balance sheet with cash flow from its producing assets and not enter into another intensive capex period. Indeed net debt at the end of 2016 stood at US$4.8bn and capex is expected to reduce from US$0.9bn in 2016 to US$0.5bn in 2017.

However, this update is likely to be largely overlooked by Aiden Heavey leaving his post as TLW’s CEO to become a non-executive chairman and will be succeeded by Paul McDade (the current COO) and we expect the stock to trade a little weaker today.

]]> Cantor Fitzgerald still concerned about Tullow's debt after Uganda divestment Tue, 10 Jan 2017 15:55:00 +0000 Sam Wahab, oil analyst at Cantor Fitzgerald, says that the cash Tullow Oil (LON:TLW) will raise after selling more than two thirds of its interest in the Lake Albert project in Uganda to Total for US$900mln, is a "drop in the ocean" considering the company's huge debt pile.

"We do harbour some significant doubts over their net debt position," he says.

]]> VSA Morning Agri Comment Tue, 10 Jan 2017 08:20:00 +0000 Carr’s Group#: AGM Statement

Ahead of its AGM later today, Carr’s Group (LON:CARR), the agricultural, food and engineering group, has provided a trading update for the eighteen weeks to 7 January.

CARR continues to trade in-line with expectations (FactSet consensus: revenues of £328.5m, +4.3% YoY, PBT of £14.4m, +2.1% YoY).

In agriculture (c80% of operating profit), the division is performing ahead of expectations. Compound feed and fuel volumes are ahead YoY, with machinery sales showing signs of recovery in Q1. Retail sales ahead of expectations; UK feedblock sales ahead YoY; US feedblock sales flat YoY.

In engineering (c20% of operating profit), the division is performing below expectations, driven by a significant contract delay in the UK manufacturing business.

Net debt at 3 December 2016 was £16.9m (3 September 2016: net cash of £8.1m).

VSA Comment

CARR has once more demonstrated the advantage of its diversified strategy. As we expected, CARR reports that it is operating in an improved environment with regards to its agriculture operations, perhaps best demonstrated by the reported signs of recovery in machinery sales, typically the first sector to suffer in a downturn and the last to pick-up in an upturn. With an improved outlook for farmers in 2017, particularly those in dairy, as discussed in our last VSA Agri Monthly publication, we believe the environment will continue to be beneficial for CARR for its remaining FY.

CARR again delivered compound feed volumes ahead of the overall UK ruminant animal feed market, which fell 0.7% YoY for September and October (November and December data not yet available) and again highlighting the market share gains that the larger producers are making. 

Although there has been little weather-related boost this winter to overall feed volumes so far, it is worth noting that sheep feed volumes have posted double digit increases in every month since the Brexit vote at the end of June and subsequent devaluation of the British pound. Key to this market will be whether these significant increases continue through the peak winter and early spring period.

More important to CARR will be UK demand for cattle and calf feed, for which the overall monthly YoY production decreases are moderating but have some way to go to reverse course, due to milk production continuing to be significantly lower YoY in recent months (last available data: -7.3% YoY in November, -4.2% YTD), despite steadily increasing milk prices.

As CARR had previously flagged would happen, US feedblock sales have slowed, as low US cattle prices begin to impact producers. CARR’s new facility at Shelbyville, Tennessee, expected to open by autumn 2017, should help a return to growth in this area over the medium-term. Although US cattle prices has staged somewhat of a recovery over the last two months, they remain significantly below those seen in 2014 and 2015 and farmers will need time to adjust to what may be a new normal.

No new information on potential acquisition targets was provided following the recent disposal of its flour milling division and the €7.85m acquisition of long-term strategic engineering partner STABER GmbH, except that management continues to review suitable acquisition opportunities. With £32.5m of undrawn facilities, CARR certainly has the firepower to make significant acquisitions in the coming year and we expect it will do.

As we move towards invoking Article 50 in March, considerable uncertainty has emerged in the UK and the unknown agriculture policy post-Brexit provides uncertainty for the sector over the medium-term, despite the guarantee of similar levels of funding until at least 2020. At the recent Oxford Farming Conference, Andrea Leadsom, Secretary of State for Environment, Food and Rural Affairs, outlined some of her views on this particular issue and professed her strong support for UK farmers, but it is also clear that much of detail remains unknown. Assessing the recent commentary, it seems that post-Brexit a focus on farming efficiency and high quality production seems most likely. This should support demand for CARR’s products in the market, which are particularly focused towards this segment of the UK farming sector.

]]> Oil price, Amerisur, Petrofac, Sundry-Plexus-Genel-Aminex-Sound Energy-Chariot-Trinity- And finally... Mon, 09 Jan 2017 13:02:00 +0000 Oil price

The oil price was steady enough last week, a pretty good performance under all circumstances. It battled with a strong dollar probably likely to be made stronger, as the NFP numbers were low field but wage growth indicated some heat in the US economy that will likely be treated by rate rise anti-inflammatory treatment. Add to that a modest growth of four oil rigs to 529 and a bearish reading from NYMEX  that in WTI money managers had cut their net exposure and you have a reasonable week. Expect the bears to start whinging about quotas not being adhered to any time soon but we have already had three of the biggest exporters cutting output and raising prices which is not a bad start. Remember that Russia is a good example of a country that cant turn on and off like the Saudis can.

Amerisur Resources

An update from the Platanillo-24 infill well which is located at the most northern developed lobe of the field. Again drilled under time and budget (under $2m), the well logged the reservoir section and has initially indicated the presence of 67.5 feet of gross oil and 38 feet of net oil in the U sands formation and 14 feet and 8 feet respectively in the T sands. There were no N sands here, as expected and it will be developed for commercial production from the U sands into Pas 3N. Meanwhile the rig heads north to Pad 2N to drill the Platanillo-22 appraisal well subject to some local social protests. Continued good progress here and eventually more for the OBA pipeline for exports.


PFC has announced a $600m contract at Salalah LPG, the gig, which will last 36 months is a lump-sum contract for the LPG unit and other facilities such as storage and jetty capacity. Having had an indifferent run last year I am expecting some contracts to materialise although after a recent meeting with the new CFO I am not running before walking and some contracts will have been lost permanently. The mood at PFC has undoubtedly changed for the better but Mr Cochran is pursuing a relentless war on costs, although my suggestion of taking money off the table across the board at IES wasnt part of the plan. I dont expect any major change in strategy, PFC is hunkering down and the group should pick up more orders soon, cash generation should remain positive and dividends do after all have to be paid, indeed delivery is most important and if growth cant be found, the value for shareholders can always be paid back…


Plexus has announced a four year framework agreement with Centrica in the Northern North Sea, it already supplies these but this makes the arrangements more solid.

Even Genel have come to the party with what looks like a half decent discovery at Tawke with 3,800 b/d at the Peshkabir-2 well.

Aminex has told us for some reason that drilling continues in Tanzania…

And Chariot has seen the ENI deal being ratified which is good but news already mostly in the price. Whilst I am full of admiration for Larry and his team, I am beginning think that with nothing to drill at all this year it may be dead money.

And Trinity has slipped the chains of those darned lenders and I am very much looking forward to welcoming Bruce and the team back into action.

On Friday I gave an interview to Proactive Investors following Sound Energy’s news from Badile, the link is below.

Proactiveinvestors interview: Sound Energy’s Badile project “ticks a lot of boxes”

And finally…

It was FA Cup weekend and few shocks, fielding a weakened team and drawing or losing does not constitute a shock so the Cherries and the HubCap Stealers have no hiding place. Most of the top teams are in the hat this evening including the Foxes, who beat the Toffees and Hull City Tigers who beat the Swans, the Canaries got a good draw against the Saints….

The ITV coverage of racing is taking us back to the dark ages and furthermore when it relegates racing to  ITV 4 having had it on normal ITV initially it shows just where racing fans are being placed….If you had it on the planner you missed the show….

And thank goodness for baby Rooooooooot who arrived at the weekend meaning that dad Joe could jump on a plane and be ready for the first one dayer in India on Sunday. As of now it is Joe senior who will be up all night being sick and poorly…

]]> Can Chariot Oil & Gas shares head back up to 12p? Zak Mir thinks so Mon, 09 Jan 2017 11:35:00 +0000 Shares in Chariot Oil and Gas PLC (LON:CHAR) are set to climb again, with technical analyst Zak Mir tipping the stock to re-test the 12p mark it got close to in September last year.

“We’ve been in a trading range between 6p and 12p and I expect that range to continue,” Mir explains in the latest Tip TV Proactive Investors Bulletin Board segment.

“The 200-day moving average is rising at the moment to 7.7p and while we’re above that, re-testing the top of the range at 12p looks to be the favourite scenario.”

]]> Sound Energy’s Badile project “ticks a lot of boxes”, says Malcolm Graham-Wood Fri, 06 Jan 2017 11:55:00 +0000 Oil industry analyst Malcolm Graham-Wood joins Proactive Investors to discuss Sound Energy PLC’s (LON:SOU) portfolio of assets.

He talks about the progress Sound is making at Badile as well as the potential of the Italian gas project, telling Proactive that “it ticks a lot of boxes”.

]]> Oil price, Sound Energy, Cape, Sundry-Tullow-Plexus- And finally... Thu, 05 Jan 2017 11:38:00 +0000 Oil price

Another good day for the oil price as the KPC confirmed that it was cutting production in January as part of the Opec agreement. Further good news came from Bloomberg as their survey showed that in December Opec output fell by 310/- b/d to 33.1m b/d. Another vaguely positive number was that US car and truck sales last year were a record 17.555m units, exceeding forecasts. It is interesting to note that whilst the millions of cars made in Mexico for the American market save a considerable amount of tax, they have also contributed to significant destruction of the domestic car industry and the jobs that go with it. Free traders might not like it, but if The Donald is going to revive the rust belt he may decide that the 750/- jobs created in Mexico should be better recreated in the USA…

The API stats came out late as usual and were rather obfuscating as usual at this time of the year, a draw of 7.4m barrels looked highly encouraging against forecasts but a build of 4.3m in gasoline and 5.2m in distillates was worse than expected. The EIA numbers out later should put them into some sort of perspective.

Sound Energy

A Badile update from Sound this morning where all appears to be going according to plan. The ground works are complete, the conductor pipe was set last week and the rig has been mobilised. Spud date is now March and this long awaited well will be underway albeit later than expected but it is in Italy after all…Having said that the delay hasn’t made the well any less meaningful, with a potential 85 Bscf of gas and 10 mmboe of condensate as net best-case prospective resources, a success here would still be almost as transformational as Tendrara has been.


Cape clearly put the burners on at the end of November, I have just re-read the trading statement of 18 November in which trading was described as being ‘slightly ahead of expectations’. According to today’s update trading is now expected to be ‘materially ahead of expectations’ due to ‘Additional work scope awarded at the Chevron-operated Wheatstone natural gas project’ and to be fair a strong performance in Asia-Pacific. The company has also felt able to say that ‘This improvement in performance is supported by strong cash generation with a consequent positive impact on net debt’. Only the good lord knows what might have happened by the time of the results which are coming out during the Cheltenham Festival…

Cape remains one of my top picks, like most followers I was rather put off by the announcement about the insurer PL industrial disease claims situation, which appeared to worsen last year and the company had to admit that the worst case scenario might threaten the divvi. (There is nothing in today’s release about this)  If one can put that to one side it is clear that the excellent management team continues to deliver and then some and in what has been a difficult environment has come through with flying colours.


Tullow Oil has announced that CFO Ian Springett is taking extended leave of absence in order to undergo medical treatment. Finance VP Les Wood steps up to the plate and I wish Ian all the very best and hope to see him back again fully fit before too long.

Plexus has announced that Masirah has awarded them a follow-on contract  for a second well offshore Oman. This contract is worth  $285/- and may extend again as there is potential for a third well in the drilling programme.

Two lots of interviews below, firstly I did a Vox Markets Podcast earlier this week talking about the recent Pantheon news, here is the link.

VOX Markets podcast: includes Malcy on Pantheon Resources

Also just before Christmas I did three interviews for Interactive Investor they can also be seen on these links.

Interactive Investor interview: Favourite oil major for 2017 named

Interactive Investor interview: Is oil sector a buy in 2017?

Interactive Investor interview: AIM’s most exciting oil stock for 2017


And finally…

Only the game at White Hart Lane needs to be discussed as the 13 run unbeaten run by Chelski was halted as Spurs and Deli Ali beat them 2-0. As I said yesterday that top of the table is getting mighty congested and will take a breather this weekend for the first round proper of the FA Cup.

]]> Still more upside to Ithaca Energy despite “great gains” in 2016 Thu, 05 Jan 2017 10:40:00 +0000 There is still more upside to Canadian oiler Ithaca Energy Inc. (LON:IAE) according to chartist Zak Mir, who thinks shares could add another 10% in coming weeks.

Mir is tipping the North-Sea focused group to continue its rise after almost quadrupling its share price last year.

“[We’ve got a] rising trend channel from the beginning of last year and that’s got its resistance line up to 110p, so there could be a bit more upside there even though we’ve already seen great gains,” the analyst claims.

“You would’ve thought that even if there is a pullback to the low 90s it would be a decent buying opportunity.”

]]> VSA Capital Market Movers - Metal Tiger Thu, 05 Jan 2017 08:18:00 +0000 Metal Tiger (LON:MTR)

Metal Tiger (LON:MTR) has announced that it has appointed Alastair Middleton as a Technical Director to its Board. He has 27 years of experience in both underground and open pit operations as well as in financial markets. Having spent 4 years at Goldfields of South Africa he worked for 14 years for Datamine International. He is a qualified Competent Person for gold, base metals, coal and industrial minerals.

We reiterate our Buy recommendation and 5.68p/sh. target price.

]]> LGO chief hails start of new drilling campaign after tough 2016 Wed, 04 Jan 2017 12:23:00 +0000 Neil Ritson, chief executive officer at LGO Energy PLC (LON:LGO) talks to Proactive Investors about the company's plans to drill its first infill well at the Goudron field in Trinidad after it obtained permission from the authorities.

"We should contrast the start of 2016 with now" he says. "This is the first of a programme of wells into the shallow Mayaro formation," he explains, adding he would expect to announce that drilling is underway in February.

"I look forward to a much brighter year both for the sector and for LGO specifically in 2017," he concludes.

]]> Centamin shares must do this one thing to hit 200p Wed, 04 Jan 2017 11:50:00 +0000 Shares in Centamin PLC (LON:CEY) have held fairly steady between the 135p and 145p mark over the past few months since coming down from their August highs.

“The shares peaked out in August just above 180p, [falling] back towards the 200-day moving average around the 135p level. This should be the support area,” Mir tells Proactive.

“We’ve also got an uptrend line which has been in place since February last year heading towards 120p. So basically, while above 120p we should head back towards the top of the triangle at 160p.

The ‘King of Charts’ Zak Mir reckons the Egypt-focused gold miner’s stock can even break through the 200p barrier if they manage to do this one thing.

“A weekly close above 160p is really required to get the big target towards 200p and beyond, which clearly the gold bugs will be looking for.”

]]> More upside to Drax despite recent rally Wed, 04 Jan 2017 10:15:00 +0000 Power station operator Drax Group PLC (LON:DRX) has added more than a third in recent weeks after the European Commission approved a key subsidy contract from the UK government at the beginning of December.

Despite the surge, technical analyst Zak Mir tells Proactive that the charts suggest there is more to come from the stock.

“Even though the shares are up already quite a lot over the recent past, it looks like there could be a bit more upside towards the top of a rising trend channel heading up towards £4.25,” Mir explains.

“That target is valid while we’re above the £3.50 to £3.60 area.”

]]> Oil price, Range Resources, And finally... Wed, 04 Jan 2017 08:30:00 +0000 Oil price

The strong dollar hit the crude price yesterday although traders reported some selling of WTI as it hit the landmark $55 level, not seen since June 2015. The US economy looks like it might benefit from some straight talking from the President-elect to the motor industry…

Range Resources

A Trinidad update this morning from Range and the good news just keeps on coming from the country. Exit production rate at the end of 2016 was over 800 bop/d, up 40% from the year before and  beating expectations. The GY 681 well looks good as log evaluations indicate 230’+ of pay and will go on production testing this month. The QUN well completed in November has already gone into production which will have helped that exit figure as well. Finally, in line with expectations, the Morne Diablo Water-flood has commenced on schedule another piece of good news. Despite having had a mountain to climb it seems that the company are delivering on promises made and  shareholders look like they may be rewarded for not insignificant patience, watch this space.

And finally…

Watching the Cherries v the Gooners last night and one knew that the equaliser would come after such a battering, almost a carbon copy of the game against the HubCap Stealers…Spurs are on tonight against Chelski…

And Hull City Tigers have lost patience with Mike Phelan and to be honest he is best out of there, if the new manager expects to get any dosh from the owners he or she is more deluded than they think they are…

]]> ‘Innovative’ Plastics Capital a “sound” investment Tue, 03 Jan 2017 13:30:00 +0000 Niche plastics group Plastics Capital Plc (LON:PLA) is a “sound” investment according to Capital Network’s analyst Andy Brown.

Brown praises the company’s balance sheet and he’s also fond of the management team, too.

“What they have demonstrated is that they’re able to find the right deals and see them add value,” he says.

He likes the fact that Plastics Capital is coming up with new ideas to try and rock a mature, long-established industry.

“I like the idea that they’re actually driving innovation. You want companies that are working in an existing big marketplace and trying to push through positive changes,” Brown explains.

]]> Enquest still a “solid” bet but the best has been Tue, 03 Jan 2017 10:20:00 +0000 The best may have been and gone for oil and gas producer Enquest Plc (LON:ENQ), but it still might be worth a gamble says Zak Mir, who reckons the stock could another 10% or so.

In the latest Tip TV segment, Mir says: “The best of the move in the recent past has already been achieved, [but it is still] a solid looking situation both technically and fundamentally.”

“We had the breakout through 30p at the beginning of December and really it’s been up, up and away ever since.

“It looks as though we can head up towards the top of last year’s trend channel of 50p while we hold above 40p.”

]]> National Grid shares tipped to creep back towards £11 Tue, 03 Jan 2017 09:55:00 +0000 National Grid PLC (LON:NG.) could add another 20% in coming weeks according to chartist Zak Mir, who has hailed the “good set-up” of the company.

Mir tells the Tip TV Proactive Investors Bulletin Board that the gas and electricity firm wasa ‘technical buy’ before the sale of its UK gas distribution business made it a ‘fundamental buy’.

The technical analyst now expects the stock to re-visit the £10.70 no seen since October.

“We’re looking for a break in the 50-day moving average at £9.59 to take us back towards the 200-day line at £10.70,” he explains.

]]> Dollar-earner BP could rally in 2017, claims technical analyst Mon, 02 Jan 2017 07:35:00 +0000 The stage could be set for oil giant BP plc (LON:BP.) to rally in the New Year given the strong US dollar and rising oil price, says the King of Charts Zak Mir.
“We may not believe that OPEC can hold everything together, but at least the oil price has stabilised,” Mir says in the TIP TV Proactive Investors Christmas special.
“BP has underperformed its peers and it’s had its issues, but…I’m looking for it to go over £6 over the next year.”
“With an extra [US interest] rate hike on the way allegedly, dollar earners like BP should do that much better as well,” Mir adds.
]]> Cantor’s Sam Wahab reflects on 2016’s top oil stocks and gives top picks for 2017 Tue, 27 Dec 2016 07:30:00 +0000 Speaking with Proactive Investors Stocktube Cantor Fitzgerald oil and gas analyst Sam Wahab reflects on a mixed 2016 and gives us some of his top picks for the New Year.

He talks about 2016 winners such as Ithaca Energy (LON:IAE) and SDX Energy Inc (LON:SDX), as well as Hurricane Energy PLC (LON:HUR) and Sound Energy PLC (LON:SOU).

Looking forward to the coming year, he highlights his ‘buy’ recommendations for 2017.

]]> Oil price, Rockhopper, Sundry- Cape- RockRose Energy- Falcon-, Aminex/Solo, And finally... Thu, 22 Dec 2016 11:59:00 +0000 WTI $52.49 -81c, Brent $54.46 -89c, Diff -$1.97 -53c, NG $3.54 +28c

Oil price

Just as I said that the inventory stats would remain helpful we got one that rather unsettled the market. With the EIA showing a build of 2.3m barrels after an API draw and forecasts of a draw of around 2.4m the market was flummoxed especially as refinery rates were up. It turns out that imports had a big week and indeed adding to the confusion there were substantial draws in gasoline and distillates. Finally Libya announced the gradual opening up of pipelines but nothing that can really rock the Opec ship at the moment.


I had a very useful update with Sam and Fiona at RKH yesterday, following their recent update I wanted to find out how things were going. It is easy to use the debt trouble that Premier are in to write off the Sea Lion development but that would be far too broad brush an attitude. Of course it is true to say that PMO have their minds on other things at the moment but that doesn’t mean that RKH cant get on with the day to day work in progressing the FEED requirements and with continually updated economics it is genuinely still getting cheaper with life of field costs of $35 pb and a phase 1 break even cost of $45. I get the strong impression that there are potential partners out there and with such excitement around Exxon’s Liza development in Guyana and the Cairn find offshore Senegal it would be odd if this billion barrel prospect with capex to first oil of $1.5bn didnt attract industry interest.

But RKH has diversified into the Greater Mediterranean and from Italy and Egypt is now producing around 1,350 boe/d which  with increased gas prices makes a meaningful contribution to G&A costs. Indeed costs across the board are falling and with the merger of the Salisbury and London offices will fall further next year. RKH is continuing to look at other opportunities in the Greater Med and I wouldnt be surprised if they did another deal in the area, indeed North Africa has proved to be of significant industry interest lately with high value production and exploration upsides. There are always some worries about payments in Egypt but given the recent IMF loan and floating of the Egyptian Pound it looks like the payment situation in Egypt should improve in 2017.  The Ombrina Mare case continues with the company attempting to get compensation and damages from the Italian Government.

Rockhopper still has a valuable asset in Sea Lion and with the significant cut back in capex in the last two years has a project that stacks up every bit as well as other international ones and probably better. With production from the Greater Med and cash of $80m at the upper end of guidance, RKH looks decidedly attractive with a market cap of £103m.


Cape has announced a five year contract extension with EDF for support on its coal and gas portfolio which is a useful win at this time.

RockRose Energy has announced that it has signed an agreement with Maersk Oil for non-operating interests in Wytch Farm (7.43%), Scott (5.16%) and Telford (2.36%). The shares will remain suspended until final conditions have been satisfied.

Falcon has announced that the final results from the extended production test at the Amungee NW-1H well were very good coming in at 1.11 mmcf/d over the 57 days and will be a useful determinant for commerciality. Hanging over Falcon of course is the moratorium on unconventional hydrocarbons but if one can assume some sort of settlement Falcon is as cheap as it gets.

And Aminex along with Solo has spudded the Ntorya-2 well in Tanzania, an appraisal one should get the results early in 2017.

And finally…

After the rather disappointing test series in India captain Cook is looking a tad isolated in his position. With many months before the next test match there is no reason to do anything silly right now so I would see how things look in the spring.

]]> VSA Capital Market Movers - Metal Tiger Thu, 22 Dec 2016 08:20:00 +0000 Metal Tiger (LON:MTR)#

Metal Tiger (LON:MTR) has announced that it has today received High Court approval to cancel its share premium account alongside the cancellation of Deferred Shares. In the event of an exit from one of MTR’s multiple projects this would enable the possibility of a dividend payout to shareholders.

Whilst this does not alter our outlook this is a positive development, in our view, which gives MTR greater flexibility.

We reiterate our Buy recommendation and target price of 5.68p/sh.

]]> Oil price, SOCO, Sirius Petroleum, And finally... Wed, 21 Dec 2016 10:41:00 +0000 WTI $53.30 +24c, Brent $55.35 +43c, Diff -$2.50 -30c, NG $3.26 -13c

Oil price

Trading continues to quieten down ahead of the Christmas break but the inventory figures should remain reasonably supportive. The API reported a 4.2m draw yesterday and the market expects something similar tonight from the API. Gasoline futures, often strong at this time of the year have also risen as retail demand picks up and the API stats showed a bigger than expected 2m barrel draw in gasoline stocks. Iran have entered the party of those proving they are cutting production by announcing lower January liftings and therefore sales to clients.

Proving that he can still throw a spanner in the works, Barry has, along with Trudeau Jnr, set a ban for arctic drilling, part of a series of scorched earth policies he plans to implement before he leaves the White House.


SOCO announced yesterday that it had received $10m from Daqing as part of the proceeds of the sale of its Mongolian assets, there is no sign of the remaining sum but SOCO plan to chase for it. The two TGT infill wells have both encountered hydrocarbons and are being analysed which is further good news. Readers know that I have long been positive about SOCO, with reservations about some of its African portfolio, and with cash of $90m odd and a strong balance sheet, not to mention a trophy asset in the Far East makes some E&P companies look shabby. I hope to catch up with the company in the new year, which is well overdue to see if I can identify any plans going forward.

Sirius Petroleum

I have been keeping an eye on Sirius as it builds its position in Nigeria, an area that I am not the only person to mistrust. Sirius is however, continuing to build its Vendor Finance Consortium and recently announced that it had signed an Integrated Services Agreement with Schlumberger for a multi well campaign in its shallow water offshore concession in Nigeria. Schlumberger will provide a comprehensive package of products and services for the Ororo field starting 1Q 2017. The company also announced that it raised $1m through an oversubscribed placing which keeps the company ticking over and pays the G&A. I expect to hear more from Sirius next year and whilst the venue is far from stable if San Leon can do it then so can Sirius…


I would like to apologise to all those of you who have sent emails in the last week or two, most of which are yet unreplied to. Whilst I cant promise to reply to every one I do try to briefly if I can but it has been so hectic lately there are a lot of unreplied to messages which I will try to get around to before Christmas!

And finally…

A short retirement for Massa as he returns to Williams only weeks after retiring as Bottas signs a contract at Mercedes after Niko abruptly called it a day.

]]> Oil price, Rockhopper, Amerisur, Faroe, And finally... Tue, 20 Dec 2016 10:04:00 +0000 Oil price

The only major item of note yesterday was a narrowing of the discount of WTI to Brent, this  came partly as traders feel that the the UK pipeline reopening brings more Brent to the market and slightly weakens the relative prices and partly as the gap has simply become too high. Apart from that with Christmas approaching traders are quietening down and leveling their books, also holidays are being taken early, something I can corroborate if out of office replies to the blog yesterday are to be believed….


An update from Rockhopper whose shares have been unfairly treated in recent weeks, the market tarring them with the Premier uncertainty brush. Today RKH show us that economic production from Egypt and Italy is 1,350 boe/d with realisations up from €0.12 to €0.18 which is handy enough. The company are making significant progress on Sea Lion through progress on the FEED with much improved economics giving an updated FDP, indeed life of field costs on phase 1 are now as low as $35pb.  Whilst on the Falklands the insurance settlement on the Isobel Deep fiasco resulted in RKH getting a net payment of $49m which seems ok under the circumstances.

In Italy the Ombrina Mare nonsense has resulted in the company going to arbitration, dont hold your breath for a settlement.  Overall costs are coming down still, Italy headcount is now down 50% and in the UK the Salisbury office is to go, with the London office now the only one left open. With $80m of cash on the balance sheet the shares are ludicrously cheap but I do understand the mechanics of the Premier/Sea Lion situation which is dominating sentiment. Having said that, if you compare Sea Lion with the Cairn/Far discovery offshore Senegal, and I think you can, Woodside, or anyone else for that matter would be better placed to farm-in in the Falklands on pure value grounds. More on RKH after I have seen the company tomorrow.


AMER has announced an acquisition of a couple of assets in Columbia from Talisman. They are taking the remain 50% and operatorship of PUT 30 and a 40% WI in PUT 9 at an ‘immaterial’ cost. This is the sign of the OBA cluster policy in action and at negligible cost, strengthens the asset portfolio by being the main player in the area. Amer shares are well below what I value them at and have suffered disproportionately to the sector, I would expect this to be re-balanced in due course as the local issues are sorted.


We have been waiting for the announcement of the new debt arrangements for a while and so today’s announcement comes as no surprise. With their extremely strong position a new $250m RBL + $100m accordion and a NOK 1Bn Norwegian debt facility +NOK 1/2bn Accordion  is just what the doctor ordered and concludes a highly successful year for the company.

And finally…

Win those games you might drop points in and you are halfway to the title and last night the HubCap Stealers nicked the three points with the only goal of the match in minute 95…

England are making hard going of chasing nearly 800 runs, as I write they are 190-4…

]]> Greater Lancaster area “exciting”, says Hurricane Energy boss Tue, 20 Dec 2016 09:40:00 +0000 Hurricane Energy PLC (LON:HUR) chief executive Robert Trice tells Proactive Investors that the Greater Lancaster area is an “exciting” area to be in.

The firm said on Monday that its Lincoln oil discovery is likely to be larger than first thought after it uncovered a “significant” oil column outside the structural closure.

“[An original well drilled by Arco] was the reference point and what we found was as we drilled past that depth we were still in oil. We drilled on another 168 metres deeper than in the Arco well,” Trice explains.

“This gives us high confidence that other ceiling faults further along the Rona ridge will also be present which helps us in our exploration de-risking.”

Trice also touches on the Halifax well, which is located on the same Rona ridge as Lancaster.

“That really is an exciting well. The whole objective of the well is to demonstrate unequivocally that there is mobile oil below the structural closure.”

]]> VSA Capital Market Movers - Goldplat plc Tue, 20 Dec 2016 08:19:00 +0000 Goldplat (LON:GDP)

Goldplat (LON:GDP) has announced that it has received a renewed license from the Ghanaian Government to purchase and deal in gold. The new license is valid for three years and its receipt was expected given GDP’s long operating track record in the region.

The terms of the new license include a 5% royalty on all minerals and a commitment to install an additional elution plant as previously announced. The timeframe stipulated in the license agreement is that the plant should be commissioned by June 30 2018, in line with our expectations. The additional capacity will enable GDP to progress with its strategy of sourcing additional feedstock from overseas and expand the group’s gold output.

The receipt of the license enables a small inventory of by-products which require further processing outside of Ghana to be shipped which will positively impact earnings, most likely, in H2 FY 2017.  Despite the recent weakness in the gold price, the shares have remained supported and within their recent trading range and we continue to expect the turnaround at Kilimapesa to support earnings in FY 2017.

We reiterate our Buy recommendation and target price of 11.2p/sh.

]]> Oil price,BP, Hurricane, Aminex/Solo, And finally... Mon, 19 Dec 2016 13:45:00 +0000 Oil price

A modest end to a tumultuous week and oil prices have pretty much kept to the highs after the Opec deal was announced. With a strong dollar after the Fed meeting and a few pessimists doubting the group’s ability to hold the deal together, that looks good enough to me for the time being. My long held year end price of $60 for Brent looks like by hook or by crook it may not be far away although I have been tempted to move it down often enough since May! The rig count was up, as expected and this week saw general rigs up 13 at 637 and oil units up 12 at 510, expect more on this front.


BP has announced that it has farmed into Kosmos’ acreage in Mauritania and Senegal. The spoils include the huge Tortue gas field and comes at a price of $1bn in exploration carry. Kosmos gain from BP’s deepwater exploration know-how and BP gain from Kosmos’ exploration expertise. BP has also announced that it has done a deal with ADNOC  for its ADCO onshore concession for $2.3bn in BP shares, clearly BP are starting to open up the wallet a bit if you add these to Mad Dog 2 which is now going ahead.


Yet again more success for Hurricane as the good Dr Trice returns from the rig bearing gifts. This time it is the well result from Lincoln where an oil column of 660m+ has been found which is even bigger than Lancaster, hydrocarbons were found at TD which is why they drilled deeper.  This is another ‘significant fractured basement’ discovery as the company put it and the key oil down to (ODT) @520m TVD below structural closure which is 168m TVD below the ODT in the old Arco well which is important as it was on the flank. The well was not tested, as expected, but I have a shrewd feeling that the API might be similar to that found at Lancaster, even though the Western transfer fault seal providing the barrier between the two was identified.

The first piece of good news to draw from this is that to me this has major implications for Warwick and that isnt even on the list to be drilled yet, but total reserves are adding up all the time. As a rough and I think conservative guide I am now using 500m barrels for Lancaster, 400m for Lincoln and will sit with 250m for Halifax which I think is the pre-drill estimate plus something for Warwick. The rig is in the process of P&A and will go to Halifax this week with the intention of spudding at the weekend, much I imagine to the chagrin of Lady Trice as the CEO will be aboard… If weather permits they may well actually test this one, if that is successful then maybe the testing kit will be taken off and they may go deeper with wireline logging.

After the Halifax well the hard work on the development starts, and of course the discussion about how to fund it will be at the fore. Given that the number looks like being around $400m, all options are being explored but undoubtedly a significant portion will be debt. The remainder might be equity of a farm-in or even a mixture depending on the circumstances. I understand that that there are new faces seen in the data room but farming out the prospects is no certainty, indeed if I was an equity holder and having come so far, I would want to participate one way or another.

Being aboard the good ship Hurricane has been exciting and it looks as if there is plenty of news to come after Christmas. Expect the Halifax result, the FDP, the EPS approval and sanction as well as the CPR of Lancaster to come in the first quarter just for starters. The show has only just begun, Dr Trice and his amazing fractured basements are here to stay…


Also good news from Tanzania where the Government has agreed an extension on the Nyuni Area to 27/10/19, the company also announce that drilling operations are underway and the Ntorya-2 well should spud ‘in the next few days’. All this comes as rumours of a funding by Solo is being considered which isnt exactly needed but probably wouldnt be turned away.

And finally…

The cricket is only now of interest as the final test match turns into a war of nerves for England. Batting is obviously extremely easy as India showed by declaring at 759-7 this morning after Nair got his 303.

The football at the weekend was fairly predictable, in the big one at Middle Eastlands the Noisy Neighbours saw off the Gooners 2-1 but with Spurs edging Burnley 2-1 and the HubCap Stealers at the Toffees tonight for the Giro derby expecting to win little changed. The Baggies lost 0-2 to the Red Devils and the Hammers contrived an unlikely win against the Hull City Tigers.

And finally, shame if ever any more was ever needed on FIFA as they fine the home countries £80,000 each for wearing poppies, lets hope they all enjoy spending the money the disgraced bunch of xxxxxxxs.

]]> Hurricane Energy plc's Lincoln drilling confirms portfolio's billion barrel potential Mon, 19 Dec 2016 13:42:00 +0000 Today's news from Hurricane Energy plc (LON:HUR) really proves the group has a significant asset base west of Shetland and reiterates the oiler's previous view that its portfolio could host a potential billion barrels.
So says FinnCap analyst Dougie Youngson after the firm  told investors its Lincoln oil discovery was  probably larger than first thought and that a ‘significant oil column’ estimated at 660 metres had been found.
It could add another 3 or 400mln barrels to the Hurricane portfolio, says Youngson.
The priority now is to get the Lancaster field on stream and the early production system up and running, said the analyst, so that Lincoln and any future discoveries can be tied into a central infrastructure hub, he said.
The rig will next go on now to drill the Halifax prospect, while the firm is working hard to get to field development plan status by the middle of next year.
"We should be seeing the field development plan being submitted by the middle of next year and then hopefully being signed off by the government in due course," said Youngson.

]]> VSA Morning Agri Comment Mon, 19 Dec 2016 08:27:00 +0000 NWF H1 Trading Update

UK specialist agricultural and distribution business NWF Group (LON:NWF) has announced a trading update for the six months ended 30 November 2016 (H1 2017).

Trading was lower YoY in H1 due to a weaker Q1

However, trading has increased in recent months and NWF remains on track to reach FY expectations for performance and net debt

VSA Comment

DEFRA data shows that overall UK ruminant feed production fell 3.0% YoY for the first five months of NWF’s H1 period (data not yet available for November; Q1 period was -4.7% YoY) as demand was impacted by lower milk prices and a smaller UK herd size.

Despite this overall market decline, NWF reports that for the first five months of its H1, its animal feed production actually increased 1.5% YoY. This reflects the trend that we have been discussing throughout the milk price downturn, whereby the larger feed producers, such as NWF, have been gaining market share at the expense of the smaller players.

Looking forward, UK milk prices have been steadily increasing since the middle of the year. There is now evidence that this is being translated into increased animal feed consumption.

Total UK ruminant feed production fell just 0.5% in October (last data available) and although this was against our expectations for an increase YoY, this is much better than the 5%+ monthly falls we saw earlier in the year. We believe the UK market will move into monthly YoY increases in the near-term, which will translate into increased sales volumes for NWF in H2 and into its FY 2018.

In terms of its input commodities, a typical basket used for compound feed has reportedly increased c20% since March. This has been reflected in increased compound feed costs for UK farmers. NWF reports that it has increased its prices twice during the year, in-line with competitors, so margins should be maintained.

NWF’s food division continues its solid performance with its Wardle warehouse fully utilised and high service levels maintained.

NWF’s fuel supply business was impacted by warm weather and lower demand for heating oil through summer and early autumn but reports a strong performance in November. FY performance in this division will depend on temperatures in the remaining winter months and resulting demand for heating oil.

In general, the most important factor for all of the UK agricultural input companies is whether winter extends into March, a factor which has historically provided the strongest boost to animal feed purchases and heating oil demand.

NWF remains trading in-line with market expectations. Current FY 2017 (Y/E May 2017) FactSet consensus is for revenues of £487.3m, +4.6% YoY, with an adjusted PBT of £8.3m, flat YoY.

]]> Nighthawk Energy technicals 'starting to feel friendly' says Mir Fri, 16 Dec 2016 11:32:00 +0000 US oil and gas group Nighthawk Energy PLC (LON:HAWK) has been helped by a cash raise in August and a settlement of a long-standing legal dispute.

As a result, the ‘technicals are starting to feel friendly’, says Zak Mir, chart analyst at Tip Tv.

He tipped the shares to hit 1.7p by early 2017 and as the shares have traded at or above the 200-day average since September that advice still holds.

]]> VSA Capital Market Movers - Sula Iron and Gold PLC and Independent Oil & Gas PLC Fri, 16 Dec 2016 08:13:00 +0000 Sula Iron & Gold (LON:SULA)

Sula Iron & Gold (LON:SULA) has announced that it has raised a further £0.3m at 0.21p/sh. from the open offer which in conjunction with the prior placing, also at 0.21p/sh. brings total proceeds to £1.47m. Consequently a total of 702m shares will be issued. In addition, SULA has announced that in lieu of accrued fees SULA will pay certain directors of SULA and its wholly owned subsidiary a total of 8.8mn shares.

SULA is now in a strong position to commence its exploration programme focusing on the targets at Sanama Hill and the larger Eastern Target.

We reiterate our Speculative Buy recommendation and target price of 1.7p/sh. which was previously adjusted to reflect the full dilution of the share placing and open offer.

Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (IOG)# has announced an increase to its internal management resources estimate for the Elgood and Harvey discoveries, in its Southern North Sea portfolio, after technical work was carried out across the licences. Therefore, the P50 resources at Harvey have increased to 113BCF (previously 16BCF) and at Elgood P50 resources have increased to 22BCF (previously 11BCF).

Further to this IOG has agreed both a three month extension to the Harvey licence and a two year extension to the Skipper licence.  We maintain our BUY recommendation on the stock.

]]> Grand Gulf Energy well placed as drilling advances at Boleslaw well Thu, 15 Dec 2016 14:41:00 +0000 Managing director of Grand Gulf Energy (ASX:GGE) Mark Freeman told Proactive the group was very well placed looking ahead.
The firm, with a market cap of A$5.2mln has revenues from three producing fields, which generate over US$100,000 a month after costs, including royalties.
It has funding, production revenues, reserves and upside opportunity, he added.
It comes as the group's Boleslaw No.1 well was started earlier this week - and is expected to take just over three weeks to complete to a depth of about 1,500 metres.
The firm is targeting two zones - at 900 metres and 1400 m. The prospect has a best estimate unrisked prospective resource of 87 billion cubic feet of gas.
On supporting infrastructure in the event of successful drilling, Freeman also noted that: "Poland has a very extensive pipeline network and the joint venture will have a choice of which system to use - the closest is only 10km away.
"We also have the opportunity of generating electricity on site and selling the energy into the European grid," he added.

]]> Trinity Exploration shares must do this one thing to spark turnaround Thu, 15 Dec 2016 11:35:00 +0000 Trinity Exploration & Production PLC (LON:TRIN) shares need to break above its 50-day moving average if they’re to have any hope of recapturing its glory days, claims technical analyst Zak Mir.

The stock has been on a downhill slide, one that Mir reckons could continue unless it does break through that barrier.

“We’ve had a sinking feeling over the last year. From a technical perspective you want to see the shares at least back above the 50-day moving average of 2.38p,” the chartist says.

“That would be the first sign that a lasting turnaround otherwise we could still see the shares drift towards the 1.5p zone.”

]]> Range Resources shares heading for 0.7p says Zak Mir Thu, 15 Dec 2016 11:27:00 +0000 There’s good support in the chart for Range Resources Ltd (LON:RRL), so says technical analyst Zak Mir, who sees the shares rising into 2017.
“If you are cautious on the shares maybe wait for the 200-day moving average at 0.41p to break and take the shares up to the top of that rising trend channel up to the 0.7p area for the first quarter of 2017,” Mir said in a Tip TV segment for Proactive Investors.
]]> Solo Oil shares tipped to treble Thu, 15 Dec 2016 11:05:00 +0000 Investors in Solo Oil PLC (LON:SOLO) are primed for better news, according to technical analyst Zak Mir, who reckons the junior oilers share price could treble to 0.6p.
“The market seems to be anticipating better news, with the basing around to 0.2p area since the summer, just toying with 0.3p resistance and the 200-day moving average,” Mir said in a Tip TV segment for Proactive Investors.
“If we get a weekly close above 0.3p that should be enough to take the shares onto a new leg to the upside for 2017. Perhaps as high as 0.6p in the best case scenario.”
]]> Charts suggest Sirius Petroleum on course for a penny Thu, 15 Dec 2016 10:10:00 +0000 Shares in Sirius Petroleum PLC (LON:SRSP) are on track to hit the the 1p mark in the coming months, so says the ‘King of Charts’ Zak Mir.

Shares have been on a gradual ascent since July when Sirius got the environmental green light from Nigerian authorities with regards to the Ororo oil project.

“Since July the share have broken through the 200-day line which is a bullish sign and indicates that the trend is in an upward momentum category,” Mir says in the latest TIP TV segment for Proactive.

“Ideally over the next three to four months we’ll hit the top of this March trend channel at 1p and that remains the target while we hold above the 200 day line.”

]]> Take a punt on National Grid and get in at the bottom, says chartist Thu, 15 Dec 2016 09:45:00 +0000 Now could be the time to invest in National Grid PLC (LON:NG.) while shares are cheap, according to technical analyst Zak Mir.

Shares in the energy firm have been on the wane since July, but Mir thinks they’re starting to bottom out which could represent a decent buying opportunity.

In a TIP TV segment for Proactive Investors, Mir explains: “As long as we’re above [880p], you can regard this as buying at the bottom of the range opportunity.” 

]]> Oil price, Shell, Petrofac, Sound Energy, And finally... Thu, 15 Dec 2016 09:08:00 +0000 Oil price

Traders told me yesterday that the market was looking to have a correction so when the EIA inventory stats came out, although initially pleasing, they found some dirt. That was in the fact that although there was a useful draw of 2.6m barrels, better than forecast and the API number it was ‘in the wrong place’ as in on the West coast and in fact at Cushing it was a build. You can only please some of the people some of the time.


It is sad to see Simon Henry leaving Shell, for me and many others he has been Mr Consistent as head of IR and then CFO. But he deserves the rest it will become and a life of luxury although I suspect many non-exec jobs beckon. He is replaced by Jessica Uhl who was with Enron in Panama before which is scarier than it really is one hopes…


I will come back to PFC and other OFS companies later in the week, time is short today but the trading update this morning is a bit mixed. Net profits are expected to be in line with expectations at around $410m with the Group, ex IES, better at $465m but a worse situation at IES of a loss of $55m. The sooner Ayman can boot that lot into touch the better. As one might expect revenues are ‘record’ and the company is running very efficiently but order intake at $1.4bn is low field and the backlog is only $14.5bn. The market remains ‘challenging’ but I expect order inflow to pick up sharply in 2017 as delayed orders come through.

Sound Energy

An update from Sound this morning, at TE-7 the reservoir pressure correlates with previous wells which is further good news from Tendrara. They also announce that TE-8, the step-out well is going to be a full 12km from TE-7 a confident call and they will drill for the TAGI and the Palaeozoic there. As for numbers they have announced that they have put 1.5 TCF as the top end for TE-8 alone which puts the range at 0.5 (up from 0.3) – 1.5 TCF. After all that the company will produce a CPR and if all goes to plan add more value to the play. With this and Badile likely to spud also in February the momentum at Sound continues and shareholders have much to look forward to next year.

I will catch up with a number of other results etc tomorrow.

And finally…

A busy night of football last night as Chelski cemented top spot in the league and wins for the HubCap Stealers, Spurs, the Noisy Neighbours and the Red Devils keeping the pot boiling.

]]> VSA Capital Market Movers - Stratmin Global Resources PLC Thu, 15 Dec 2016 09:04:00 +0000 StratMin Global Resources (LON:STGR)

StratMin Global Resources (LON:STGR) has agreed to bring forward the payments due from its Share Purchase Agreement with Bass Metals (BSM AU) into an early discounted cash settlement. Under the agreement BSM equity was due to be issued to STGR in two tranches of A$3m and A$5m subject to certain share price performance criteria. However, with STGR currently identifying possible targets for an RTO and the upcoming dilution overhanging BSM the companies have agreed to strengthen both their positions through early settlement of the deal.

BSM will pay A$2.46m in cash in three tranches, the first of A$955k is to be paid by 16 December 2016, alongside the immediate placement of the entire remaining 70mn shareholding in Bass at a minimum price of A$0.013, equivalent to A$910k. Additionally, STGR has a royalty of 2.5% on BSM and BSM now has the option to buy out that royalty for A$500k prior to 30 June 2018. In total STGR will receive an immediate £1.1m of a total £2.1m with a potential further £296k from the royalty.

STGR had previously agreed a loan facility of US$1.5m using the BSM holding as collateral. However, given the latest announcement this facility, which was undrawn will be terminated. Whilst the company has taken a reduced amount of cash we believe that the upfront cash and simplified payment structure put STGR in a far stronger position ahead of a potential RTO.

]]> VSA Capital Market Movers - Metal Tiger Wed, 14 Dec 2016 08:55:00 +0000 Metal Tiger: Showing Its Claws

Botswana - Copper

Metal Tiger (LON:MTR) in partnership with MOD Resources (ASX:MOD) in a 30/70 JV has rapidly developed the T3 copper project on the Kalahari copper belt in Botswana. A Scoping Study was released in December 2016 having only discovered the deposit in March 2016. Our analysis suggests a post-tax NPV of US$170m on a 100% basis following initial capital of US$135m.

The open pit mine will exploit an initial 28mnt resource with a grade of 1.24% Cu along with a 15.7 g/t Ag credit. This high grade project will likely have lowest quartile cash costs after by-product credits and we expect these to average US$2,690/t over the nine year life of mine. The resource remains open in multiple directions and there are additional satellite deposits in the vicinity implying significant future exploration and expansion potential.

Thailand - Lead, Zinc, Silver

Metal Tiger (LON:MTR) has an effective 78% interest in a brownfield lead zinc silver project in Thailand. Lead and zinc prices have rallied 30% and 68% YTD and based on our analysis of a Primary Economic Assessment (PEA) released in 2013 we believe that the project has strong cash flow potential and attractive returns with a post-tax NPV of US$44m. Much of the original processing plant and underground infrastructure remain in good order and the restart costs are likely to be around US$15m, on a 100% basis.

MTR is currently progressing through a permitting process in order to gain a mining license as well as exploration licenses on the surrounding areas.

Attractive Valuation

Given the strong cash flow generative potential of both core assets in Thailand and Botswana, which on a 100% basis have post–tax NPVs of US$44m and US$170m respectively, we believe that MTR, is currently trading significantly below its NAV. Despite a strong turnaround in commodity prices, particularly base metals, during 2016, little credit has been reflected for the development of what are, in our view, attractive assets.

Recommendation and Target Price

Our analysis produces a target price of 5.68p/sh and we initiate with a Buy recommendation.

]]> Genel Energy is a better bet than Gulf Keystone Petroleum says Zak Mir Tue, 13 Dec 2016 11:28:00 +0000 Genel Energy PLC (LON:GENL) is a better bet for traders than Gulf Keystone Petroleum Limited (LON:GKP), so says technical analyst Zak Mir.
In a TIP TV segment for Proactive Investors he examines a possible pairs trade between the two Kurdistan based oil companies.
]]> Iofina plc expecting growth in demand to continue Mon, 12 Dec 2016 15:25:00 +0000 Iodine producer Iofina plc (LON:IOF) said total 2016 sales, through Iofina Chemical, have now surpassed 2015’s total.

President and chief executive Dr Tom Becker also explains to Proactive why second-half production will be lower: ''Recently we've run into some production issues that have caused our production levels to not quite meet our expectations.''

''We use water that is produced from oil and gas and we get that water from our partners in the field. When they have fracturing jobs they occasionally divert water and as oil prices have recovered ... they've actually completed some wells they'd previously drilled but not completed - so that's affected our supply of brine to our plants recently''.

The company now expects second half production of crystalline iodine to be 215-225 tonnes, with production returning to higher production levels in early 2017.

]]> Oil price, Sound Energy, Independent Oil & Gas, David Morrison, And finally... Mon, 12 Dec 2016 12:30:00 +0000 WTI $51.50 +66c, Brent $54.33 +44c, Diff -$2.83 -22c, NG $3.75 +5c

Oil price
The fact that the prices above, being the Friday night close, are out of date by well over two dollars indicates that the meeting in Vienna on Saturday between Opec and Non-Opec countries was deemed to be a success. As I write, WTI is $54.09 and Brent is $56.77, indicating that for the moment at least the benefit of the doubt is being given. There will be things that hit that confidence even before we know how much quotas are being adhered to, a bad monthly report here, a poor inventory number there but for the time being the Saudis telling customers to expect supply cuts to start in January will have to do.
The rig count is another dose of data that we will watch carefully although it is a given that the number will rise along with the oil price. Fridays number was slightly out of kilter post Thanksgiving but oil rigs up 21 to 498 is a portent of things to come. On a totally different note, the possible appointment as Secretary of State of Rex Tillerson has horrified the international community but confirmed the type of Government to expect, an albeit modest drain of the swamp maybe as the new broom sweeps its way in…

Sound Energy
Sound has announced that Sidi Moktar has received regulatory approval and transfer of the 75%  operated interest is complete. Sound has issued 43m shares to PetroMaroc and Maghreb Petroleum and will share 50% with PetroMaroc any sold over 50p. Various lock-ins are attached and dealings start in these shares on 16th December.

Independent Oil & Gas
IOG has announced that it has submitted the draft FDP for the Blythe gas field in the southern North Sea. No further appraisal is needed here and whilst it is subject to completion of development funding it is  a key milestone and a core of the eventual hub system. First gas is expected from here 2H 2018 and the company is in exclusive talks with ‘well known’ parties for distribution of said gas.

David DuBois Morrison
I couldnt finish my round up of World Oil Week without paying tribute to David Morrison, former Chairman of Wood Mackenzie who received the 2016 Lifetime Achievement Award at the World Oil & Gas Awards dinner. It was great to be sat very close to the great man and be able to chat and share reminiscences. I was fortunate enough to spend some valuable time with him and John Ogden in the offices of the North Sea service many years ago and the award is a highly appropriate one to a man with dedication and perfectionism along with a dry sense of humour.

And finally…
England subsided in the cricket which was  a shame as there are real grounds for optimism there except of course when you meet India on this sort of form at home.
In the Prem a few things are changing, all except Chelsea winning, 1-0 v the Baggies and the Gooners, 3-1 against the Potters. Elsewhere was a bit mixed with Spurs run ending by losing 1-0 at Old Trafford and the Noisy Neighbours went down  by 4-2 at the Foxes. With the HubCap Stealers dropping 2 points against the happy Hammers things are changing a little bit.
In todays Champions League draw the Gooners must have wept, win the group and get Bayern Munich, whilst the Foxes get Sevilla and the Noisy Neighbours have Monaco.
The boxing at the weekend presented some great bouts on a good card. AJ was magnificent but the Chisora v Whyte battle was immense and very difficult to call.

]]> LGO Energy 'beginning to take shape again', says Neil Ritson Mon, 12 Dec 2016 10:05:00 +0000 LGO Energy PLC (LON:LGO) expects to receive approval for the first well in a new drilling campaign in Trinidad before January after submitting a formal request to start work on the first infill well on the Goudron Field.

CEO Neil Ritson tells Proactive: ''We've made the application for the first, specific location on our programme of infill ... we've currently got 45 wells outlined approval and we're going in for the first one of those''.

''Further applications for additional wells for a programme of maybe 10 initial wells, from the 45, will be filed over the next few weeks and months and we're negotiating on a rig so we're beginning to take shape again''.

]]> VSA Capital Market Movers - Independent Oil & Gas Mon, 12 Dec 2016 08:32:00 +0000 Independent Oil & Gas (LON:IOG)
Independent Oil & Gas (IOG)# has announced that it has submitted the draft Blythe Field Development Plan to the Oil and Gas Authority (OGA) which was submitted on time as part of the licence extension.

Subject to development funding first gas from the field is expected in 2018, which we use for our modelling purposes. As a reminder the Blythe Field forms part of IOG’s Southern North Sea (SNS) gas hub with 2P reserves of 34.3BCF and all the subsurface work is complete.

We maintain our BUY recommendation.

]]> Oil price, Trinity Exploration & Production, EPI/PDF, Podcast VOG/HUR, And finally... Fri, 09 Dec 2016 11:19:00 +0000 Oil price

It is back to Vienna who are this weekend hosting the Opec/Non-Opec meetings which the market will hope confirms their part of the recent bargain. Yesterday the market was in believing mood as Russia said it would cut, as did Azerbaijan, others may be a touch more recalcitrant. Either way, in a speech in New York yesterday former Secretary General-El Badri indicated the deal would happen so that’s ok then…

Trinity Exploration & Production

There has been a story going round the market for several weeks now that has effectively said that Trinity has found a way out of its problems, that money had been raised and Bruce was back in business. Today’s announcement confirms that and by the look of it Trinity are back in business, at least for the time being.

The company is raising $15m at 4.98p which will pay off the creditors, restructure the balance sheet and even drill four wells. Money is being raised from the company’s largest shareholder and management and seems to be pretty much in the bag. Post all this, Trinity will actually look in quite good nick, operating break-even has fallen to $29.40 from $47.40 and concomitant with other e&p companies, costs are down, indeed after all that has gone on at Trinity I suspect that there are few other companies being run on such a shoestring. Indeed, following this process I imagine that Bruce Dingwall will be inducted into the Magic Circle post haste…


It has been announced that EPI Group, a leading private seismic consultancy has acquired PDF Limited which is a highly respected, also private, geoscience consultancy. Whilst both these companies are private, the combined group will provide an ever larger range of services to their blue chip client base be able to handle larger projects for a ‘broader spectrum of advisory services’.

Dr Mark Enfield, PDF founder will join the EPI board and Edward Bowen will remain CEO of the combined entity. This ‘transformational’ acquisition will create a broader range of advisory services to what is an increasing client base.  I mention this partly as industry readers of the blog will undoubtedly find it of interest and of course a company growing so fast will inevitably be considered for a quoted existence one day as this combination has the makings of a proper leader in its field.



This weeks podcast seems like a lifetime ago, World Oil & Gas week is a draining process! This week I spoke about VOG (28m 50s in) and HUR (32m 20s in) and the link is below should you wish to listen in.

Vox Markets podcast: includes Malcy on Victoria Oil & Gas and Hurricane Energy


And finally…

Another massive weekend of sport and top of the bill is Anthony Joshua who takes on Eric Molina in Manchester, no easy fight this. The other fight is Chisora v Whyte which is now not a title fight after the former threw a table at his oppo…

Rugby wise we are back to the European Champions Cup, too many great fixtures to mention here.

Racing is at Cheltenham and Donny both of which have great cards.

England played just about well enough yesterday in the test match yesterday but not so well this morning. 400 was ok but at the moment life is a cruise for the Indian batsmen who are 144-1 as I write.

So to the Premiership where there isn’t one standout match. Chelski host the Baggies, the Noisy Neighbours go to the Foxes, the HubCap Stealers entertain the happy Hammers and Spurs go to the Theatre of Dreams.

]]> Oil price, Shell, Plexus, EOG, Sundry-Faroe-Falcon-IOG- And finally... Thu, 08 Dec 2016 11:51:00 +0000 WTI $49.77 -$1.16, Brent $53.00 -93c, Diff -$3.23 +23c, NG $3.60 -3c
Oil price
Crude oil has drifted back in the last couple of days, production is obstinately high, reports yesterday that Opec output in November was up to 34.2m b/d and that Russia was up to 11.2m b/d. Add to that news of first Saudi Arabia and then Kuwait cutting prices to Asian customers and one can be rightly accused of wondering where these cuts are going to come from and if 1.5m b/d will be enough.
The inventory figures this week have been most confusing, mainly bigger draws than expected but yesterday’s 2.4m from the EIA disguised a 3.7m build at Cushing similar to the API number on Wednesday.

Shell has signed an MOU with Iran to partner on three oil and gas fields. Not of major significance but perhaps worth noting as it rather assumes that the Donald is not going to start reimposing sanctions- if he could- and also that those who are concerned about Shell’s finances can stop panicking about imminent penury.

Plexus Holdings
Just to prove that the Chairman can also produce statements that rival war and peace for length at least, Plexus has a detailed essay for shareholders today. Basically it says that the company is ready to ‘regain the momentum’ that was being built up before the downturn. Like all other OFS companies POS has had a hard time but it should have weathered the storm better than most. With a top of the range product portfolio, the bluest of blue chip clients, excellent management and supportive shareholders who have continued to stump up I have no doubt that recovery is a when, not an if, moment.

Europa Oil & Gas
A slightly shorter AGM statement from  EOG this morning, mainly explaining the corporate activity in the onshore UK portfolio, some assets have been moved on to fund the drilling at Holmwood and Wressle, the latter will provide useful cashflow. As ever the sex and violence is in the Irish part of the portfolio or what seems to be new to me and now labelled ‘Atlantic Ireland’ where the potentially considerable upside is located. I am interviewing Hugh Mackay next Tuesday on TipTV so will have much more to say after that.

Catching up on a couple of other items in a week busy due to a traditionally power packed Oil and Gas Council conference…
Faroe Petroleum announced that the Dong Energy deal had been completed, this will go down as one of the best for a very long time and the final price, at $26.7m  was way lower that the ticket price of $70.2m due to production and working capital adjustments.

Falcon noted that Origin have announced a major restructuring that involves an IPO of all its conventional upstream business leaving the Beetaloo on the outside. A nice word from Philip O’Quigley at Falcon explaining that the have kept the ‘crown jewels’ of APLNG and Beetaloo to themselves…

And IOG has gained an extension of another year, until December 2017, for its Blythe licence and will submit a draft FDP by the end of the year.

And finally…
The third test match against India is under way and with England winning the toss and batting a good score was necessary them being 2-0 down with two to go and that. England closed at 288-5 which at one stage was looking even better until a flurry of late wickets. Keaton Jennings made 112 on debut, his batting coming through his English mother’s side, obv…
Spurs managed to salvage something from the Champions League, winning last night to make it into the Boropa Cup where the Red Devils and the Saints are in action tonight. Already qualified as Group winners the fabulous Foxes changed 10 men and got done by 5…

]]> VSA Capital Market Movers -Sula Iron & Gold Thu, 08 Dec 2016 08:35:00 +0000 Sula Iron & Gold (LON:SULA)
Sula Iron & Gold  has announced the results of further analysis of the historic drill core recovered prior to the November 2015 programme. SULA has also announced the issue of equity arising from the exercise of warrants. Consequently 65,468,750 new ordinary shares were issued at a price of 0.16p/sh resulting in gross proceeds of £104,750. The warrants related to fundraisings in February and March 2016.

The highlights of new assays included 0.7m at 28.9g/t Au from 13.6m depth, 1m at 1.64g/t Au from 35.3m depth and 6.45m at 1.72g/t Au all of which were oxide samples. There was also 1m at 1.26g/t Au from 108.3m depth from a sulphide sample.

In total 25 samples were collected from historic drill holes, all of which were part of the campaign now known to have drilled sub parallel to the dip of mineralisation. Whilst the November 2015 results are likely to demonstrate more accurately the potential of the deposit these latest assays highlight the existence of shallow oxide mineralisation with strong grades.

We reiterate our Speculative Buy recommendation although our target price is reduced marginally to 1.7p/sh to reflect the dilution.

]]> Green Dragon Gas Plc is ideally placed as China looks to ramp-up coal bed methane Thu, 08 Dec 2016 07:00:00 +0000 Green Dragon Gas Plc (LON:GDG) chief executive Randeep Grewal is set to be a key beneficiary as China looks to ramp up its use of coal bed methane.

“For a company that’s been focussed exclusively on coal bed methane for a better part of 20 years we are ideally positioned,” Grewal said in an interview with Proactive Investors.

He highlights that the company has expected and waited for the new commitments from the Chinese authorities.

"We’re ideally positioned, it has been a long time coming … but we are very fortunate that the government continues to be steady in the deployment of its commitment in terms of the policy that’s just been released.”

Grewal also talks investors through changes in China’s energy mix and the migration to cleaner energy sources rather than coal; he also discusses Green Dragon’s present share price and the possible catalysts in the coming months and years.

]]> Solo Oil boss Neil Ritson says new drilling can turn Ntorya into a ‘big project’ Thu, 08 Dec 2016 07:00:00 +0000 Solo Oil PLC (LON:SOLO) boss Neil Ritson is excited about what he describes as a long awaiting drill programme in Tanzania, which kicks off with the imminent spudding of the Ntorya-2 appraisal well.

He highlights that much has changed on the surface since the original Ntorya well discovered gas - most notably there’s a new gas pipeline and infrastructure, and with partner Aminex the company has delivered another project into revenue generating production.

“Now is the time to get after the appraisal of the discovery we made in 2012,” he said.

Ritson the first well flowed gas and condensate at respectable rates, but expectations are high for Ntorya-2.

“We’re trying to turn this from a commercial project into a ‘big project’.

“It has already got enough gas from the first well to go into the pipeline system and make us some money, but, we think there’s a lot more to come here.”

]]> Refinancing deal 'critically important' for LGO Energy PLC, says CEO Neil Ritson Wed, 07 Dec 2016 15:35:00 +0000 LGO Energy PLC (LON:LGO) has announced “a major turning point” with news of a refinancing deal which will allow drilling to recommence at the Goudron Field in Trinidad.

Speaking to Proactive's Stocktube, CEO Neil Ritson says: ''The combination of an affordable loan, robust and profitable production operations and an active drilling program, will allow LGO to quickly return to underlying growth.''

]]> VSA Capital Market Movers - Millennial Lithium Wed, 07 Dec 2016 09:12:00 +0000 Millennial Lithium (ML CN)

Millennial Lithium (ML CN) has released further results from its current drilling campaign. The previously announced first hole intercepted three brine aquifers over 94.5m to a maximum depth of 192m (the depth of the hole). The second hole drilled to a depth of 352m encountered significant presence of brine aquifers, once again. Eight samples were taken at varying depths from 92m-275m, all bar one of which encountered brine flow in excess of 0.5l/second.

As a result of the drilling results and flow rates obtained, ML is proceeding with the installation of a production scale pumping test well. A larger drill has been mobilised for this and will enable a 24 hour pumping test to be completed. Further work is required to determine precipitation sequencing and lithium recovery

]]> Zak Mir says there’s a chance Premier Oil shares can rally to 80p and beyond Tue, 06 Dec 2016 10:51:00 +0000 Seeing the glass half-full technical analyst Zak Mir says Premier Oil PLC (LON:PMO) shares could rally to 80p per share.

At the same time though he acknowledges that other traders might see it differently.

Mir, in a Tip TV segment for Proactive Investors, said: “I’m going for a glass half full scenario, so basically if we can hold above 50p area then [a rally up to] the top of the range at 80p.

“But I would understand if some traders decided they didn’t want to get involved, unless it broke 80p.”

“Presumably the big breakout won’t happen until the debt issue is finally sorted out.”

]]> Haydale underlines "significant" market opportunities after Huntsman j/v deal Mon, 05 Dec 2016 15:45:00 +0000 Ray Gibbs, chief executive officer at Haydale Graphene Industries (LON:HAYD) talks to Proactive Investors about the joint-venture agreement signed with Huntsman Advanced Materials, owner of the Araldite adhesives brand.

"They are very happy with what we are doing, and they know, as we know, that there are significant opportunities out there in the market," he says.

"They are our industrial partner and we are very pleased by that approach, which seems to indicate they have massive confidence in what we do," he added.

]]> Plastics Capital "delighted" with 1H organic growth Mon, 05 Dec 2016 11:00:00 +0000 Faisal Rahmatallah, chairman at Plastics Capital (LON:PLA), a niche manufacturer of specialist plastic products discusses the group's solid 1H results with Proactive Investors after strong increases in both revenues and profits.

"Organic growth has been widespread across the whole business and we are delighted about that. It reflects a lot of hard work completed over the past 2-3 years," he said.

"The second half should be good and beyond that we see some really positive momentum with the business" he added.

]]> Oil price, Range Resources, Aminex/Solo, And finally... Mon, 05 Dec 2016 09:33:00 +0000 Oil price

Whilst many commentators remain unconvinced, the oil price is tracking upwards and for the moment giving the deal the benefit of the doubt. A decent spin from the 1oth December non-Opec meeting should cement, at least for the time being the situation.

Range Resources

Range has announced that the QUN 160 development well encountered the Upper Cruse Formation at a shallower depth than expected (2140′) which is good. They found hydrocarbon sands and oil shows and production testing is expected soon. The GY 681 well spudded on the 1st of December on the Beach Marcelle water-flood and is expected to show results in around four weeks.


Aminex has announced that the Ntorya-2 appraisal well will be spudded mid-December and test the up-dip part of the Ntorya-1 discovery. Hopefully it will find a thicker gas resource section, if so the site is ready for Ntorya-3 and may drill back to back. Aminex has 75% of this and Solo, which I wrote about ironically on Friday, has 25%. Finally, it is good news to see Aminex saying that it has started receiving cash in which is modest but very positive news.

World Oil & Gas Week

This week the Oil & Gas Council hosts what is undoubtedly the best week of meetings, speakers and seminars, not to mention off-site catch ups anywhere in the industry. I hope to be able to report back a little of the occasion although a lot is held under Chatham House rules.

And finally…

Briefly as I run to the above….

The football was fast and furious at the weekend and both the Noisy Neighbours and the HubCap Stealers had ‘interesting’ ends to their games….

]]> VSA Morning Agri Comment Mon, 05 Dec 2016 08:19:00 +0000 Anglo African Agriculture Trading Update

On Friday Anglo African Agriculture plc (LON:AAAP), the London-listed food manufacturing and processing company with its main operations in Cape Town, South Africa, published a trading update ahead of its results for the year ended 31 October 2016 (FY 2016).

AAA expects to report FY 2016 sales in its spice manufacturing business of more than ZAR 34m (c£2.0m), +44% YoY (FY 2015: ZAR 23.6m (c£1.1m))

In November 2016 (first month of FY 2017) revenues have increased to ZAR 4.4m (c£0.26m), +16% YoY (November 2015: ZAR 3.8m (c£0.18m))

Volumes in November also increased to 150t, up from an average of 90t per month over FY 2016

VSA Comment

Although it is difficult to forecast a full-year trend off just one month’s trading, if AAA can sustain its current YoY growth rate across the rest of FY 2017 revenues are on track for c£2.2m (assuming current FX rate). However, given volumes are likely to increase in-line with planned capacity expansion (to 250t per month), this figure is likely to be significantly exceeded.

On the bottom line, profitable contribution should also be provided by the soon-to-be-acquired 46.8% stake in Dynamic Intertrade Agri (Pty) Ltd, which delivered revenues of ZAR 2.3m (c£0.13m) in November 2016 and recently secured a 1,000t fertiliser order for December 2016 worth ZAR 5.75m (c£0.33m) with an expectation of a 10,000t follow-on order to be spread over 2017.

Initial signs for FY 2017 appear positive and the new management team are clearly making significant operational improvements as the company seeks the scale it needs to reach profitability. With November being the last month before the holiday season, we wait to see whether AAAP can sustain this growth through the quiet December to January period and beyond. If it can, then FY 2017 could represent a significant turning point for the business.

]]> Oil price, BP, I Solo Oil, And finally... Fri, 02 Dec 2016 12:03:00 +0000 Oil price

I always think that it is rather nice when the market appears to be thinking with one voice, particularly if G Sucks is on the other side. The feedback from the Opec meeting is overwhelming cynical with most so called experts writing the obituary of the whole organisation let alone this agreement. Indeed everyone from Zak Mir to a visiting professor and chair of the Kings Policy Institute in London has written it off. The missing piece in the jigsaw is what GS has to say but as ongoing bears of the oil price they are coming from a position of weakness.

Disregarding all that, it seems that the telephone conversation that I mentioned earlier in the week between Presidents Putin and Rouhani may have swung things towards an agreement. Apparently this call took the heat out of the Saudi-Iran negotiations and may have sealed the deal, who knows, I have a healthy degree of cynicism myself but can believe anything on the right day. Recording of exports and production is better and more transparent than it used to be so I guess that come the new year we shall see who is and who isnt playing ball.

In the meantime if the agreement lasts only a while we shall see the inevitable continued rise in the rig count and something that will be welcomed by the US service companies as well as the likes of Hunting…

Finally in his first piece of policy in the energy sector it seems that President elect Trump has formally the Dakota Access pipeline as mentioned here after his election.


It’s almost as if BP were  waiting for the meeting to finish as they have announced that they have approved the spend of $9bn on the new platform for Mad Dog 2 in the Gulf of Mexico. The platform will produce 140/- b/d and will come onstream in 2021, oil price wise this is the interesting bit as I have been banging on for a long time about capex reductions causing a degree of tightness in the oil market, an approval now still means a five year wait by which time anything might have  happened. Reasons for being more positive between then and now are summed up by the $1.5tn loss of capex projects worldwide which, cannot be magicked back on to the market. Finally back to my point about costs, this platform which is budgeted at around $9bn would have been $20bn two years ago.

Solo Oil

I was fortunate to meet up the other day with CEO of Solo Neil Ritson and new FD Dan Maling. I have historically only had exposure in that part of Tanzania through Aminex but meetings with Solo and Wentworth in recent days is fast expanding my database. For Solo, Tanzania is the primary source of value, as they prepare to spud Ntorya-2 in the Ruvuma basin swiftly followed by the Ntorya-3 well should this well be a success. With 1-1.5 TCF of gas it would dwarf Kiliwani North but if my maths are correct they have enough cash to spare to drill this well, the N-3 well might need some funding. Kiliwani North pays the day to day G&A spend but at 15-20 scuffs a day looks disappointing, I’m sure I saw numbers nearer 30 doing the rounds.

One cant talk about Solo with mentioning Horse Hill where the company are awaiting planning approval which might get through early next year, any further success here would be relatively modest to the share price but no less welcome. Finally, I would expect more corporate activity from Solo who are a small but interesting team working in a specifically value enhancing area, Ntorya-2 when it spuds very shortly will be most important to the company.

And finally…

The autumn season of rugby internationals comes to a halt with England hosting the Wallabies at Twickenham, get the shopping done early tomorrow…

In the football it might be the winner takes it all game as the Noisy Neighbours host Chelski in the top of the table clash. With Spurs hosting the Swans and the HubCap Stealers at the Cherries it leaves the London derby at the London stadium where the happy Hammers take on the Gooners. In mid-table misery there is the sight of the Red Devils going to the Toffees.

And more great NH racing with the Welsh Grand National at Chepstow and a great card at Aintree featuring the Becher Chase.

]]> Obtala Ltd chief 'very pleased' to have oversubscribed on latest raise Fri, 02 Dec 2016 11:43:00 +0000 Obtala Limited (LON:OBT), the Africa-focused agricultural and forestry company has announced that it's raised a total $14.25mln cash investment into 40,728 Preference shares in Argento Limited, Obtala's 75%-owned forestry subsidiary.

They'd actually set out to raise $10 mln, Obtala's CEO Paul Dolan tells Proactive: ''I think the strength of the story certainly helped to sell it and our maximum headroom in terms of allowance that we could sell was just short of $20 mln''.

''The Preference Share is convertible at the holder's option into either the Argento forestry subsidiary or Obtala''.

Dolan also mentions they're expecting another $5 mln to come through which would take them to their maximum allowance of $19.25 mln.

''As a small company when you're going out to look to raise funds, you never count on definitely getting the deal done so we're very happy to have oversubscribed on this''.

In terms of where the money gets spent: ''We were very clear that the primary aim is to put the Argento business into full production. So we're looking at establishing a central sawmill and then mobile units in our concessions and a fleet of trucks to ferry the timber  from the concessions into the central sawmill'', Dolan says.

A portion of the funds raised will also go towards Obtala's agriculture project in Tanzania.

]]> Quadrise Fuels International shares are setting up to rally says Zak Mir Fri, 02 Dec 2016 11:04:00 +0000 Technical analyst Zak Mir sees support for Quadrise Fuels International Plc (LON:QFI) below current levels, and he reckons the share could be setting up for a strong rally.
Mir in a Tip TV segment for Proactive Investors said the Quadrise chart was “an improving picture”.
He highlights that the chart has a rising trend channel that has been in play since June, and said there are multiple support points at the 10p level.
He calls the upside ‘decent’ and says that the price could rise up to 16p, but cautious buyers may want to wait for the price to break above 12p, which where the 200-day moving average is.
]]> Opec deal driven by necessities, TD Investing's McGrade says Fri, 02 Dec 2016 07:34:00 +0000 Michelle McGrade, chief investment officer (CIO) of TD Direct Investing, tells Proactive Investors that the chances of the squabble-prone Opec states sticking to this week’s landmark agreement to cut production are good.

It is Opec’s first output cut in eight years, and McGrade believes that even these oil-rich countries are starting to feel the pinch, and they need the price of oil to go up.

McGrade also gives an insight to how retail investors are responding to the news, “as they pile into a range of stocks” – and it’s not just the old stand-by favourites BP and Shell; McGrade also name checks Tullow and Premier Oil from the mid-cap section of the market.

“You can buy the BPs and the Shells; they have good dividends, and if the oil price does go up to around US$70 a barrel, which is what Opec is indicating is what it would like, then the dividend would hold well for those companies,” McGrade opined.

“The other way to play it [the oil price rally] is to buy a fund, so one of the funds on our recommended list is specially orientated just to energy, and it’s called Guinness Energy Fund. They’ve got about 30 stocks within that fund,” TD’s CIO said.

She thinks the energy-focused fund managers are looking at a thirty to forty per cent rise in oil stocks over the next couple of years.

]]> Oil price, Northern Petroleum, Frontera Resources, And finally... Thu, 01 Dec 2016 10:28:00 +0000 WTI $49.44 +$4.21, Brent $50.47 +$4.09, Diff -$1.03 -12c, NG $3.35 +4c
Oil price
So, the organisation got it together roughly as expected but is this an early Christmas present or trouble by Easter? As with any Opec agreement, particularly those burnished with gilt, the proof of the pudding is in the eating, will they deliver on the agreement reached yesterday after an unusually long meeting? The 1.2m b/d is at the top end of expectations and individual countries are much as expected. Iran has actually had its reference production level increased to 3.975m b/d which they may not achieve but Iraq has taken a cut which shows more than a bit of willing. With the Saudi’s taking their 500/- cut it is clear that they have led by example, possibly influenced by the head of corporate finance and his warnings about needing a stable background for the Aramco float.
The stated aim for the price is somewhere in the $55-60 range which for most exporting Governments and companies even they would take your hand off for. Whatever the last two years has done for the industry it has re-balanced their costs, to such an extent that for many E&P companies that price means revenue and profit, for the majors the dividends are safe for the time being.
The EIA inventory stats put a thin layer of icing on the cake, the draw of 884/- was better than the whisper of a 678/- build and whilst inventories in products built, particularly in distillates the market breathed a sigh of relief all round.
Northern Petroleum
It has to be said that I’m sure that a number of people werent sure that they would be writing so positively about NOP, it has definitely been on the critical list for a little while. So it was very pleasing to see yesterday that they have introduced a strategic investor in the form of H2P who are investing in the asset portfolio and providing much needed financial and technical support. NOP are raising £5.1m at 3.5p which is a 12% premium plus a small Open Offer of a 1 for 7 at the same price. This is exactly the sort of deal that NOP should be doing and the buyer is taking a piece of some of the less desirable assets as well just to show that you have to kiss a few frogs en route…
Frontera Resources
After two years of not being able to meet with Frontera, despite many blog readers insisting I remain keen, and having my latest meeting being cancelled recently, I finally got a conference call earlier this week. I spoke with Steve Nicandros whom I suspect has been protected from reptiles like me by Investor relations for all this time. It is far to early to try and judge the company on one call and if you look at the share price, maybe too late to make something of the assets but I was actually quite impressed. Block 12 in Georgia looks to have a number of interesting prospects but I will have to suspend judgement on Moldova for a while. Early days yet, as I say but it certainly goes on the watchlist despite it being only an £8m market cap.
And finally...
Jose Mourinho should ‘get lost’ a bit more often as his hiding place was not discovered and the Red Devils went through 4-1 against the Hammers. They will meet Hull City Tigers in the semi finals, the other one is the HubCap Stealers against the Saints who knocked out the Gooners.

]]> VSA Capital Market Movers - Glencore and Stratmin Global Resources Thu, 01 Dec 2016 08:26:00 +0000 Stratmin Global Resources (LON:STGR)
Stratmin Global Resources has provided an update on its position as a cash shell. The company are reviewing potential opportunities and are focusing their resources on finding a suitable asset for completing an RTO. These opportunities have largely been focused on the precious metals sector in which management has prior experience.

Given STGR’s near term focus, it has decided with its JV partner, Tirupati Carbons and Chemicals to enable new investors to participate in the JV which is owned 1.47% and 98.53% respectively. The focus of the JV is the development of the Vatomaina large flake graphite project in Madagascar. Any new investment will be made at a minimum price equal to STGR’s existing investment. The proceeds would be used to accelerate the development of the project.    

Glencore (LON:GLEN)
Glencore  has provided an investor update which largely focuses on the progress on the deleveraging programme. GLEN states that it is on track for US$16.5-17.5bn net debt by end 2016. Divestments through the year have totalled US$6.3bn versus initial guidance of US$1-2bn which suggests that other areas of the programme may have disappointed.

The new target is for 2x net debt/EBITDA over the long term. GLEN anticipates robust free cash flow of US$6.5bn in 2017F. Furthermore, a new dividend policy has been announced commencing in 2017 in which US$1bn will be paid via equal instalments in H1 and H2. At the current price level this implies a dividend yield of around 2%. From 2018 onwards the minimum US$1bn will be maintained alongside a variable distribution which will represent a minimum payout of 25% of free cash flow from industrial segments.

]]> SSE has support and can power 10% higher Wed, 30 Nov 2016 11:00:00 +0000 British energy supplier SSE plc (LON:SSE) saw its share price dip following an underwhelming half-year report at the start of the month, but could it be ready to kick on from here?

Technical analyst Zak Mir certainly thinks so, and is tipping the stock to add the best part of £2 to its price over the next couple of months.

“You can see that the shares have been sideways in a range between 1350p and 1650p. At the moment we’ve bounced a support line from February at 1450p,” he explains in the latest segment of the TIP TV Proactive Investors Bulletin Board series.

“One would be looking for recovery towards that 1650p range.”

]]> Oil price, Faroe Petroleum, Jersey Oil & Gas, And finally... Wed, 30 Nov 2016 10:54:00 +0000 Oil price

The day of the Opec meeting dawns and no one is quite sure of what the end of the day will bring. I guess that the market is slightly favouring a  deal of some sort without too much confidence, intransigence rules in such situations…

The API reported an unexpected draw in crude stocks yesterday, if the Opec meeting runs on it could be that the EIA have their inventory stats around at the same time…

Faroe Petroleum

The company has announced that the FDP for the ODA( formerly Butch)  field has been submitted to the Norwegian Ministry for Petroleum and Energy. The company are using an innovative solution for the hydrocarbons, the field ties back to the Ula platform where the oil will go to the UK via the Norpipe system and the gas will be re-injected into the Ula reservoir to improve recovery. It looks like a win-win situation as over the last two years of developing the plans investments costs have fallen by 40%. This proves yet further advantages of the Dong acquisition and means that Faroe’s success with the drill bit in recent years is even more vindicated.

Jersey Oil & Gas

The company has announced that ‘following investor interest’ they have completed an oversubscribed placing to raise £1.6m at 110p, a discount of 6.8%. The interest exceeded demand and there was some scale back, management and family also participated in the exercise. Funds will be used for technical studies in support of the Verbier well due to be drilled next summer. JOG is looking increasingly well placed to take advantage of at the very least ‘warm’ investor sentiment and possibly a company making discovery next year, and whilst it has inevitable risk associated with other such small players I consider one that is very much worth taking.

And finally…

As the England cricket team relax on their mid-tour holiday it is sad that Haseeb Nameed has to return home with a broken hand, we will see much more of him I know. Replacing him is Keaton Jennings who will find life just as interesting out there and also it’s been a while since England had a South African in the side…

Last night in the Michael Mouse Cup the HubCap Stealers blooded some kids in their 2-0 defeat of the Peacocks, in the other tie the Hull City Tigers beat the Magpies on pens.

]]> VSA Capital Market Movers - Asiamet Resources and Sula Iron and Gold PLC Wed, 30 Nov 2016 09:56:00 +0000 Asiamet Resources (LON:ARS)

Asiamet Resources (ARS LN)

Asiamet Resources (ARS LN) has released Q3 2016 financial results and quarterly operating highlights. ARS is currently progressing towards releasing a PFS on its Beruang Kanan Main project in Indonesia which will most likely produce around 25ktpa of copper at lowest quartile costs. Recent work has been focused on infill drilling to increase the economic confidence of the resource to reserve status. The programme has so far confirmed expectations and demonstrated strong continuity of mineralisation within the resource. Additionally drill holes which have extended the bounds of mineralisation indicate the potential to reduce the stripping ratio of the project and therefore the unit costs. 56 holes for 5.6km have been completed with a further 62 holes for 5.4km planned.

Bulk sampling has also taken place and the results of the subsequent testwork were also positive. The results indicated low energy requirements for crushing which limits capital requirements. Environmental assessment work is currently underway also.

ARS expenses reached US$1.1m during 3Q 2016, of which US$946k related to exploration. For 9mo16 expenditures were US$2.0m with US$1.3m relating to exploration expenditure. Cash at the end of Q3 2016 stood at US$701k.

We reiterate our Speculative Buy recommendation and target price of 6.2p/sh.

Sula Iron & Gold (LON:SULA)

Following the previous announcement by Sula Iron & Gold (SULA LN) relating to its share placement, the company has announced the terms of the open offer. The record date for qualifying shareholders is the 29th November 2016 and for every 13 existing ordinary shares 1 open offer share is available.

The price of 0.21p/sh. is the same as the placing although given the strong performance of the shares since the placing this now represents a 16% discount to the last close versus 7% at the time of the placing. Consequently we believe that the open offer provides an opportunity to buy at an attractive valuation.

We reiterate our Speculative Buy recommendation and 1.8p/sh. target price.

]]> Oil price, Hurricane Energy, Pantheon Resources, Sound Energy, And finally... Tue, 29 Nov 2016 13:42:00 +0000 Oil price

There is little doubt that less than 24 hours away from one of the most crucial Opec meetings in recent history few if any people know what the outcome might be, and i’m talking participants as well as spectators here. In Vienna even a chance chat over a coffee is ‘an official meeting’ so yesterday was full of such discussions sometimes by phone. So, President Putin ‘met with’ President Rouhani and agreed to ‘coordinate’ their production, the Iranian delegation met with the Iraqi delegation and the former spent most of the meeting on the phone, likely receiving instructions. Iraq has been more amenable deal-wise, Iran less so I understand.

As has almost always been the case, the bottom line is totally dependent on what the Saudis want, after all the weight of any cuts which are ‘agreed’ will fall on their shoulders. Dont forget that the corporate finance department of the KSA will be whispering in their ears about how much easier the Aramco IPO will go at $60…..

If the statement starts off something like this ‘we are all confident that the oil market is re-balancing satisfactorily on its own’, head for the hills.

Hurricane Energy

There are fewer more interesting sights in the oil industry than watching the good Doctor Trice on the move when he spots an opportunity. After an incredibly busy few weeks in which Lancaster has gone from being a mere discovery to what might be a West of Shetlands hub, with wells on Lincoln underway and Halifax as of yesterday confirmed with the Transocean Spitsbergen next, what more might come out? Of course, how silly of me not to think that with all this going on and an imminent FID on Lancaster and first oil due in 2019, HUR would need an FPSO. Cue this mornings announcement, whereby the company announced that they had hired the BES  Aoka Mizu FPSO for the Lancaster EPS and up to ten years more if signed by this time next year. That of course means that first oil in 2019 is more likely, assuming that Lancaster gets the go-ahead next year, would we ever doubt it. Oh yes and in the middle of all that they raised £75m just to be going on with…Mind you, with all this drilling, head office will be quiet over Christmas…

Pantheon Resources

An operational update this morning but one which should never have been, at least not right now. The company has a bunch of meetings slated with its shareholders and I suspect that the Nomad or other advisors felt that they should go ahead even if it meant that the operational news is made to look distinctly second rate.

The announcement says that the VOBM#3 well flow testing is ongoing and that the data so far is ‘inconclusive’ with 1,500 mcf/d of natural gas and 274-740 b/d of 51º API oil but the ratio of gas to liquids needs stabilising and more work needs to be done. Frac fluids from a one-ff are only 60% recovered and it needs to be cleaned up and needs diagnostics. The company are saying that the well will be a commercial well but maybe just not as good as the VOBM#1 well to the East. Indeed, there is every likelihood that they have just found themselves right on the edge of the reservoir and that’s it. With gas processing, probably now by a third party and the third option in terms of selection next spring will see production and netbacks improved should this option be chosen.

The market has made its decision and PANR are off a short 20% today and to be frank that’s probably about right. The final knowledge about the well is a way off and it’s much easier to mark down than hope that all will be ok. The next few weeks now become more crucial, this well needs cleaning up big time and the VOBM#4 will be on us like Christmas in Texas. The more I look at this the more I think that although it was important to meet shareholders I would have done it later, if the story has legs, which I still believe it does then they will understand. This has been compounded by the last fiasco and why I can understand what they have done today, make no mistake I am still a believer, I think that they have cracked the code and that Jay and the operating team are onto something here and it will be worthwhile. Shame about the messaging though.

Sound Energy

Sound has announced this morning that they have confirmed the previous MOU with Pergemine and contracted a rig for the Badile exploration well. The rig is in Italy and will mobilise in January and be available for spudding 1Q 2017.

And finally…

India are now 2-0 up in the test series with two to play and the English players have been told that they can go on holiday before the next test. They are already on **** holiday staying in 5 star luxury and playing their favourite game. Maybe they should have been told that the nets was as good a place in the sun to be until the next test…

Its the Michael Mouse Cup again tonight and the draw has put up the Hull City Tigers against the Magpies and the HubCap Stealers against the Peacocks, enjoy….

]]> Oil price, Victoria Oil & Gas, Hurricane Energy, Falcon Oil & Gas, And finally... Mon, 28 Nov 2016 12:36:00 +0000 WTI $46.06 -$1.90, Brent $47.24 -$1.71, Diff -$1.18 +17c, NG $3.09 +6c
Oil price
It is now officially squeaky bum time with  the Opec meeting starting on Wednesday and many potential strategies still being discussed. The non-Opec meeting scheduled for today has been suspended as the Saudis have apparently decided to ensure that the Opec house is in order before anyone else joins the meeting. The downside of a failure on Wednesday is more than the upside, a ‘no-result’ would likely drop the oil price by $10, maybe more, an agreement to cut production would push the price up and the amount maybe dependent on the market’s perception of its validity.

Victoria Oil & Gas
Batch drilling is underway at Logbaba with La-107 having been drilled, cased and cemented down to 400m before being suspended and then skidded 10m down the track to do the same at La-108. The advantage of batch drilling is clearly obvious here as the cost savings and efficiencies of having materials and services on site only when they are needed and de-mobilised when they are not is accentuated by a 10m rail system. Despite the delay caused by the lightning strike, work is now proceeding apace at Logbaba and progress to the fairly shallow TD continues.

Hurricane Energy
HUR has exercised the option over the Transocean Spitsbergen drilling rig in readiness for moving to the Halifax well on the newly acquired P2308 licence. This well is hoping to prove the north eastern  extension of the Lancaster field and will move there when the current well is complete.

Falcon Oil & Gas
Interims today from Falcon but in reality there is little to report, certainly not from this accounting period. The Amungee NW-1 success is clear, Operator Origin has filed a ‘notice of discovery’ and has been very bullish about this significant well result. However, as I have written a number of times, the recently imposed moratorium on fraccing puts everything at best, on hold. It would be wrong to try and misjudge the outcome but many documents have already been presented on this matter that should mean that the programme goes ahead. If and when that does happen FOG remains in an extremely strong position as it is fully funded and with what looks like a cracking discovery in a world leading basin, until then it is purely a matter of patience.

And finally…
The cricket goes from bad to worse and its not even as if the sides are that much apart, England will lose this test.
The rugby was very good over the weekend with Ireland taking most of the credentials particularly beating both the All Blacks and the Wallaby’s on their tours. Less impressive wins for England, Scotland and Wales over inferior teams made up the weekend.

With wins at the weekend for the Noisy Neighbours, Chelski, the HubCap Stealers and the Gooners the top of the table is most exciting..
Hands up if you were thinking that Lewis was having a right laugh yesterday with his slowing down tactics, what a shame that young Max couldnt have just caught up…

]]> VSA Capital Market Movers - Metal Tiger Mon, 28 Nov 2016 08:43:00 +0000 Metal Tiger (LON:MTR)
Metal Tiger following the announcement on Friday 25 November that it had received an indicative offer from BMR Group (BMR LN) of 0.231 BMR shares for every 1 MTR share, MTR has rejected the offer. The BoD will not recommend the offer to shareholders on the grounds that it undervalues MTR.

On 24 November MTR’s share price closed at 2.275p/sh. whilst BMR closed at 5.875/sh with the bid therefore implying a valuation of MTR’s shares at 1.36p. BMR now has until 23 December 2016 to announce a firm intention to make an offer or announce that it does not intend to make an offer.

]]> Oil price, Ithaca, Sound, SDX, Lamprell, Sundry-Egdon- And finally... Fri, 25 Nov 2016 12:40:00 +0000 Oil price

The prices above are as at 0900 hrs this morning, what with Thanksgiving yesterday trade was thin. It might be today as well as we all gear up for Opec next week which might be as important a meeting as two years ago. At the moment -4.5% is still on the cards and whilst an agreement maybe announced it may not be deliverable. It’s an important one to get right, keep the price up through 2017 and a number of rewards will be bestowed upon the faithful, the impact of the trillion dollar capex cuts and of course the possibility of a successful Aramco float….

Ithaca Energy

Ithaca has been marked down this morning as the company updated as to a modest delay at the Stella field development. As a result of finding the inevitable teething troubles management have correctly instructed that all junction boxes are to be inspected resulting in a small slippage until January. This will make no difference whatsoever to the economics of the project and first oil should be in January so only a matter of weeks delay. As I write the shares are off by 10% which is plain daft and wise investors should take appropriate advantage.

Sound Energy

Following the raise of £24.1m yesterday at 81p the offer was left open for the day so retail and other investors could take part along with the underwriting institutions. Even though it was at market price, by the close the amount raised had swollen to £26.9m due to the over-subscription. This is no mean achievement and shows that despite the shares having risen by a multiple of five this year, shareholders remain incredibly supportive.

SDX Energy

SDX remains one of the most interesting plays in North Africa having accumulated an excellent  quality portfolio of high margin production assets as well as an exciting array of exploration prospects. Today’s 3Q financials are as ever not as important, as the potential that has been discovered at South Disouq where the company now possess a comprehensive dataset of information enabling them to select the location of the upcoming well for which they are carried. At Meseda the company are completing the final technical review and undertaking a tendering exercise in order to get the kit on site that will increase production next year. The next few months look most interesting to SDX who have a strong balance sheet, good management and some transformational wells to drill.


A new contract for Lamprell this morning and from an improbable source, ScottishPower Resources  have selected Lamprell for work on their East Anglian One offshore wind farm project. In a contract worth $225m Lamps will start next March and continue fabricating in Jebel Ali and Sharjah until October 2018 which will do wonders for next years revenue…


Egdon Resources has announced that its Open Offer was oversubscribed 1.3x and applicants will be filled accordingly. The total raise brought in £5.06m for the company who are now well set to go ahead with Wressle and other projects.

And finally…

These tests in India keep on coming, tomorrow sees the start of the third, England bring in Buttler for Duckett and Woakes will likely replace the injured Broad.

The rugby is also fast and furious, England host the Pumas, Scotland take on Georgia, Ireland have the Wallabies and Wales host the Springboks.

Last night Rooney added to his club tally in a 4-0 win against Feyenoord, the Saints will need something to go through in the last game in this round of the Boropa Cup.

In the Prem the big game is Chelski v Spurs while the Noisy Neighbours go to Burnley and the Maccams go to Anfield. With the Gooners hosting the Cherries the happy Hammers go to the Theatre of Dreams..

And the best til last as Jensen will race for the last time in F1 this weekend, Nico only has to come 3rd against any opposition to pick up the title.

]]> 'A great deal of support' for Sound Energy PLC, says Cantor's Sam Wahab Fri, 25 Nov 2016 11:34:00 +0000 Sound Energy PLC (LON:SOU) has raked in more than it anticipated in a fundraiser that allowed private investors to participate alongside City institutions.

Speaking to Proactive, Cantor Fitzgerald's oil analyst Sam Wahab says: ''An oversubscribed and underwritten placing announced yesterday and today, that's just over £26 mln in the coffers and they only set out to raise  £24.1 mln - and at a very modest discount as well''.

''It does show there's a lot of support both from private retail  investors as well as City institutions''.

On Thursday, Sound said its first horizontal well flowed at 32mln standard cubic feet of gas a day and could eventually go “significantly above” 40mln standard cubic feet.

Sam Wahab says 'It's very material for Africa in general but certainly for Morocco''

''This is very, very important for them''.

''It shows that they can produce at significant rates from the existing acreage - I suppose looking further ahead the key focus for investors will be the outpost well which will be TE-8 and I suppose that would determine how large this field is'', Wahab adds.

]]> Bowleven shares 'finally on the move' Fri, 25 Nov 2016 11:32:00 +0000 Shares in Africa-focused Bowleven PLC (LON:BLVN) are set to rise higher believes Zak Mir, technical analyst at Tip TV.

It’s been a turbulent period for the oil group, with an attempted boardroom coup recently adding to the uncertainty.

Mir believes this may have concentrated minds of management at the explorer, which has attractive assets but investors have been waiting a long time for it to come good.

The share price broke through the 200-day moving in August, which suggests the possible changes will be a positive.

Shares may re-test the August high of 28.5p over the next few months and it looks as if the shares are finally on the move says Mir.

]]> BP could end 2016 above 500p per share says Zak Mir Fri, 25 Nov 2016 10:31:00 +0000 BP Plc could see another leg up and close out 2016 above 500p per share, according to technical analyst Zak Mir.
In a Tip TV segment for Proactive Investors the chartist highlights the positive trend in the oil supermajor’s share price since June, thanks in part to steadier oil prices and the Brexit boost on the US dollar.
He says the base of the trend channel is 440p, while the top is presently seen up to 520p.
“We’re looking for that target on a one to two month timeframe …. the 50 day average at 464p is rising, so it looks as though we’ve got a new leg up towards 500p plus by the end of the year,” Mir says.
]]> VSA Capital Market Movers - Zambeef Products Fri, 25 Nov 2016 08:51:00 +0000 Zambeef: FY 2016 Results

Zambeef (LON:ZAM), a vertically-integrated agribusiness with operations in Zambia, Nigeria and Ghana, has released its full-year results for the period ended 30 September 2016 (FY 2016).

Revenue: US$219.4m, -0.4% YoY (FY 2015: US$220.2m); FactSet FY 2016 consensus was for US$202.2m.

Adjusted profit before tax (exc. unrealised FX and biological adjustment): US$8.6m, +390.9% YoY (FY 2015: US$2.2m)

Debt-to-equity ratio: 26% (30 September 2015: 60%)

Gross Profit by Segment (in US dollars):

Retailing: US$16.8m, -7.0% YoY (FY 2015: US$18.0m)

Cold Chain Food Production: US$24.6m, -11.3% YoY (FY 2015: US$27.7m)

Row Crops: US$23.3m, -35.2% YoY (FY 2015: US$35.9m)

Stockfeed: US$13.3m, +27.1% YoY (FY 2015: US$10.5m)

VSA Comment

ZAM’s year-end trading update on 30 September had already highlighted that its strong H1 trading performance had continued into H2, in particular highlighting significant volume growth across its beef, pork, dairy and stock feed operations, largely as a result of the ongoing roll-out of its macro retail stores (during the year ZAM’s total retail network expanded to 171 outlets from 154, and ten new macro stores are targeted for 2017).

These results confirm these more positive trends, with 10.8% volume growth in cold chain food products and 15.3% volume growth in stock feed reported, delivering a much improved group adjusted PBT. In Kwacha terms the performance was even more pronounced, with ZAM delivering a six-fold increase in group adjusted PBT and gross profit growth of more than 40% in retailing, more than 35% growth in cold chain food production and 95% in stockfeed (row crops Kwacha gross profit fell 0.6%).

This year ZAM has provided additional clarity on the specific financial impact on the group from its retailing operations, which contributed 20.7% of group gross profit in the year, up from 17.8% in 2015. This, combined with the strong reported volume growth, is evidence to us that the group’s macro store expansion strategy and general renewed focus on its retail network is starting to achieve results. With ZAM revealing its segmental results from its Zambian retail network for the first time, perhaps the most interesting new observation is that gross profit margins in Zambian retail are roughly half of that seen in its West African retail operations (GP margin: 12% vs. 23%).
With a much more stable local currency, an IMF support package likely soon and strong political support (as evidenced by Wednesday’s commendation for ZAM from the Zambian Agriculture Minister), the macro environment now appears to be much more positive for ZAM.

As we said at the time, the US$65m CDC transaction during the year was transformation for ZAM, strengthening its balance sheet and removing considerable uncertainty from the stock for investors. ZAM’s share price has increased c150% since the deal was announced on 4 August. However, we believe the stock still offers compelling value at these levels, especially with a progressive dividend policy likely to be re-instated from 2017 onwards.

]]> Sound Energy PLC opens up funding to private as well as institutional investors Thu, 24 Nov 2016 12:53:00 +0000 On the back of some impressive flow rates from its first horizontal well on the Tendrara licence and backed by its success to date in Morocco, Sound Energy PLC has unveiled plans to raise just over £24mln.

Sound is offering shares in two tranches and is using the PrimaryBid platform for private investors who have less than €100,000 to stake on the company’s success.

On why Sound may have taken this approach, PrimaryBid's CEO Dave Mutton tells Proactive: ''The company has a very loyal existing shareholder base and one of their specific requirements for this offer was to be able to open it up to that shareholder base and let them participate''.

Mutton says he wasn't at all surprised at the level of interest there was for the company's stock as it's a very large company with keen shareholders.

In a statement Sound Chief James Parsons said: “Sound Energy values its private investor base and has chosen this structure to enable the introduction of institutions to the register whilst also re-affirming our commitment to treat private investors fairly.”

]]> Oil price, Sound Energy, Providence Resources, Faroe Petroleum, CEO Interview, And finally... Thu, 24 Nov 2016 11:38:00 +0000 Oil price

A very Happy Thanksgiving to the many readers over the pond….
If I had written a blog yesterday the oil price piece might have said that the Opec technical committee had proposed that a 4-4.5% cut excluding Nigeria and Libya might do the trick. Not knowing what Iraq might do makes life more interesting but that would certainly take a tad under 1.5m b/d off Opec supply bringing the total down to around 32.25m b/d, certainly enough to bring some confidence back to the market. Today it seems there is good news and bad news, for the former it looks like Iraq might just be on board to participate but regarding the latter I suspect Iran won’t.  This just leaves Russia, who will be in Vienna for the pre-meetings and are likely freezers, which is probably about as good as one might hope for.
Finally because of Thanksgiving a lot of the data is out early this week, the EIA inventory stats showed a draw of 1.3m barrels when analysts were predicting a rise of 290/- and with refinery utilisation up 1.6% at 90.8% there was no surprise to see gasoline inventories up by 2.3m barrels.
Natural gas saw its first draw of the season as the price crept above $3 again and in the rig count oil units were up 3 at 474 units.

Sound Energy

Sound has announced the latest flow rates from the TE-7 well at Tendrara and a raise of £24m+. The flow rate was 32 mmscf/d , significantly above the company’s pre-drill estimates and they estimate that it has the potential of 40 mmscf/d with a 50% draw-down. The well now goes to the EWT for planning purposes.
As for the raise, the company is fully underwritten for £24.1m at 81p so no discount and under the platform retail as well as other investors can participate if they do it today. The proceeds are for the development of Tendrara and it makes eminent sense to raise money at this price if it is being offered. There is no surprise that CEO James Parsons has used this novel, and apparently first for Aim, way of enabling its substantial retail investor base to participate alongside institutions and it will be interesting to see how the process goes. Sound has with this discovery in Morocco and the enthusiastic backing of a large band of retail shareholders got to a market cap recently at £500m and with the outpost well scheduled for the new year there is plenty to look forward to.

Providence Resources

Providence is not letting the grass grow under its feet either, it has secured a rig by signing up with Stena for the well on Druid/Drombeg which is scheduled for June of next year. The rate is $185/- a day which is about a third of the rate once achieved and comes with a one well extension. Obviously some way off but this will be a key well next summer on many levels.

Faroe Petroleum

Faroe is a valuable member of the bucket list and for a long time now I have been trying to get CEO Graham Stewart into the TipTV studios for an interview. The link to the interview is below and I urge you to watch it even if you are not a Faroe shareholder, it demonstrates how the company is run and on what guiding principles it is based.

And finally…

Both the Noisy Neighbours and the Gooners will be joining the Foxes in the next round of the Champions League but i’m afraid that the party is over for Celtic this year.
Tonight it’s the Boropa Cup and the Saints are at Sparta Prague whilst Feyenoord are due at the Theatre of Dreams.
And there may be a few sore heads in the sector today after the Brindex Dinner last night, although a mole tells me that it was a rather muted affair, probably as the blog wasnt represented owing to a lack of an invitation!

]]> Today's Market View - IronRidge Resources Limited, SolGold Plc, ZincOx Resources Plc Thu, 24 Nov 2016 11:06:00 +0000 IronRidge Resources* (LON:IRR) – Gold portfolio secured in Ivory Coast

SolGold* (LON:SOLG) – Cascabel exploration update

ZincOx (LON:ZOX) Suspended – MOU signed with Korea Zinc on joint design and development of new recycling plant in Vietnam

The US$ index is trading at the highest in more than a decade amid solid economic data strengthening the policy tightening case.

Gold prices are flat trading close to the lowest level since Feb this year.

Holdings in gold ETFs contracted for a 10th consecutive day, as investors are reducing positions in the non-yielding metal.

On a positive note, copper, zinc and lead are having a good day while iron ore prices have nearly made up all losses incurred last week.

Iron ore futures climbed 2.9% today closing a little way off a one-year high (for Jan futures) recorded last week.

Brent is little changed today despite comments by Iraq’s prime minster that the country will agree to cut production as part of the OPEC deal in contrast to previous calls for an exemption.

US government debt – who is going to buy new US government bonds

We are wondering who is going to buy new US government bond issues – to fund Trump’s new infrastructure plans.

Middle Eastern sovereign funds are depleted by low oil prices and certain Trump comments may not have endeared him to leaders in this region.

China is also not happy with Trump comments about trade barriers and may not wish to support his growth plans.

The US dollar has strengthened making US Treasuries look more expensive compared with local currencies.

Fund flows back into the US dollar may potentially spark a collapse in weaker emerging market currencies and starve local markets of capital.

While many other investors will buy the relative safety of US Treasuries we wonder how high US rates will need to go to attract sufficient funds.

The world changed with the election of Donald Trump.  Trump’s selection of key personnel around him is further evidence of this change and of his likely hard line stance towards other nations.

Trump’s impact on the US dollar and on Fed interest rates is going to affect the rest of the world though it is still too early to know how this is going to play out.

If Trump gets the cash to rebuild American infrastructure then demand for metals will rise in the US but this may be tempered by slower growth elsewhere.

Skyscanner sold to Chinese group for £1.4bn

The sale serves to highlight the re-emergence of Chinese companies acquiring overseas businesses.

Lundin Mining is also selling its 30% share in the Tenke Fungurume copper, cobalt mine in the Congo for $1.14bn.

Health & safety going mad

The advertising watchdog has gone bonkers and banned an ad by Heinz which shows a teenager drumming out a tune on a tin of Heinz Baked beans.  Apparently teenagers might cut themselves by drumming out tunes on the serrated edges of opened cans.

Given that we all face greater dangers on a daily basis we have to wonder what else they the authorities will ban and where the teenagers of today will learn the basic skills that help them better avoid stupid accidents in the future.

Dow Jones Industrials  +0.31% at 19,083 Thanksgiving today. Market closed
Nikkei 225        +0.94% at 18,333 
HK Hang Seng   -0.30% at 22,608 
Shanghai Composite    +0.02% at   3,242
FTSE 350 Mining          0% at 14,986 FTSE 350 +104% since 1st January
AIM Basic Resources   -1.08% at  2,406 AIM Basic Resources +48% since 1st January

Economic News

US – Durable goods orders surprised on the upside in Oct while FOMC Nov meeting minutes showed members are thought it was appropriate to raise rates “relatively soon”.

A pick up in core durable goods suggest business investment may be finally changing its trend following declines in spending by the energy sector amid lower oil prices.

With US elections results uncertainty behind us and the latest economic data demonstrating good growth momentum, the Dec hike has now been fully priced by the market given the implied probability of the move at 100%, according to Bloomberg.

Looking past 2016, the FOMC members appeared unconvinced to accelerate the pace of tightening next year beyond the previously guided two rate increases.

Germany – Business sentiment came in strong in Nov confirming that “the economic upturn in Germany remains intact”, according to Ifo Institute.

Despite a slight drop in the expectations index this month, the sentiment held up well with the gauge hovering around a two-year high.

Ifo Current Assessment: 115.6 v 115.1 in Oct and 115.0 forecast.

Ifo Expectations: 105.5 v 105.9 in Oct and 106.0 forecast.

UK – New budget guides for an extra £122bn in borrowing by 2020-21 versus previous forecasts prepared in Mar with the OBR estimating than a little less to be due to the decision to leave the EU.

The economy is expected to grow at a slightly higher rate in 2016, while medium term forecasts have been brought down on “lower investment and weaker consumer demand, driven respectively, by greater uncertainty and by higher inflation resulting from sterling depreciation”.

2016 growth to come in at 2.1% v Mar estimates for 2.0%.

2017 growth expected at 1.4%, down from 2.2%.

Overall 2016-2020 growth has been brought down to 7.4% from 8.8% assuming the UK leaves the EU by Apr/19.

CPI inflation driven by the weaker pound is expected to climb from 0.9% in Oct to above 2% in early 2017 and peak at 2.6% in mid-18.

China – platform collapse at a new power station in China kills 40

The collapse serves to highlight the need for rigorous health and safety procedures in major construction projects.

Some workers remain trapped in the tangled remains of the collapsed steel platform and concrete slabs.

While these incidents appear more common in China this may partially be due to the ongoing high level of construction activity in the region.


US$1.0554/eur vs 1.0607/eur yesterday.   Yen 113.03/$ vs 111.04/$.   SAr 14.105/$ vs 14.085/$.   $1.245/gbp vs $1.238/gbp.    

0.740/aud vs 0.742/aud.   CNY 6.917/$ vs 6.898/$ – Yuan weakens further

Commodity News

Precious metals:

Gold US$1,188/oz vs US$1,212/oz yesterday 

Gold ETFs 61.2moz vs 61.6moz yesterday 

Platinum US$917/oz vs US$940/oz yesterday

Palladium US$733/oz vs US$744/oz yesterday 

Silver US$16.35/oz vs US$16.64/oz yesterday

Base metals:   

Copper US$ 5,865/t vs US$5,589/t yesterday 

Aluminium US$ 1,772/t vs US$1,764/t yesterday

Nickel US$ 11,630/t vs US$11,365/t yesterday 

Zinc US$ 2,698/t vs US$2,592/t yesterday

Lead US$ 2,242/t vs US$2,198/t yesterday

Tin US$ 21,285/t vs US$21,200/t yesterday


Oil US$49.1/bbl vs US$49.2/bbl yesterday 

Natural Gas US$3.011/mmbtu vs US$2.957/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$73.0/t vs US$71.5/t 

Chinese steel rebar 25mm US$452.5/t vs US$452.2/t

Thermal coal (1st year forward cif ARA) US$64.0/t vs US$68.5/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unch

Ordinary hard coking coal is $270.0/t vs $270.0/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged.  Price will have to start rising sometime soon if Trump goes for growth.

Company News

IronRidge Resources* (LON:IRR) 16.5p, Mkt Cap £39m – Gold portfolio secured in Ivory Coast

IronRidge which holds concessions for iron ore in Gabon, gold in Chad, lithium in Ghana and gold, copper and other minerals Australia is taking on a highly prospective gold portfolio in the Ivory Coast.

The tenement portfolio covers 2,310sqkm including artisanal workings over an 8km strike at Kineta North.

The region covers Birimian greenstones which are generally known to host multi-million ounce gold deposits.

The license includes four principal gold bearing structures with two of these as splay structures off the Sassandra Shear zone.  Similar structures host the Syama at 7moz and Tongon 5moz gold mines in the north of the Ivory Coast.

Structures to the south also include Ahafo at 23moz, Bibiani 7moz and Chirano at 5moz.

Kineta North (100%):  The Kineta North appears to be located on the same structural shear as the Wa 2.2moz and Konkera 3.3moz which is now held by Centamin.

Pictures in the IronRidge press release show a larger scale artisanal pit and underground workings.  Atrisinal miners are good at finding gold mines but are often held back by the water table and ground conditions which often kill workers in lower levels.

Understanding the potential of these diggings to host much larger gold discoveries is a skill and an art with the potential to reveal multi-million gold discoveries particularly where the workings are show the presence of gold mineralisation at key intersections along structural shears.

Bianouan (100%):  lies at the south-western extension of a structural setting which hosts the Ahafo 23moz, Bibiani, 7Moz and Chirano 5moz structures.

Bodite (100%):  is a different sort of geology with gold seen in Birimian metasediments and a where a thicker package of turbidite sequence rocks are intruded by more fractionated granitic intrusives.  Turbidite structures are formed from deep water sedimentary flows often in underwater avalanches.

This setting is similar that which hosts Siguiri 13.3moz and Lefa 8moz.

The team:  The IronRidge team, led by Nick Mather are expert at identifying and locating interesting mineral prospects.  They have a proven track record as project generators and use a combination of high-tech and traditional geological techniques to evaluate the potential of their projects.  They know what makes a good project for sale to a major and equally they know how not to waste too much time on projects of lesser value.

The license agreement allows IronRidge to earn into 100% of each project through expenditure and feasibility study work and also gives an NSR of 2.5% to the vendors of which 40-50% may be acquired for US$2-3m at any time.  The deal demonstrates an new found co-operation between license holders and explorers which should serve to advance the projects for both parties.

SolGold* (LON:SOLG) 22.4p, Mkt Cap £334m – Cascabel exploration update

SolGold report that Hole 18 has intersected visibly strong copper mineralisation at Hole 18 on the Alpala property at Cascabel in Ecuador.

The company states that visible copper mineralisation is seen from 903.9m depth to 1,321.5m with the intensity and veining of the mineralisation increasing with depth as drilling continues towards the target depth of 2,300m.

Intense veining of up to 48% of the total rock mass has been observed.

The team currently have three rigs at Alpala.

Hole 19 is currently at a depth of 153m

Hole 20R is at a depth of 321m and should serve to enable another seven directional drilling daughter holes testing up to 650m below the thickest and richest part of the Alpala deposit.

ZincOx (LON:ZOX) Suspended – MOU signed with Korea Zinc on joint design and development of new recycling plant in Vietnam

ZincOx is looking to remerge from the ‘ashes’ or should we say the ‘Electric Arc Furnace Dust’ to develop a new recycling plant in Vietnam.

The press release is short on technical details on the project but does tell us that it’s a 51:49 joint venture in favour of Korea Zinc and that the ‘Definitive Development Study’ is expected to cost about $2.5m.  If this cost rises to >$3m then ZincOx’s interest will be diluted proportionately though ZincOx will be able to buy back its interest to 49% in the following six months.

The new Vietnam recycling plant will be based on ZincOx’s developed Rotary Hearth Furnace technology and with capacity to treat 100,000tpa of EAFD.  We guess this could result in 30,000t of high quality zinc oxide (80% zn) production worth around twice as much as zinc concentrate plus some by-product iron.

This should lead to a significant increase in sales for a relatively modest increase in overall operating cost leading to a substantial uplift in margin, value and profit compared with the last plant built.  We believe the ZincOx plant built in Korea is now working well and enjoying the benefits of the significant uplift in zinc prices since Korea Zinc took control of 91.3% of the plant as part of a financial restructuring during the prolonged commissioning process.

ZincOx shares were suspended on 28th October and must requote within six months to avert delisting.

Debt:  ZincOx is carrying £3.78m of corporate loan notes with interest accruing at 10%pa from 1st August 2016 and are due for repayment in January 2018.

Assets:  ZincOx retains an 8.7% interest in the Korea Recycling Plant which it designed and built.  Very sadly extended plant commissioning combined with prevailing low zinc prices allowed Korea Zinc to take control and majority ownership of the plant just ahead of a recent and sustained rise in Zinc prices.

The value of Zincox’s stake in Korean Zinc Recycling Plant should now be substantially more than the last implied value of $6.3m.

ZincOx also owns what is described as a valuable plot of industrial land in Turkey.

Conclusion:  It’s good to see ZincOx re-emerge from losing control of its Korea Zinc Plant.  It is interesting to note that Korea Zinc are still working as cooperating partners with the ZincOx team.  Korea Zinc must respect the skill and knowhow of the ZincOx team and must also need to utilise these skills to advance with their next EAFD project.

]]> Zak Mir says Sound Energy is a ‘star stock’ that can head back to 100p Thu, 24 Nov 2016 10:03:00 +0000 Sound Energy has been a ‘star stock’ of the year to date, says technical analyst Zak Mir, who is looking for the share to head back to the recent highs of 100p. 
Studying the Sound Energy chart, in a Tip TV segment for Proactive Investors, Mir says: “From July its up from 20p to hitting 100p in September, and it is still consolidating quite well.”
The chartist notes the share’s 50 day average is presently around the 83p, and support is at 70p.
“… a break above that [moving average], hopefully over the next few days or couple of weeks, and we could at least revisit the highs,” Mir says.
“Support is towards the 70p and for people who are not in this particular stock at the moment that would probably be the area to look to go long.”
]]> Today's Market View - BlueRock Diamonds Plc, Medusa Mining Limited, Norilsk Nickel, Shanta Gold Limited Wed, 23 Nov 2016 10:53:00 +0000 BlueRock Diamonds Plc (LON:BRD) – plant improvements finished ahead of time
Medusa Mining Limited (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track
Norilsk Nickel (NILSY US) - Norilsk joins United nations Global Compact
Shanta Gold Limited (LON:SHG) – Site visit presentation

Metal markets along with the US$ index and Brent are relatively flat this morning.

One of the exceptions is iron ore futures which climbed 7.3% today on the Dalian Commodity Exchange.

Iron ore prices volatility is reported at the highest level in six years with Dalian futures seen dropping 10% last week after climbing 23% in the period to Nov 11.

The benchmark spot price climbed to $74.9/t compared with a two year high of $79.8/t recorded earlier this month, according to Metal Bulletin.

Stornoway to sell 91,000cts of stones from new Renard diamond mine in the Otish mountains of Quebec

Dominion Diamonds moving HQ to Calgary in move to cut costs

Dow Jones Industrials  +0.35% at 19,024 Thanksgiving tomorrow
Nikkei 225    at 18,163  Bank Holiday in Japan today
HK Hang Seng   -0.01% at 22,677 
Shanghai Composite    -0.22% at   3,241
FTSE 350 Mining   +1.50% at 15,037 FTSE 350 +105% since 1st January
AIM Basic Resources   +0.51% at  2,433 AIM Basic Resources +49% since 1st January

Economic News

Eurozone – Activity in the single currency zone advanced to the highest in 11-months on climbing order books

Employment increased at one of the strongest rates since early 2008 with inflation pressures reported to be at the highest for over five years.

Markit Manufacturing PMI (Nov): 53.7 v 53.5 in Oct and 53.3 forecast.

Markit Services PMI (Nov): 54.1 v 52.8 in Oct and 52.9 forecast

Markit Composite PMI (Nov): 54.1 v 53.3 in Oct and 53.3 forecast.

Germany – Manufacturing held up well in Nov with the pace of growth holding up close to the highest level in nearly two years

Services PMI hit the strongest reading in six months.

New business orders including export markets came in strong.

Input inflation is reported to have accelerated to the fastest rate since Mar/12 on higher prices for raw materials including aluminium and steel as well as weaker euro.

“Although the PMI failed to further build on October’s ten-month high, the latest survey results highlight that Germany’s private sector economy remains in good shape in Nov,” Markit said.

“Moreover, the data suggest that economic growth has picked up from the meagre 0.2% rate in the third quarter.”

Markit Manufacturing PMI (Nov): 54.4 v 55.0 in Oct and 54.8 forecast.

Markit Services PMI (Nov): 55.0 v 54.2 in Oct and 54.0 forecast.

Markit Composite PMI (Nov): 54.9 v 55.1 in Oct and 55.0 forecast.

France – Private sector growth held up well in Nov driven by stronger performance from the services sector

New business increased for the fifth consecutive month with orders in manufacturing broadly unchanged and gains led by services sector.

Manufacturing input costs are said to have recorded the sharpest increase recorded in the manufacturing sector in nearly five years.

Markit Manufacturing PMI (Nov): 51.5 v 51.8 in Oct and 51.5 forecast.

Markit Services PMI (Nov): 52.6 v 51.4 in Oct and 51.9 forecast.

Markit Composite PMI (Nov): 52.3 v 51.6 in Oct and 51.9 forecast.

South Korea – State prosecutors raided offices of Samsung Group and the National Pension Service, the nation’s largest pension fund, as part of the investigation over Samsung contributions into foundations linked to Choi Soon-sil, a confidante of the current South Korea President.

Local media report that investigators are looking into NPS’s decision to vote through the $8bn merger of Samsung C&T and Cheil Industries.

Prosecutors allege that Samsung transferred €2.8m to a company co-owned by Ms Choi in return for the President approval of the deal.

Nigeria – central bank keeps rates on hold as economy deteriorates

Lowish oil prices continue to deepen the recession in Nigeria with the central bank holding rates in an attempt to support the economy.

South Africa – Q3 official unemployment rises to 27.1% highest level in 13 years

That’s 5.9m people without jobs vs 5.6m in Q2.

The unemployment rate is 36.3% when including people who have given up looking for jobs


US$1.0607/eur vs 1.0646/eur yesterday.   Yen 111.04/$ vs 110.72/$.   SAr 14.085/$ vs 14.091/$.   $1.238/gbp vs $1.249/gbp.     

0.742/aud vs 0.740/aud.   CNY 6.898/$ vs 6.885/$ – Yuan weakens further

Commodity News

Precious metals:

Gold US$1,212/oz vs US$1,218/oz yesterday 

Gold ETFs 61.6moz vs 61.8moz yesterday 

Platinum US$940/oz vs US$948/oz yesterday 

Palladium US$744/oz vs US$741/oz yesterday 

Silver US$16.64/oz vs US$16.87/oz yesterday

Base metals:   

Copper US$ 5,589/t vs US$5,664/t yesterday 

Aluminium US$ 1,764/t vs US$1,748/t yesterday 

Nickel US$ 11,365/t vs US$11,445/t yesterday 

Zinc US$ 2,592/t vs US$2,627/t yesterday

Lead US$ 2,198/t vs US$2,204/t yesterday

Tin US$ 21,200/t vs US$21,095/t yesterday 


Oil US$49.2/bbl vs US$49.6/bbl yesterday 

Natural Gas US$2.957/mmbtu vs US$2.981/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday 


Iron ore 62% Fe spot (cfr Tianjin) US$71.5/t vs US$69.0/t 

Chinese steel rebar 25mm US$452.2/t vs US$446.6/t 

Thermal coal (1st year forward cif ARA) US$68.5/t vs US$67.0/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unch

Ordinary hard coking coal is $270.0/t vs $270.0/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged.  Price will have to start rising sometime soon if Trump goes for growth.

Company News

Dominion Diamonds moving HQ to Calgary in move to cut costs

Stornoway to sell 91,000cts of stones from new Renard diamond mine in the Otish mountains of Quebec

Stornoway is on track to hit commercial production by the year end with the diamond sale a meaningful part of this target.

The average diamond value is expected to be $155/ct for 1.9mctpa over the first 10-year mine life

BlueRock Diamonds* (LON:BRD) 6.8p, Mkt Cap £2.6m – plant improvements finished ahead of time

BlueRock, which is now being led by CEO Adam Waugh is ahead of schedule in terms of repositioning of certain parts of the diamond recovery plant.

The repositioning of the pans and scrubber is now done and this should improve the flow of material while improving recovery rates.

Testing of the new plant configuration using stockpiled ore will take place over the next few weeks.

The new primary crushing and pre-screening circuits are due for completion by mid-January at a cost of around R2.5m

This should cut process costs, deliver better feed material and improve recoveries.

Contractors African Mining and Crushing (AMC) are to run the Drilling and Blasting, Loading and Hauling work at the mine with operational and cost benefits expected to follow from this new relationship.

The team are working on water management and are re-lining and repositioning the main primary water reservoir.  South Africa either seems to have too much or too little water depending on where you are these days.

The team are also recruiting to support ramping up to 24 hour processing.

Conclusion:  Adam Waugh is working hard to turn around the diamond mining and recovery operations.  The calculated grade of the mine should support economic operation assuming the plant is able to meet reasonable industry standards with the potential for recovery of special stones to boost profits.  Once the first diamond mine is working properly then BlueRock may consider development of other kimberlite pipes within their license area.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds

Medusa Mining (LON:MML, ASX:MML) – AGM statement shows infrastructure work at mine on track

Norilsk Nickel joins United nations Global Compact

The initiative run by the UN is in the area of Corporate Social Responsibility and Sustainable Development.

“The mission of the Global Compact is to promote recognition and practical application by businesses worldwide of ten basic principles on human rights, labour, environment and anti-corruption. Following these principles globally will provide for sustainable development going forward.”

Currently, the Global Compact brings together over 13,000 corporate participants and other stakeholders from more than 160 countries, with global industry leaders among them. By joining the initiative, the Global Compact participants gain access to the UN's knowledge and experience in corporate social responsibility and sustainable development, as well as to its expertise of the private sector.

Shanta Gold (LON:SHG) 11.4p, Mkt Cap £66.3m – Site visit presentation

Our intrepid mining analyst Simon Beardsmore is at the Shanta Gold, New Luika mine site today.  .

The company report production is stable at 60,000-90,000oz with a base case plan of 84,000ozpa from 2016 to 2020.

The plan will be updated in Q1 with new resources being added from the Ilunga and Elizabeth Hill prospects.

Costs which have been running at an impressive AISC 780/oz reflect the quality of the resource and the team.

Q3 costs were even better with Q3 AISC costs at US$621/oz and a cash cost of US$387/oz.

Initiatives could cut costs further with cheaper power, water, tailings, contractors and lower capital going foward

The Base Case mine plan does not include some 514,000oz of known resources. This give some confidence in the ability to extend the life of the mine by another 4-5 years in the short term depending on prevailing gold prices.

The mine started the new satellite Ilunga open pit in July.

Shanta finished mining at the Bauhinia Creek open pit in September

Underground operations at Bauhinia Creek in Q1 next year and should feed higher grade ore to the plant.

Open pit mining will continue at Ilunga, Shamba and Black Tree through most of 2017

While mining at the Jamhuri open pit finishes at the year end ore should be processed from this pit through most of 2017

Singida project:  further work is ongoing to better understand the potential of this resource with exploration ongoing and a pilot mining project in progress.

Higher expected grades should compensate for higher strip ratios expected through November and December.  We also expect lower contractor costs to help (this is our own assumption).

Exploration:  the exploration team have done well to add ounces to the production plan and we look forward to further news from Piet Prinsloo, the exploration manager and his team.

Conclusion:  Shanta’s presentation appears to deliver a positive message.  We look forward to confirmation of this from out analyst in the field.

]]> Today's Oil and Gas Update: Eland Oil and Gas PLC, JKX Oil and Gas, Pantheon Resources Plc Wed, 23 Nov 2016 10:17:00 +0000 Headlines

Eland Oil and Gas (LON:ELA – 36p) – Operational Update Underlines Opportunity and Issues

JKX Oil and Gas (LON:JKX – 17p) – October Production a Filip

Pantheon Resources (LON:PANR – 94p) – New Plan Needs to be Disclosed

In Brief

Eland Oil and Gas (LON:ELA – 36p) – Operational Update Underlines Opportunity and Issues: While today's update doesn't make for spectacular reading, what it does underline is the drive within the management team to continue to drive the Company forwards. Today's well results are a timely reminder of the scale of opportunity available in Nigeria, but again, the operational issues that continue to provide headwind to the Company’s progress, also underline the issues of operating in country. All in all, we believe that the Company outlook remains buoyant, and while production (and cash flow) is patchy currently, we believe that all necessary elements are in place to allow the Company to achieve sustainability.

JKX Oil and Gas (LON:JKX – 17p) – October Production a Filip: The production report for October underlines the fact that the management team are still focused on its task, despite the issues that have plagued it over the last 6 months, both internal and external. While this appears to be once again trending in the right direction, what is really needed is guidance and direction allied with measurable milestones. That way, management can start the process of rebuilding investor confidence and more importantly, value.

Pantheon Resources (LON:PANR – 94p) – New Plan Needs to be Disclosed: Today's results are a reminder of the progress that the Company has made over the last 12 months, albeit punctuated with the horizontal well drilling failure, which is still yet to be fully understood, especially when there is no issue drilling vertically, or indeed horizontally in the same formation elsewhere. With ample cash resources the immediate forward programme is assured, but given the fact that horizontal drilling will not be possible in its acreage, there is still a need to understand the impact that the new vertical development scenario has on its assumed horizontal development plan previously. More specifically, management need to highlight the differences in cash flows, and while costs are likely to be lower, the returns are too, and it’s how this all pivots on the programme's timing that's important.

]]> VSA Capital Market Movers - Millenial Lithium Wed, 23 Nov 2016 09:34:00 +0000 Millenial Lithium (CVE:ML)

Millenial Lithium (CVE:ML) has released the first results from its Phase 1 lithium brine drilling programme at its Pastos Grandes project in Argentina. The first drill hole encountered brine aquifers over a total of 94.5m, from surface to 13m, 19.5-66m and 157-192m. This was the depth of the hole meaning the brine remains open. Brine sampling demonstrated a density of 1.22g/cm3.

This initial programme is aiming to identify the depth of brine resources and this result which has identified deeper brines than historical drilling is therefore in line with the company’s expectations.

]]> Today's Market View - Amur Minerals Corporation, Asiamet Resources, DiamondCorp PLC, Sierra Rutile Ltd Tue, 22 Nov 2016 10:17:00 +0000 Amur Minerals Corporation (LON:AMC) – Agreement with the Far East Investment and Export Agency

Asiamet Resources (LON:ARS) – Metallurgical test-work from BKM

DiamondCorp PLC (LON:DCP) Suspended – Business rescue practitioner appointed

Sierra Rutile Ltd (LON:SRX) – Iluka merger cleared

Lundin – artisanal miners rush to Tenke Fungurume

13 clandestine miners have been killed in at the Tenke Fungurume mine site last week following an invasion of the property by artisanal miners.

The timing of this artisanal rush to the Tenke Fungurume mine which involved some 5,000-10,000 miners is interesting

We suspect the rush is related to some form of political interference with the timing potentially related to the agreement by Lundin Mining to sell its 30% stake in the mine to a Chinese group for $1.14bn.  Freeport also agreed to sell its 56% stake to China Molybdenum in May

Gecamines, the DRC state miner which holds a 20% stake in the mine is trying to block the sale

Risk on sentiment is driving metal prices and miners higher.

Four major US equities indices including Dow Jones, S&P500, Nasdaq and Russell 2000 hit record highs since 1999.

Brent climbed 5% yesterday reaching a three-week high on expectations for OPEC to agree a detailed plan to cut output during an official meeting next week.

Copper is up 1.7%/$94/t hovering around the highest in a week with reports demonstrating strong interest in the metal. US money managers hheld the largest net-long copper futures position on record as of Nov 15, according to the CFTC data.

Gold prices increased slightly amid flat US$ index.

Jan iron ore futures jumped 3.3% on the Dalian Commodity Exchange on the back of reports suggesting issues with deliveries of the material due to bad weather. A jump in iron ore is mirrored in steel and coking coal markets.

LME stocks fall as metal is withdrawn from warehouses

Copper stocks fell 4,800t to 242,275t

Aluminium fell 8,050t to 2,144,100t

Zinc fell 75t 445,000t

Nickel stocks rose 1,026t to 367,482t

Tin fell 75t to a relatively modest 3,010t

Lead stocks fell 1,025 to 187,825t

Dow Jones Industrials  +0.47% at 18,957
Nikkei 225   +0.31% at 18,163
HK Hang Seng   +1.43% at 22,678 
Shanghai Composite    +0.94% at   3,248
FTSE 350 Mining   +3.17% at 14,688 FTSE 350 +100% since 1st January
AIM Basic Resources   +1.39% at   2,420 AIM Basic Resources +48% since 1st January

Economic News

Japan – Authorities lifted the most severe tsunami warning issued in the country in the last five years as the risks to life reduced.

A 7.4 magnitude earthquake struck off the coast of Fukushima this night causing no significant damages to residents or onshore infrastructure recorded.


US$1.0646/eur vs 1.0646/eur yesterday.   Yen 110.72/$ vs 110.67/$.   SAr 14.091/$ vs 14.230/$.   $1.249/gbp vs $1.235/gbp.     
0.740/aud vs 0.736/aud.   CNY 6.885/$ vs 6.894/$ – Yuan strengthens a touch but remains at an eight-year low vs the US dollar

Commodity News

Precious metals:

Gold US$1,218/oz vs US$1,216/oz yesterday 

Gold ETFs 61.8moz vs 62.1moz yesterday – ETF holdings continue to fall as investors cut lower yield investments in favor of equities and potential rate rise

Platinum US$948/oz vs US$932/oz yesterday – Market deficit has been cut to 170koz in 2016, down from previous estimates for a 520koz shortage, according to the World Platinum Investment Council.

A revision is attributed to softer Chinese jewellery sales on stronger than forecast recycling by retailers.

Global jewellery demand is set to decline 10%yoy this year.

Global deficit is expected to narrow to 100koz in 2017, marking the sixth consecutive annual deficit, with both supply and demand estimated to drop.

Above ground stockpiles are estimated to further come down to 2.1moz (YE16) and 2.0moz (YE17) compared with 2.3moz (YE15).

This equivalent to 14, 13 and 14 weeks of demand respectively.

Palladium US$741/oz vs US$730/oz yesterday 

Silver US$16.87/oz vs US$16.73/oz yesterday

Base metals:   

Copper US$ 5,664/t vs US$5,576/t yesterday –

Aluminium US$ 1,748/t vs US$1,715/t yesterday –

Nickel US$ 11,445/t vs US$11,165/t yesterday –

Zinc US$ 2,627/t vs US$2,586/t yesterday

Lead US$ 2,204/t vs US$2,185/t yesterday

Tin US$ 21,095/t vs US$20,585/t yesterday – Prices may hit $30,000/t in 2018/19 on the back of a market deficit as new supply lags demand growth, ITRI estimates suggest.

Tin market is set to record a 10-15kt deficit this year and same in 2017.

China, the world’s largest supplier of the metal, is expected to post a recovery in mine output in 2017.

Ore output fell 17.6%yoy in 2015 and is set to decline 6.0%yoy in 2016, according to Yunnan Tin estimates.

Indonesia, the second biggest producer, is expected to come in at 60-70kt (2015: 50kt; 2014: 76kt (USGS).


Oil US$49.6/bbl vs US$47.5/bbl yesterday 

Natural Gas US$2.981/mmbtu vs US$2.928/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday – Latest Japanese tsunami is unlikely to accelerate the return to full scale nuclear power generation in Japan.


Iron ore 62% Fe spot (cfr Tianjin) US$69.0/t vs US$67.3/t 

Chinese steel rebar 25mm US$446.6/t vs US$443.4/t 

Thermal coal (1st year forward cif ARA) US$67.0/t vs US$63.0/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – remains unchanged for a week, not sure exactly why?

Ordinary hard coking coal is $270.0/t vs $270.4/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-203/mtu unch last week – boringly unchanged.  Price will have to start rising sometime soon if Trump goes for growth.

Company News

Amur Minerals Corporation (LON:AMC) 9.1p, Mkt Cap £46.9m – Agreement with the Far East Investment and Export Agency

The Company signed a Financial Advisory Agreement with the government Far East Investment and Export Agency (FEIE).

The FEIE Agency is a newly established organisation, a subordinate of the Far East Development Ministry, responsible for attracting investment and finding strategic partners in local projects.

In particular, the Agency is reported to have access to an extensive network of investors and trading companies in Russia, India and China.

“We will use our core investment banking experience and wide investor network to provide the development of Amur’s Kun Manie nickel project with necessary capital,” Petr Shelakhaev, the head of the FEIE said.

The team will continue cooperation with the Far East Development Fund (FEDF) regarding the Kun Manie infrastructure development

Conclusion: Local authorities remain supportive of the Kun Manie nickel/copper project with the FEIE Agency offering assistance in attracting development funds.

Asiamet Resources (LON:ARS) 2.7 pence, Mkt Cap £17.0m – Metallurgical test-work from BKM

Asiamet has reported results of metallurgical testing on samples from its Beruang Kanan Main (BKM) deposit in central Kalimantan.

The testing addressed two main aspects of the plant; the  crushing characteristics of the ore types within the proposed mining area; and the leachability and potential for the generation of acid drainage.

Tests have shown that “The BKM ore types will require mineral crushing [and will produce] … Relatively low wear rates … for the metal components within the crushing plant.” These characteristics will require low energy within the crushing circuit and are “expected to provide a favourable capital cost outcome for the BKM crushing facilities.”

Geochemical testing of 79 samples of ore and waste has demonstrated “that the mineralogy of the BKM heap leach feed material will be acid generating and limit the need for acid importation to support the processing activities on site. This is considered a favourable outcome for the operating and capital cost requirements at the BKM heap leach facility.”

In our opinion, the acid generating capacity of the ore at BKM, while it clearly offers economic benefits as described, will also require a detailed plan to manage fluid movements within the site area and ensure that any potential for leakage of acidic water to the wider environment is minimised.

Addressing this issue, “Detailed waste and water management plans will be developed to ensure protection of water resources and incorporated into the Feasibility Study and Environmental and Social Impact Assessment (AMDAL) for the project.” The company is planning a second phase of geochemical assessment work to support the continuing assessments.

Conclusion: Testing indicates that crushing and leaching of BKM ore should be relatively low-cost and this work will be incorporated into the feasibility studies currently underway. We look forward to the release of the study which will help provide a view on the economics of the project. Today’s news in addition to the resources drilling programme which is finding shallow mineralisation should have a positive impact.

DiamondCorp PLC (LON:DCP) Suspended – Business rescue practitioner appointed

DiamondCorp which entered into Business Administration last week has appointed Daniel Terblanche of Deloitte & Touche as their business rescue practitioner in accordance with the provisions of section 129 of the Companies Act, 71 of 2008.

The company put the Lace mine into South African Business Administration to protect the asset against its creditors and to preserve the mine for a potential rescue or sale.  Business Administration is the equivalent to Chapter 11 in the US.  The mine is likely to remain closed for more than 12 weeks according to a report on ‘’ which reckons the mine would take more than seven days to pump the production level dry.  That is once the pumps are reinstated.

The mine was forced to take this drastic action following severe flooding in the region which caused the Lace mine to suddenly flood in an event which overwhelmed the mine pumping system and forced its evacuation.

Pictures show water in the historic open pit and water in the decline.  There were two extreme thunderstorms on November 11 which resulted in almost 90mm of rain in just over an hour equivalent to almost a third of annual rainfall at the mine.

Sierra Rutile Ltd (LON:SRX) 34.5p, Mkt Cap £205.5m – Iluka merger cleared

Sierra Rutile and Iluka Resources have announced that the German Antitrust Authority has cleared the merger between the two companies.

In statements released by Sierra Rutile and Iluka Resources the companies stated “The Merger is now expected to become effective and closing is expected to occur on or around 29 November 2016.”

Sierra Rutile’s shareholders have previously approved the merger and  the clearance by the German investigation has removed the impediment to completion of the deal in which Sierra Rutile shareholders are to receive 36p/share in cash.

]]> Today's Oil and Gas Update: Union Jack Oil PLC Tue, 22 Nov 2016 09:03:00 +0000 Headlines

In Brief:
Union Jack Oil* (LON:UJO – 0.17p) – $4.9mm – $33.6mm (0.11p – 0.74p) – A Bigger Slice of Wressle

In Brief

Union Jack Oil* (LON:UJO – 0.17p) – $4.9mm – $33.6mm (0.11p – 0.74p) – A Bigger Slice of Wressle: Todays news that the Company has completed the acquisition of an additional 3.34% interest in PEDL180 and PEDL182 for ~$0.75mm, and provides the Company with access to cash flows (once the field is commissioned), which in turn provides it with greater flexibility. The valuation remains $33.6mm (0.74p), of which $4.9mm (0.11p) is core.


]]> VSA Capital Market Movers - Asiamet Resources Tue, 22 Nov 2016 08:58:00 +0000 Asiamet Resources (LON:ARS)

Asiamet Resources (LON:ARS) has released a further positive update on its progress towards completing a feasibility study for the Beruang Kanan Main (BKM) copper project in Indonesia. The latest announcement relates to metallurgical and geochemical testwork for the design of the crushing circuit.

The tests show that the majority of the ore has a low crushing energy requirement and low wear-metal consumption which will benefit operating costs. Therefore there is also no need for additional equipment for the processing of harder ores and we believe that only a single stage crusher would be required benefitting the project’s capital cost.

In total 79 ore samples were tested with ten sent for metal content and short term metal leaching tests. These tests confirmed previous results which demonstrated that the leach material can be considered Potential Acid Forming. This reduces operating costs as it limits the volume of acid which must be imported and transported to site.

The latest announcement further underpins our confidence that the feasibility study will confirm the potential for the development of a low cost copper project.

We reiterate our Speculative Buy recommendation and target price of 6.2p/sh.

]]> Today's Market View - Kibo Mining and Tethyan Resources Mon, 21 Nov 2016 10:40:00 +0000 Kibo Mining (LON:KIBO) 7.1 pence, Mkt Cap £25.3m – Agreement signed with GE on Mbeya Coal to Power Project

Tethyan Resources (LON:TETH) 2.5 pence, Mkt Cap £2.3m – Raising £353,000

Chinese investors pile into commodities as Yuan continues to weaken

Copper prices regain upward momentum on strong demand for infrastructure in China and weaker supply growth

Iron ore and coal prices pull back but remain at high levels despite China raising rates and margins on futures trading

Chinese investors are piling into commodities as the US dollar continues to strengthen and as China allows its currency to depreciate against the US dollar.

President elect-Trump is likely to lower US corporation taxes bringing US dollars back into the US and to rebuild American infrastructure

Markets are increasingly pricing in a Fed Rate rise this year and further rises next year as the Fed moves to issue new treasuries into the market to cover Trump’s spending aspirations.

Middle Eastern and Chinese sovereign wealth funds are reported to have been sellers of US Treasuries this year leaving us wondering on who will buy new issues of US Treasuries going forward.

The Fed dare not go too far in terms of raising interest rates as it may damage US growth when coupled with the strong dollar.

The US Treasury may need to print new US dollar bills to pay for Trump’s expenditure plans, a move which could reverse US dollar gains and allow the Fed to maintain lower rates for longer

The impact of a significantly stronger dollar is hurting US exporters and also serves to raise the effective cost of US energy production versus overseas energy producers.  Trump pledged to help US coal miners.

Mining and oil stocks trade higher as FTSE falls

US$ index is slightly off following a five sessions’ winning strake which saw the index hitting the highest level in more than a decade.

Gold prices are up (+0.7%/+$8/oz) trading at $1,216/oz after sliding below the $1,205/oz level on Friday on US$ index gains.

Brent crude is trading higher ahead of the OPEC meeting in Vienna next week and Iran’s Oil Minister suggesting it is “highly probable” members will agree details of production cuts

Base metals are all up this morning as buying accelerated as Chinese investors are using commodities as a hedge against depreciating yuan.

Iron ore futures continued to fall on the back of increased Chinese trading charges and falling steel prices.

Dow Jones Industrials  -0.19% at 18,868
Nikkei 225   +0.77% at 18,106
HK Hang Seng   +0.06% at 22,358 
Shanghai Composite    +0.79% at  3,218
FTSE 350 Mining   +2.13% at 14,282 FTSE 350 +94% since 1st January
AIM Basic Resources   -1.07% at 2,387 AIM Basic Resources +46% since 1st January

Economic News

US – Fed minutes are unlikely to alter Dec rate hike expectations with the latest economic data coming strong and more hawkish comments made by FOMC members.

Markets currently suggest that a hike is a done deal with the probability of an increase stading at 98%. 

China – The recent industrial private report showed industrial sector remained in contraction last quarter amid state driven cutbacks of overcapacity, according to responses of 2,000 surveyed businesses.

The headline business sentiment index came in at 46 in Q3 signalling a decline in the sector activity, the Cheung Kong Graduate School of Business quarterly report read.

Large firms with a significant share of state owned companies in the category favoured better than medium and small sized companies, with respective readings of 48, 46 and 45.

The outlook remains weak as with inflation and overcapacity are forecast to “increase costs and hinder the recovery of the industrial economy”.

Shijiazhuang city stops production at steel and cement plants and cuts thermal coal power generation

Shijiazhuang city is taking drastic measures to meet emissions targets for PM 2.5 fine particles for the year.

The city produces around 15mt of steel representing around 2% of Chinese production

Shijiazhuang has also cut production by drug manufacturers as part of the measures.

The action serves to highlight China’s determination to cut pollution and to force companies to clean up


US$1.0646/eur vs 1.0602/eur yesterday.   Yen 110.67/$ vs 110.61/$.   SAr 14.230/$ vs 14.575/$.   $1.235/gbp vs $1.241/gbp.    

0.736/aud vs 0.738/aud.   CNY 6.894/$ vs 6.888/$.   – Another low in the Yuan as China continues to depreciate currency against the US Dollar

Commodity News

Precious metals:

Gold US$1,216/oz vs US$1,205/oz yesterday 

Gold ETFs 62.1moz vs 62.4moz yesterday 

Platinum US$932/oz vs US$926/oz yesterday

Palladium US$730/oz vs US$717/oz yesterday 

Silver US$16.73/oz vs US$16.51/oz yesterday

Base metals:   

Copper US$ 5,576/t vs US$5,427/t yesterday 

Aluminium US$ 1,715/t vs US$1,685/t yesterday – Aluminum stocks fall 2.9% in Japan

Nickel US$ 11,165/t vs US$11,045/t yesterday 

Zinc US$ 2,586/t vs US$2,516/t yesterday

Lead US$ 2,185/t vs US$2,144/t yesterday

Tin US$ 20,585/t vs US$20,105/t yesterday 


Oil US$47.5/bbl vs US$46.1/bbl yesterday 

Natural Gas US$2.928/mmbtu vs US$2.725/mmbtu yesterday

Uranium US$18.50/lb vs US$18.50/lb yesterday 


Iron ore 62% Fe spot (cfr Tianjin) US$67.3/t vs US$69.0/t –

Chinese steel rebar 25mm US$443.4/t vs US$444.3/t –

Thermal coal (1st year forward cif ARA) US$63.0/t vs US$64.5/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – remains unchanged for a week, not sure exactly why?

Ordinary hard coking coal is $270.4/t (Dalrymple Bay Coal Terminal)


Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News

Kibo Mining PLC (LON:KIBO) 7.1 pence, Mkt Cap £25.3m – Agreement signed with GE on Mbeya Coal to Power Project

Kibo Mining reports that it has now signed the previously announced agreement with General Electric (GE) to supply equipment, technology and services to the Mbeya Coal to Power Project (MCPP) in Tanzania.

Under the Agreement, GE will also assist in the implementation of the project which involves the development of a 250-350MW mine mouth thermal power station in at Rukwa in southwest Tanzania based on a 121m tonnes resource, of which 91% is classed as either measured or indicated, within 7 seams.

In addition to GE, Kibo Mining has previously  also signed an agreement with the China based contractor, SEPCO III, “granting it the right to become the the sole bidder for the contract to build the power plant component of the MCPP in exchange for SEPCO III refunding 50% of the development costs incurred by Kibo to date on the project. Kibo has alreadt received the first tranche of this funding in the amount of US$1.m million”.

As well as the technical partners for the MCPP, Kibo Mining uses Standard Bank as its Financial Advisor for the project.

The company is expecting to complete the integrated Bankable Feasibility Study (BFS), comprising a definitive coal mining study and a power pre-feasibility study shortly.

Conclusion: The MCPP appears to be moving forward as it assembles the team which will be required to turn the forthcoming BFS into reality.

Tethyan Resources (LON:TETH) 2.5 pence, Mkt Cap £2.3m – Raising £353,000

Tethyan Resources reports that Canadian listed Southern Arc Minerals has subscribed for 16.5m new shares at a price of CAD0.36 cents per share for a 15.44% interest in the company.

In addition, Southern Arc is purchasing a further 14.64m shares in the company from Newmont taking its interest to 29.15%. Two of Southern Arc’s nominees, John Proust and Michael Andrews are to join the Board of Tethyan.

Tethyan Resources is exploring copper and gold projects in Serbia and Bulgaria and recently started drilling at the Rudnitza porphyry copper prospect in Serbia where it is planning a programme of approximately 2500m of drilling in four or five holes to a maximum depth of 800m.

In addition to its investment in Tethyan Minerals, Southern Arc is reported to hold 43% of Canadian listed  Japan Gold Corp and a stake in Osisko Mining, also listed in Canada.

]]> Today's Oil and Gas Update: EnQuest PLC Mon, 21 Nov 2016 09:00:00 +0000 Headlines

In Brief:
EnQuest (LON:ENQ/ENQ SS – 28p/SEK3.09) – Coming Together

In Brief

EnQuest (LON:ENQ/ENQ SS – 28p/SEK3.09) – Coming Together: While the Company has faced significant headwinds fiscally, which to some extent will continue for some time to come, there is no doubt that operationally at least the Company has been firing on all cylinders. With the announcement of first oil from Scolty/Crathes and the impending sail away of the Kraken FPSO, we believe that provided oil prices don’t experience another significant downward leg, that the combined effect of Scolty/Crathes and Kraken (want is commissioned) will see the fiscal outlook of the Company improve significantly. Whilst further fundraising can’t be ruled out, the further into 2017 it goes without undertaking of fundraising, the less likely it comes. While investors can be rightly nonplussed at the way that the Company has run its finances, specifically failing to address the risks associated with its indebtedness, we believe that management has done well to get to this point and place the Company on more secure footing.

]]> VSA Capital Market Movers - Sula Iron & Gold Mon, 21 Nov 2016 08:42:00 +0000 Sula Iron & Gold (LON:SULA) has announced that it has raised approximately £1.17m through the issue of 558.7m shares at an issue price of 0.21p/sh. The directors of the company subscribed for a further 78m shares and in addition, the company has announced an Open Offer to raise up to £0.3m at the same price as the placing. The placing price represents a 7% discount to the previous close of 0.225p.

The proceeds will be used to further exploration work at the Ferensola gold project as well as for general working capital. A drilling campaign may now proceed and will likely take place both within the bounds of the existing JORC exploration target as well as the significantly larger Eastern Target area which was identified during the recent Induced Polarisation survey.

]]> Today's Market View - Randgold Resources, Strategic Minerals*, W Resources Fri, 18 Nov 2016 10:43:00 +0000 Randgold Resources (LON:RRS) – Exploration JV with Newcrest in Cote d’Ivoire
Strategic Minerals* (LON:SML) – Quarterly update September 2016
W Resources (LON:WRES) – Initial drilling results from Sao Martinho

Gold prices under pressure as US dollar hits 13.5 year high

India precipitated the fall in gold prices last Sunday under cover of news the Trump election with local press reports that the government may be considering a complete ban in the shipping of gold into India.  We presume this may have been prompted by the move by individuals to convert large denominated Rupee bills, which are being withdrawn, into gold with gold looking set to take over as India’s next black market currency.

Yellen says the Fed could raise rates relatively soon and that Trump has done nothing to change the Fed’s plan for a rate increase

The Fed may also raise rates to assist the Treasury in the issuance of bonds to fund future Trump infrastructure spending

Trump may also lower US corporation taxes as pledged to further repatriate US dollars held in overseas accounts

The flow of funds back into the US could strengthen the dollar further and cause further volatility in the Emerging Markets.

Emerging Markets are fragile and volatile markets at the best of times and a liquidity squeeze in S Korea and other developing nations could well precipitate further crisis.

The question for gold bugs is, how low will gold go as the US dollar strengthens before the next crisis causes the gold price to recover.

Given that currency markets have already priced much of the Trump move into the US dollar and that further strength will damage more exports then it may be that the move in the dollar and the fall in gold prices is largely done

It may also be that the Fed could print new US dollars rather than increasing its borrowings though we seem to be the only people considering this.  The inflationary impact of new money printing could be the deciding factor here.

Iron ore prices rising despite action taken by China’s authorities to reduce speculation in iron ore futures

The Iron ore 62% Fe spot (cfr Tianjin) rose to US$69.0/t from US$67.0/t yesterday despite the actions of the state to raise margins and increase costs in trading iron ore futures.

The resilience of the spot iron ore price suggests ongoing strong demand for imported seaborne iron ore reflecting a move to use better quality ores as coking coal prices remain at high levels.  Cutbacks in local iron ore and the virtual elimination of the use of titano-magnetite due to its higher cost is also helping Australian iron ore exporters to gain further sales and raise prices.

There are no current cyclones affecting iron ore shipping and production at present though the threat is elevated through the cyclone season

OPEC – Venezuela’s president, who badly needs the price of oil to rise comments that OPEC are ready to reach a forceful agreement to cut oil output

Trump’s election takes some of the pressure off oil producers to lower oil prices to remain competitive and defer the rollout of electric vehicles

Higher oil prices inevitably will feed through into significantly higher inflation in weaker currency regions serving to cut demand in these areas.

Egypt – to issue first gold licenses for seven years

Ethiopia – Newmont geologists comment that Ethiopia is particularly jumping out for its exploration teams

Kefi Minerals is one of very few western companies looking to develop and further explore gold assets in Ethiopia.

Dow Jones Industrials  +0.19% at 18,904
Nikkei 225   +0.59% at 17,967
HK Hang Seng   +0.37% at 22,344 
Shanghai Composite    -0.49% at  3,193
FTSE 350 Mining   -2.43% at 14,009 FTSE 350 +91% since 1st January
AIM Basic Resources   +0.38% at 2,413 AIM Basic Resources +48% since 1st January

Economic News

Mexico – raises overnight interest rate as Trump victory weakens the pesp
The victory of Donald Trump has increased the key overnight rate to 5.25% the highest since 2009 as Trump’s victory continues to hurt peso.

France – French finance minister lowers GDP growth for 2016 to 1.4% from 1.5%
The news contrasts with more positive economic in the UK suggesting that Brexit is hurting Europe more than the UK.

Chile – central bank maintains rates on hold
The Chile peso has fallen by 4.2% since Trumps election.  Higher copper prices are part of the decision

Japan - Prime Minister Shinzo Abe has described Donald Trump as a "trustworthy leader" after a meeting the US president-elect on Thursday
The Japanese leadership are proving themselves to be more diplomatic than many other leaders at present with positive comments of support towards the UK following Brexit.

Japan well understands the importance of strengthening its alliances with long term allies in the UK and US as China continues to undermine its economy through weakening the Yuan.

ECB - president comments, continued monetary support will a key ingredient for the economic outlook for the Eurozone
Greek debt issues are rearing their ugly head again with calls for IMF support again.

VW – cuts 30,000 jobs worldwide

Guinea – former minister of mines claims Stephen Din, head of Rio Tinto’s Guinea operation offered him a bribe in order to win back the half of Simandou which was sequestrated by BSG Resources
We wonder how credible this witness might be.

Donald Trump – refusing to go to court as the President-elect is too busy
The trial relates to claims of fraud over Trump’s Real Estate University.


US$1.0602/eur vs 1.0723/eur yesterday.   Yen 110.61/$ vs 109.51/$.   SAr 14.575/$ vs 14.265/$.   $1.241/gbp vs $1.247/gbp.     
0.738/aud vs 0.747/aud.   CNY 6.888/$ vs 6.872/$.   Yuan falls to lowest level for eight years

Euro falls to one year low against US dollar

Commodity News

Precious metals:

Gold US$1,205/oz vs US$1,228/oz yesterday –

Gold ETFs 62.4moz vs 62.7moz yesterday –

Platinum US$926/oz vs US$944/oz yesterday

Palladium US$717/oz vs US$719/oz yesterday –

Silver US$16.51/oz vs US$17.04/oz yesterday

Base metals:   

Copper US$ 5,427/t vs US$5,469/t yesterday – KGHM, the Polish copper miner is unlikely to drop its Sierra Gorda project in Chile despite a heavy writedown last year and political pressure in Poland.  KGHM has been looking to internationalise its business for as long as we can remember. (Reuters)

Aluminium US$ 1,685/t vs US$1,695/t yesterday

Nickel US$ 11,045/t vs US$11,315/t yesterday –

Zinc US$ 2,516/t vs US$2,535/t yesterday

Lead US$ 2,144/t vs US$2,158/t yesterday

Tin US$ 20,105/t vs US$20,260/t yesterday –


Oil US$46.1/bbl vs US$46.8/bbl yesterday –

Natural Gas US$2.725/mmbtu vs US$2.754/mmbtu yesterday

Uranium US$18.50/lb vs US$18.65/lb yesterday –


Iron ore 62% Fe spot (cfr Tianjin) US$69.0/t vs US$67.0/t –

Chinese steel rebar 25mm US$444.3/t vs US$446.3/t –

Thermal coal (1st year forward cif ARA) US$64.5/t vs US$64.5/t yesterday

Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – remains unchanged, not sure why?

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News

Randgold Resources (LON:RRS) 5700 pence, Mkt Cap £5.3bn – Exploration JV with Newcrest in Cote d’Ivoire

Randgold Resources reports that it has signed a heads of agreement to establish a joint-venture for exploration, development and mining in the south-east of Cote d’Ivoire

Randgold, which already operates the 89% owned Tongon mine in the northern part of the country, is to manage the exploration programme and any new mines which result.

The area covers the extension into Cote d’Ivoire of known gold belts in Ghana which Randgold Chief Executive, Mark Bristow, characterises as offering “the potential for the discovery of truly world class gold deposits [in] … an area that has not yet been explored in depth.”

Although it is in a different area of the country, in central Cote d’Ivoire, Newcrest has another exploration joint-venture in Cote d’Ivoire where it is spending a minimum of US$1.7m  by December 2018 on exploration of Kodal Minerals’* Dabakala gold licence in order to earn a 75% interest in the property.

It is unclear whether Dabakala would fall under the scope of the joint venture with Randgold, however, it seems likely that Newcrest’s exploration team will benefit in a professional sense from the additional technical involvement of Randgold’s team with their experience in exploration developing and running the Tongon operation.

In a recent comment, Mark Bristow noted that “We’ve always believed in the prospectivity of Côte d’Ivoire and we are becoming increasingly confident that it will deliver our next world-class discovery.”

Conclusion: Randgold and Newcrest’s decision to pool their exploration efforts should highlight the gold exploration potential of Cote d’Ivoire and bring the resources to bear to maximise the chances of a successful discovery.

*SP Angel acts as Financial Advisor and Broker to the Kodal Minerals.  *Robert Woodridge, a partner at SP Angel is also Chairman of Kodal Minerals.

Strategic Minerals* (LON:SML) 0.43 pence, Mkt Cap £5.2m – Quarterly update September 2016

Strategic Minerals has provided an update of activities in its three main business areas; the Cobre magnetite tailings business in New Mexico; the nickel sulphide exploration activity in W Australia; and the Redmoor tin/tungsten joint-venture at Redmoor in Cornwall.

Following the previously announced deal to secure a new major customer for its magnetite product, sales tonnages increased sharply to 7,686 tonnes for the quarter bringing 12 months sales to 30th September to 23,477 tonnes, a 68% increase over the equivalent 12 months to September 2015. The average unit sales price for the twelve months declined slightly to US$65.17/t from US$67.77/t “due to “bulk” discount pricing being applied. However, overall net profitability is expected to be maintained at the historical level of 45% of sales.”

In July, an agreement was reached with “the rail provider to the Cobre mine for US$675,000 to be paid in instalments with the final payment being made by 30 June 2017.”

In Western Australia, the company recently announced that, in conjunction with its joint-venture partner Rarus, it was funding further exploration work, including drilling, at the Hanns Camp and Mount Weld nickel and gold prospects.

The company has re-negotiated the timing of its subscription to take its ownership of the Redmoor tin/tungsten project in Cornwall in order to match timing of the company’s receipts from the rail settlement and the earnings from Cobre to the working capital requirements at Redmoor. Earlier this week the company also announced that the joint-venture had invited tenders for a 2-phase drilling programme at Redmoor during H1 2017.

At 30th September, the company had cash of US$0.51m on its balance sheet.

Conclusion: Strategic Minerals is building up sales and cash generation at its Cobre operation in the US and laying the foundations for further exploration in Australia and in Cornwall. We look forward to results as they come through.

*SP Angel act as Nomad and joint broker to Strategic Minerals alongside Optiva Securities

W Resources (LON:WRES) 0.495p, Mkt Cap £21.6m – Initial drilling results from Sao Martinho

W Resources has reported results from its first exploration drill hole on the Sao Martinho gold prospect near Portalegre in Portugal.

The hole (SMD-04) forms part of a 1500m drilling campaign which started in September and adds to pre-existing drilling work which outlines an indicated and inferred resource totalling 3.04m tonnes at an average grade of 1.04g/t gold. Inferred resources comprise approximately 85% of this total 112,000 oz resource.

Hole SMD-04 “intersected significant gold mineralisation in 6 levels including 2m at 4.2g/t and 2m at 7.6g/t.”, with individual mineralised intercepts ranging up to 8m wide and down to a maximum depth of 187.60m.

The company’s Chairman, Michael Masterman, commented “The pick-up of visual gold in subsequent holes 10 and 11 together with these first results bodes well for a very successful program.”

Conclusion: These initial results are encouraging, however, we expect that until more of the programme has been completed, the significance and potential of today’s announcement to expand the existing small, relatively low grade resource will not become apparent. We look forward to additional results as the drilling programme progresses.

]]> Oil price, Cape, President, Parkmead, Sundry-Enteq-Simon Hawkins-IGTV interview- And finally... Fri, 18 Nov 2016 10:28:00 +0000 Oil price
Having started off well yesterday with good news from the Opec participants and Russia the market went into reverse when Mrs Yellen spoke suggesting December would likely be a good time for a rate rise. With that came a strong greenback and whoosh, the oil price came back and is another 50 odd cents off again this morning.

Markets hate uncertainty and today’s news from Cape on the litigation front has given a proper dose of that to which the share price had responded negatively. The company has provisions on the EL side and has increased them by £9.7m but it is the PL side of the statement that looks more open-ended. Obviously the company had to prepare for the worst but the most dire consequences such as abandoning the strategic plan and consequently the dividend is also a possibility. I have to say that the market has always known about these law suits which are claimed and counter claimed but today’s statement appears to be that much more severe than hitherto-far and has spooked the market.
On trading, it seems that overall it is ‘in line’ but better on favourable currency moves, some recovery in Asia pacific is offset by the UK and the Middle East.  I hope that I can at some stage speak to the company about all this, I am a committed fan of the management and operationally all seems pretty much in line with my expectations but the tenor of the statement about the litigation seems to have taken a turn for the worse, hanging on in there…..

President Energy
President has responded to press speculation about Argentinian oil prices although I am not sure that it was entirely necessary. Followers of President, as well as Andes are well aware that a well publicised part of the Macri plan is to realign oil prices with WTI. Accordingly, although this year will remain at $55 next year the two will slowly move together, and so it should be. President has said that the IRR’s are not materially impacted at approximately 150%. Indeed if there are any local marginal producers in trouble out there one might expect Mr Levine to take advantage of them…

Prelims from PMG and very much in line with expectations but no idea of production levels in a statement which remains hardly user friendly, what a surprise. The Netherlands is doing well and Tom Cross is doing plenty of deals, particularly in the PDL development increasing his position and the balance sheet is very strong. A bucket list stock but probably one that may not survive if visibility remains poor although despite that progress seems to be good…

Enteq Upstream Interims today and revenues remain ‘disappointing’ although strong management action on costs means that cash on the balance sheet has risen again. A decent contract win in Saudi Arabia is good but wont make up in 2H the disappointing revenues. Enteq seem to be doing well outside North America but are still worried about the rig count, it is rising you know…
I am writing on Sirius at the moment but am saddened to see that Simon Hawkins has left the board for medical reasons. I wish him all the very best for a speedy and full recovery.

And finally…

Although England managed to polish off India for 455 the signs on the pitch are not good, those runs in the bank will be crucial, 72-3 as I write.

And it’s back to the Prem in the footy with some stand-out matches. The Gooners head for the Theatre of Dreams supremely confident of a victory whilst North London rivals Spurs are equally sure of beating the Hammers at White Hart Lane. The Noisy Neighbours are down in London to visit the Eagles whilst the HubCap Stealers are down south at the Saints. With Chelski at the Boro and an interesting derby between the Maccams and the Hull City Tigers there are opportunities all over the place.

And of course rugby is international, Fiji visit Twickenham, Japan go to Wales and Scotland take on Argentina at Murrayfield while Ireland can dream about a double against the All Blacks…

]]> Today's Oil and Gas Update: Premier Oil, Great Eastern Energy Fri, 18 Nov 2016 09:45:00 +0000 Headlines

Comment: If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?
Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas


Following Great Eastern Energy’s (the “Company”) interim statement today, which we comment on below, the Company discloses the fact that it was able to achieve ~$10.0/mcf in the period, which is jarring when set against the backdrop of significantly lower state gas prices, which is $2.5/mcf (dry basis). This underlines what a disaster Indian gas price policy is and why ultimately, the country will be unable to drive its domestic gas production forward in a meaningful manner. It is clear that the market will support prices ~4x that which is set via a manipulated formula.

While these are a number of significant projects on the horizon in India, we see the government's intervention in artificially suppressing the market price hampering any rapid progress and actually forcing significant delays on the sector.

If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief

Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?: Today's announcement makes for good reading, especially with regards to cost control and production outlook. Assessment of covenant breaches continues to be delayed until such times as the Company is confident it can meet them, and we don't blame them. With ~$2.8bn on net debt it is difficult to imagine the stress the management must be enduring, especially in the wake of its share buyback. While we are provided comfort by the majority of the statement, the one uncomfortable line, which appears right at the end of the statement, reads "....going forward, Premier plans to be cash flow positive at oil prices above $50/bbl...." If this is true to its word, then the Company, at current prices, looks as if it will face further difficulties. Given that group opex hovers around the ~$20/bbl mark, this is either a statement out of context , or a statement that of management's belief that post the debt restructuring, once all debt payments capex and other items are taken in to account, that this will be the new "free cash flow" breakeven price. If so, we need greater clarity and understanding what has precipitated this statement, otherwise alarm bells will start to ring, if there isn’t a little tinkle already. We will await the full results before opining either way.

Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas: Today's results underline a business that is continuing to make progress, and with management of liquid resources and debt payments accounting for the marginal bottom line cash flow, operationally at least the business continues to flourish. That said, we would caution against the Company's debt pile, which although manageable currently, should there be significant amendment to the licence terms imposed, specifically undermining the ability of the Company to set pricing according to the market, then servicing its debt might be difficult.

]]> Savannah Petroleum PLC signs 'extremely significant' deal for Nigeria exploration Thu, 17 Nov 2016 12:20:00 +0000 Savannah Petroleum PLC (LON:SAVP) has signed a three-way agreement in relation to the Nigerian section of the Central African Rift System.

The memorandum of understanding was co-signed by the New Nigeria Development Company Ltd (NNDC) and Nigeria National Petroleum Corporation (NNPC).

Chief executive Andrew Knott tells Proactive: ''Alongside that agreement we've also made several other announcements which I think in aggregate represent a very big step forward for us as a company''.

''NNDC is one of the largest  corporations in northern Nigeria - it's a very important and influential partner to have''.

The AIM quoted company expects to  enter into additional agreements with NNDC and NNPC over time, and it added that separate talks are taking place between them regarding other potential opportunities in Nigeria.

]]> Nighthawk shares tipped to rise to 1.7p by early 2017 Thu, 17 Nov 2016 11:59:00 +0000 Nighthawk Plc (LON:HAWK) shares are in a rising trend and could hit 1.7p by early 2017, according to technical analyst Zak Mir.
In a Tip TV segment for Proactive Investors Mir highlights that the share has been basing over the past six months or so, and a chart signal in the summer suggests positive momentum is resuming.
He notes that since then the shares continued to move sideways, and the turnaround has a been a slow one.
“We’ve had a sideways move with higher lows above the 1p level … looks as though we’re in a rising trend channel from April,” Mir added.
]]> Premier Oil faces a ‘big wall of resistance’ says chartist Zak Mir Thu, 17 Nov 2016 11:45:00 +0000 Premier Oil PLC (LON:PMO) shares are in the halfway house as investors wait for funding news, and technical analyst Zak Mir says wait for more signs that the recovery is on.
He added that after the share price backed off from recent peaks, seen around 80p last month, the price now faces a “big wall of resistance” to get back to 80p and above though it remains supported above 50p.
“If you are looking for further evidence of recovery here you’d wait for a break of the 200-day moving average of 61p before assuming that we’ll see 80p again,” Mir added.
]]> Today's Market View - Metminco, Rio Tinto, Shanta Gold, SolGold, Vast Resources and Xtract Resources Thu, 17 Nov 2016 10:37:00 +0000 Metminco* (LON:MNC) – Raising A$4.85m to advance the Miraflores project
Rio Tinto (LON:RIO) –– Contracts terminated for key staff following investigation of payments at Simandou
Shanta Gold (LON:SHG) – Receipt of US$5.25m advance on silver streaming
SolGold* (SOLG LN) – Annual report
Vast Resources (LON:VAST) – AGM Resolutions 7 and 8 voted down by shareholder dissent
Xtract Resources (LON:XTR) –Manica review opts for open pit mining

FTSE 100 rises led by miners trading higher despite continuing sell off in China iron ore futures and little change in precious and base metals prices
• Janet Yellen to address Congress this afternoon with comments on the economy and possibly new president plans to cut taxes and raise infrastructure spending.
• Futures markets are implying a 94% chance of a US Fed rate hike during the Dec 14 meeting.
• Brent is little changed this morning as a rebound in oil prices paused on reports of increased US inventories.
• Gold seen stabilising as the US$ index rally paused following eight consecutive days of gains.
• Chinese iron ore futures continued to fall (-1.7%) extending losses to three days now (-10.3% since hitting this year’s high on Monday) and following weakening steel prices (-1.8%) lower.

Dow Jones Industrials  -0.29% at 18,868
Nikkei 225   0.00% at 17,863
HK Hang Seng   -0.08% at 22,263 
Shanghai Composite    +0.11% at  3,208
FTSE 350 Mining   +1.26% at 14,293 FTSE 350 +95% since 1st January
AIM Basic Resources   +0.12% at 2,404 AIM Basic Resources +47% since 1st January

Economic News
US – Industrial production came in weaker than forecast in Oct while core producer prices posted a mom decline same month driven by falls in the services sector.
• Industrial output saw a recovery in oil and gas drilling, while warmer temperatures depressed utility use.
• A decline in input prices is likely to prove temporary given increasing wage pressures and pro-stimulus new US president focus.
• Although, a continuing strength in the US$ is expected to exercise downwards pressure on imported goods.
• A fall in services prices is said to be driven by declines in fees charged by securities brokerages and related services.
• Consumer prices inflation is due later today with estimates for the gauge to have held up above the 2.0% level through Oct, a little lower than a multi-year high of 2.3% recorded in Aug.
Date Index Period   Actual Est Previous
Tuesday Retail Sales Oct %mom 0.8 0.6 1.0 (revised from 0.6)
  Core Retail Sales (ex Auto) Oct %mom 0.8 0.5 0.7 (revised from 0.5)
  Retail Control Group Oct %mom 0.8 0.4 0.3 (revised from 0.1)
Wednesday Core PPI Oct %mom -0.2 0.2 0.2
  Core PPI Oct %yoy 1.2 1.6 1.2
  Industrial Production Oct %mom 0.0 0.2 -0.2 (revised from 0.1)
  Capacity Utilization Oct % 75.3 75.5 75.4
Thursday Weekly Jobless Claims       257k 254k
Core CPI Oct %mom  0.2 0.1
  Core CPI Oct %yoy   2.2 2.2
Source: Bloomberg     

France – Domestic unemployment rate unexpectedly ticked up in Q3/16 contrasting from the recent trend of a declining number of people unemployed.
• Domestic Unemployment Rate (%): 9.7 v 9.6 in Q2/16 and 9.6 forecast.
• Change in Unemployment: +31k v -69k in Q2/16 (revised from -74k).

UK – Oct retail sales came in stronger than forecast with clothing and footwear being major growth contributors.
• “Cooler temperatures in Oct boosted clothing sales as shoppers took their cue to purchase winter clothing, while the supermarket benefited from Halloween,” ONS said.
• “This has also coincided with the strongest growth in internet sales seen in five years.”
• After having climbed slightly on good retail sales data the USDGBP exchange rate is trading flat at 1.248.
• Core Retail Sales (%mom): 2.0 v 0.1 (revised from 0.0) in Sep and 0.4 forecast.
• Core Retail Sales (%yoy): 7.6 v 4.0 in Sep and 5.4 forecast.
• The number of EU nationals working in the UK in Q3/16  climbed to a record high 2.3m making it 7.1% of total UK employment, according to the latest ONS numbers.

Philippines – The economy expanded 7.1%yoy, the fastest pace in three years, in Q3/16 making it one of the fastest growing economies in the region.
• GDP growth has been led by strong gains in consumer spending (+7.3%yoy), government spending (+3.1%) and investments (+20%yoy).
• The economy is forecast to grow at >6% through 2018 led by increased infrastructure spending among other things.

US$1.0723/eur vs 1.0710/eur yesterday.   Yen 109.51/$ vs 109.53/$.   SAr 14.265/$ vs 14.248/$.   $1.247/gbp vs $1.245/gbp.     
0.747/aud vs 0.752/aud.   CNY 6.872/$ vs 6.871/$.   Yuan falls to lowest level for eight years

Commodity News
Precious metals:
Gold US$1,228/oz vs US$1,228/oz yesterday –
     Gold ETFs 62.7moz vs 62.8moz yesterday –
Platinum US$944/oz vs US$933/oz yesterday
Palladium US$719/oz vs US$700/oz yesterday –
Silver US$17.04/oz vs US$17.03/oz yesterday

Base metals:   
Copper US$ 5,469/t vs US$5,476/t yesterday – Jiangxi Coppper, the largest producer in China, agreed a drop in TC/RCs for concentrates delivered next year on the back of strong growth in smelting capacity and slowing mine supply growth.
• TC/RCs settled at $92.5/t and 9.25c/lb compared to $97.4/t and 9.7c/lb agreed with Antofagasta for this year.
• Mine supply is forecast to be little changed after a 4% increase in 2016, according to the ICSG estimates.
• Earlier, spot TC/RCs were reported to have hit $100/t and 10c/lb in Oct, down from $105/t and 10.5c/lb in the three months to Sep, the highest level since Feb/15, according to Bloomberg.
Aluminium US$ 1,695/t vs US$1,718/t yesterday
Nickel US$ 11,315/t vs US$11,320/t yesterday –
Zinc US$ 2,535/t vs US$2,560/t yesterday
Lead US$ 2,158/t vs US$2,190/t yesterday
Tin US$ 20,260/t vs US$20,050/t yesterday –

Oil US$46.8/bbl vs US$46.8/bbl yesterday –
Natural Gas US$2.754/mmbtu vs US$2.705/mmbtu yesterday
Uranium US$18.65/lb vs US$18.65/lb yesterday –

Iron ore 62% Fe spot (cfr Tianjin) US$67.0/t vs US$67.1/t – iron ore prices pulling back – should not feel like much of a surprise to anyone
Chinese steel rebar 25mm US$446.3/t vs US$454.5/t – HRC steel prices falling as steel futures prices collapse
Thermal coal (1st year forward cif ARA) US$64.5/t vs US$69.7/t yesterday
Premium hard coking coal Aus fob US$308.8/t vs US$308.8/t – unchanged

Tungsten - APT European prices $198-203/mtu vs $198-205/mtu unch last week – tungsten prices edge off as price recovery struggles to get going

Company News
Metminco* (LON:MNC) 0.16 pence, Mkt Cap £6.7m – Raising A$4.85m to advance the Miraflores project
• Metminco reports that has secured commitments to raise A$4.85m to progress the Miraflores gold project in Colombia towards production. The funds are to be raised in two tranches and “will be sufficient to complete the Miraflores Feasibility Study, and some but not all of the permitting including baseline environmental monitoring”.
• The first tranche will raise approximately A$0.5m through placing approx. 212.6m shares with sophisticated and professional investors. The second tranche, which is subject to shareholder approval at a meeting to be held on 20th December, consists of placements of approximately 548.5m shares by Redfield (A$1.3m), 1,625.8m shares to Lanstead (A$3m) and 31.6m shares to the company’s Managing Director, William Howe.
• If the tranche 2 transaction is approved, Lanstead will hold a 19.9% interest in Metminco and Redfield will hold 8.6%.
• The new funding places Metminco in a position to complete the Feasibility Study work on the Miraflores Project, located in the Cauca gold belt of Colombia, which was acquired as part of a portfolio of gold projects (the Quinchia Gold Portfolio) which also includes the promising gold porphyry targets at Dosquebrados, Tesorito and Chuscal.
• In addition, the recent transaction to finance the company’s Los Calatos project in Peru, where CD Capital is earning up to 70% of the project through spending US$45m on feasibility study work and development in a series of stages, leaves Metminco with a meaningful 30% interest in the project while freeing management to concentrate on moving Miraflores ahead.
Conclusion: Metminco has secured sufficient funding to proceed with the completion of its feasibility study work at Miraflores and we look forward to further updates on progress as the technical work proceeds.
*SP Angel act as broker to Metminco.  SP Angel analysts have previously visited Los Calatos in Peru and Miraflores project in Colombia.

Rio Tinto (LON:RIO) – 2996 pence, Mkt Cap  £55,8billion – Contracts terminated for key staff following investigation of payments at Simandou
• Rio Tinto reports that, following its announcement on 9th November of the suspension of key staff in relation to an investigation of payments at Simandou in Guinea, it has now “terminated the contracts of Energy & Minerals chief executive Alan Davies and Legal & Regulatory Affairs Group Executive Debra Valentine.”
• The Company’s announcement states that, after consideration by the Board, although it does not pre-judge the outcome of any further external investigattions, “the board concluded that the executives failed to maintain the standards expected of them under our global code of conduct … In the circumstances, the board terminated the contracts of both executives”.
• The terminations mean that both individuals forgo awards under the relevant incentive rewards schemes.
• The company has announced that the role of chief executive of Energy and Minerals at Rio Tinto is to be taken by the current managing director of Marine and vice-president of Iron Ore Sales and Marketing and former JP Morgan investment banker, Bold Baatar.

Shanta Gold (LON:SHG) 11.4p, Mkt Cap £66.3m – Receipt of US$5.25m advance on silver streaming
• Shanta Gold reports that it has now received US$5.25m from its silver streaming agreement with Silverback Limited for its by-product silver production from the New Luika mine in Tanzania.
• Under the agreement, the mine has an obligation to deliver a minimum of 608,970 oz of silver over a period of 6.75 years. The company has  reminded investors that silver production in 2015 amounted to 121,682 oz and contributed approximately 2 percent of revenue.
• “As previously stated the Company will also receive an ongoing payment of 10 percent of the value of silver sold at the prevailing silver price at the time of deliveries.”
Conclusion: The silver streaming agreement helps manage the company’s debt repayment and capital expenditure management as it moves underground at New Luika, brinds some of the satellite deposits to account and advances its feasibility work at Singida.

SolGold* (LON:SOLG) 26.3p, Mkt Cap £375m – Annual report
• SolGold have issues their annual report which is available through the following link.
• The Chairman’s statement describes the financing recently entered into with Newcrest, the Australian miner and Maxit Capital which is based in Canada.
• The report goes on to repeat the 12-month drill program for 36,000m with up to six drill rigs and the aim to drill 95,000m in total over two years to end October 2018 using up to 10 rigs.
• SolGold raised US$54.5m post the year end and now reports US$44m in the treasury post fees and the repayment of other bills and debt.
• New shareholders include Guyana Goldfields and Newcrest Mining.  Scott Caldwell, President and CEO of Guyana Goldfields is now a non-executive director of SolGold.
• The statement goes on to comment on the evaluation of further exploration plans for the Mt Perry, Rannes and Normanby projects in Queensland, Australia and the receipt of proposals to participate in new projects in the Solomon Islands.
• The review of operations refers to the work being done at Cascabel in Ecuador where SRK Consultants have been commissioned to qualify the complex geological modelling and a technical report on the exploration at the Alpala prospect with the Cascabel license area.
• Solomon Islands: the review states ‘The exciting Kuma project in Guadacanal has emerged as a significnant porphyry copper-gold target upgraded by recent geochemical and spectral work by Guadalcanal Exploration Pty.
• Ecuador: the review goes on to describe the geological setting of the Cascabel project within the Eocene and Micoene Belts which stretch along the Andean mountain range though Colombia, Ecuador, Peru and Chile.
• SolGold are now progressing with a listing on the TSX market.
Conclusion:  SolGold continue to drill the Alpala prospect at Cascabel with further kilometre long intersections of mineralisation expected.  There is much to be discovered in drilling around the Cascabel license area and we look forward to the potential discovery of high-grade copper/gold mineralisation in porphyry style mineralisation within new areas of the license area.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has previously visited the Cascabel project. 

Vast Resources (LON:VAST) 0.17 pence, mkt Cap £6.6m – AGM Resolutions 7 and 8 voted down by shareholder dissent
• Vast Resources suffered another blow from activist shareholders with two key resolutions voted down at the AGM.
• Resolutions 7 and 8, which were special resolutions proposing to enable the directors of the company to allot securities on a non pre-emptive basis were not passed.
• This is the second time where shareholders have voted against the issue of new shares by management.
• This time shareholders are unhappy with a facility signed with Bracknor fund for a one-year convertible loan note.  Bracknor had already started to convert loan notes into stock in accordance with the terms of note.
• The first time shareholders voted against the issue of new share to a facility signed with Crede CG III Ltd facility following a fall in the company’s share price.  The voting down of the resolutions effectively enabled Vast Resources to walk away from its commitments to supply new stock into the £5m Crede facility into by the company.
• A Darwin Bridge Loan Note facility was subsequently put in place to bridge the gap
Conclusion:  Vast Resources is looking to develop polymetallic mines in Romania and in Zimbabwe.  The Pickstone-Peerless gold mine in Zimbabwe is reported to be profitable and offers good potential for greater production in our view.  The Manaila mine is also reported to be moving towards efficient, profitable steady state production.
We struggle to understand why Vast Resources has felt the need to sign not one but three ‘creative’ financing facilities over the past 12-months, two of which have been effectively cancelled by shareholders, and why it has not simply raised funds through more conventional equity placing methods.

Xtract Resources (LON:XTR) 0.03 pence, Mkt Cap £4.6m –Manica review opts for open pit mining
• Xtract Resources has reviewed the development strategy for the Manica gold project in Mozambique and concluded that development solely as an open-pit mine is preferable to the alternative of a high-grade open-pit mine followed by an underground mine development.
• The conclusion reflects the resource sterilisation which would be incurred by the need to leave ore pillars underground and the additional cost of backfilling the mined-out areas which “would have a serious effect on underground operating cost.”
• As currently envisaged, Manica would have a 7 year life as an open pit mine producing 480,000 tpa of ore at a grade of 2.26 g/t of gold and incurring an average waste:ore stripping ratio of 7.2:1.
• The “break-even all-in cost including capital recovery is USD908 per oz.”
• The Executive Chairman, Colin Bird, also highlights “The exploration potential, if successful, could lead to extended mine life with the processing plant paid for.”
• Discussions with the original owners of the Manica project, Auroch Minerals, are continuing  in a “constructive” manner “concerning the USD1.65 million outstanding payment and a mutually agreeable outcome is expected to be documented and announced before the end of the year.”
Conclusion: The development of Manica as an open-pit mine seems to offer the most effective utilisation of a resource which sounds as if it would be difficult to mine underground requiring widespread support pillars and backfill.

]]> Oil price, Premier Oil, And finally... Thu, 17 Nov 2016 09:45:00 +0000 Oil price

Oil prices drifted yesterday, to begin with there wasnt much news so the API news from after the close eased things off a bit. Later the EIA numbers proved to be worse, at a build of 5.3m barrels of crude and modest rises in products were bigger than expected, despite a rise in refinery utilisation from 87.1% to 89.2%, the EIA put this down to a rise in imports, last week 910/- barrels.

Fortunately Russia came to the rescue saying that they would support ‘any Opec’ decision at the upcoming meeting. Secretary General Barkindo is still travelling, at the moment he is meeting the Venezuelan oil Minister in Caracas.

Premier Oil

A trading update from Prems this morning which is pretty much the same as other recent trading news, ie operationally things are going very well with the usual exception of Solan of course. Production continues to beat estimates, at the moment it is 80/- b/d with an annual average of 69/- b/d and recently upgraded guidance of 68-73/- b/d still very much achievable. Catcher is still on target for production in 2017 and down 24% on costs, whilst at Sea Lion FEED work is ongoing and break even costs are $45pb and falling. As to the debt which stands at $2.8bn the good news is that the term sheet for the refinancing is in the ‘final stages’ of renegotiation and it looks as if it is pretty well what the company needs. It is for the full amount, gives headroom for Catcher, gives security and appropriate economics to the lenders and as one might expect has governance controls in the process. This has all taken longer than expected and of course given rise to speculation in the market that some of the lending group were keen to jump ship, thus ever was I suspect but it looks as if it has got far enough to be a runner…At the moment I am still giving the Premier team the benefit of the doubt for doing a great job.

And finally…

The second test is under way and after taking two quick wickets it has all gone India’s way, as I write they are 232-2….most exciting news so far is that ‘tea was taken early after a dog invaded the pitch’….

Muzza had a long hard battle against Nishikori but should be through to the semi’s at the 02…

And for goodness sake, Wayne Rooney having a swift one with a wedding party, where’s the story, game had been won and he wasnt in the friendly, I mean if I ran into a blog reader at their wedding party….

]]> Today's Oil and Gas Update:Premier Oil, Great Eastern Energy Thu, 17 Nov 2016 09:27:00 +0000 Headlines

Comment: If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?
Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas

Following Great Eastern Energy’s (the “Company”) interim statement today, which we comment on below, the Company discloses the fact that it was able to achieve ~$10.0/mcf in the period, which is jarring when set against the backdrop of significantly lower state gas prices, which is $2.5/mcf (dry basis). This underlines what a disaster Indian gas price policy is and why ultimately, the country will be unable to drive its domestic gas production forward in a meaningful manner. It is clear that the market will support prices ~4x that which is set via a manipulated formula.

While these are a number of significant projects on the horizon in India, we see the government's intervention in artificially suppressing the market price hampering any rapid progress and actually forcing significant delays on the sector.

If ever there has been a government which has done more damage over such a prolonged period of time to undermine its once flourishing hydrocarbon industry than the Government of India, it would be difficult to imagine. India needs to start to deregulate and liberalise its gas market, and put it beyond political interference, so that confidence in the country can recover, and its own domestic market start to flourish and thrive, and start to increase production.

In Brief
Premier Oil (LON:PMO – 56p) – Is There a Devil in the Detail?: Today's announcement makes for good reading, especially with regards to cost control and production outlook. Assessment of covenant breaches continues to be delayed until such times as the Company is confident it can meet them, and we don't blame them. With ~$2.8bn on net debt it is difficult to imagine the stress the management must be enduring, especially in the wake of its share buyback. While we are provided comfort by the majority of the statement, the one uncomfortable line, which appears right at the end of the statement, reads "....going forward, Premier plans to be cash flow positive at oil prices above $50/bbl...." If this is true to its word, then the Company, at current prices, looks as if it will face further difficulties. Given that group opex hovers around the ~$20/bbl mark, this is either a statement out of context , or a statement that of management's belief that post the debt restructuring, once all debt payments capex and other items are taken in to account, that this will be the new "free cash flow" breakeven price. If so, we need greater clarity and understanding what has precipitated this statement, otherwise alarm bells will start to ring, if there isn’t a little tinkle already. We will await the full results before opining either way.

Great Eastern Energy (LON:GEEC – 27p) – Creditable Performance, But India a Mess for Gas: Today's results underline a business that is continuing to make progress, and with management of liquid resources and debt payments accounting for the marginal bottom line cash flow, operationally at least the business continues to flourish. That said, we would caution against the Company's debt pile, which although manageable currently, should there be significant amendment to the licence terms imposed, specifically undermining the ability of the Company to set pricing according to the market, then servicing its debt might be difficult.

]]> Zak Mir: One-way traffic for Frontera Resources shares (and it’s not upwards) Wed, 16 Nov 2016 12:30:00 +0000 The self-proclaimed ‘King of Charts’ Zak Mir reckons it will take something special for oil and gas explorer Frontera Resources Corporation (LON:FRR) to reverse its share price fortunes.

In the latest segment for TIP TV’s Proactive Investor Bulletin Board, Mir explains: “It’s one way traffic as the market fell in love and then fell out of love.

“You’d want to see a break back of 0.15p, which is quite a long way away from current levels.”

As for whether or not there is any reason to get involved with the oil and gas explorer, Mir thinks – based on the charts – investors should leave this alone for the time being at least.

“Not unless you had some particular fundamental insight [should you invest]. On the technical front you still want to see that 0.15p broken.”

]]> Centamin shares to rally if gold stays above US$1,200 Tue, 15 Nov 2016 11:20:00 +0000 Technical analyst Zak Mir thinks shares in gold miner Centamin PLC (LON:CEY) could rally as long as the gold price maintains its position above the US$1,200 level.

The stock gathered a lot of momentum in the run-up to the election, although Donald Trump’s election appears to have left a lot of investors out of pocket.

“I was noting before the election that people were piling into Centamin, pushing it through 160p and then all of sudden – when [Trump] won, it went all the way back down again,” Mir tells Proactive.

“So people were really wrong-footed, they were looking for Centamin to go higher.”

Mir explains that this weakness might represent a good buying opportunity for investors as long as the gold price plays ball as well.

“The uptrend has still remained intact and I think as long as gold remains above the US$1,200 level we should be ok.”

]]> Range Resources' share price tipped to double Mon, 14 Nov 2016 09:45:00 +0000 Increasingly positive news flow and fundamentals could drive the share price of Range Resources Limited (LON:RRL) much higher according to the ‘King of Charts’ Zak Mir.

In the latest segment of TIP TV’s Proactive Investors Bulletin Board, Mir tips shares in Range to almost double in the coming months.

“It looks like things are finally getting underway in a decent fashion [and] that’s reflected on the charts,” Mir says.

“[There are] multiple support points at 0.3p. I’m looking for 0.4p to be broken – that’s the 200-day moving average – to take us back up towards the recent range of 0.6 to 0.65p.”

]]> Angus Energy a small company with big plans Mon, 14 Nov 2016 09:30:00 +0000 Angus Energy (LON:ANGS) made its AIM debut Monday having raised £3.5mln and is a junior with some big plans.

Proactive's Andrew Scott recently caught up with managing director Paul Vonk from the firm, which has interests in two recently producing oilfields in southern England.

Providing the upside to the base case is an asset called the Brockham Oilfield in Surrey.

It shares many geological similarities with the nearby Horse Hill discovery, over the border in Sussex and better known as the Gatwick Gusher.

In fact Angus was one of the driving forces behind Horse Hill before it divested its stake to concentrate on Brockham, one of two assets it is bringing to market.

The initial plans are fairly modest. It will perform a side-track at Brockham and drill a new horizontal well on the other licence, Lidsey, in West Sussex.

]]> Finncap's Dougie Youngson likes what he sees with Hurricane Energy Fri, 11 Nov 2016 12:32:00 +0000 Hurricane Energy PLC (LON:HUR) is one of the most exciting development stories in the North Sea today, according to City broker finnCap. Analyst Dougie Youngson tells Proactive: ''The key excitement is that it's a junior oil stock listed on AIM which has successfully raised a lot of money over the last 12 months and is drilling very exciting prospects in the North Sea - a region which people seem to have written-off incorrectly.''
Asked how he sees the stock performing in the months ahead, he said: ''It's largely dependent on the next two-well programme - if they can prove there's more resources then the Greater Lancaster area becomes a very critical infrastructure hub in the future. But even if the two wells don't come up with the goods, Lancaster is still a key project in its own right.''

]]> Mosman 'excited about production potential' at Pine Mills Wed, 09 Nov 2016 13:21:00 +0000 Shares in Mosman Oil And Gas Ltd (LON:MSMN) more than doubled on Wednesday morning after it confirmed it had bought an 80% interest in a producing Texas oil field.
Technical director Andy Carroll tells Proactive: ''The technology that's being applied is simple drill and produce technology and hasn't changed since the 1950s when production started.''
Carroll added that they're excited about the potential to increase production at Pine Mills and also the further exploration potential they reckon can be accessed by acquiring seismic data.
''We had a strategic review as to the best place to be in the current oil environment and the U.S. is outstanding because you're close to market with very small transportation costs''.

]]> Victoria Oil & Gas shares can rise to 50-60p says Zak Mir Wed, 09 Nov 2016 11:10:00 +0000 Technical analyst Zak Mir reckons Victoria Oil & Gas plc (LON:VOG) shares can potentially rally from its current level of around 34p up to 50-60p in the coming months.
Mir, in a Tip TV segment for Proactive Investors, highlighted that the chart for the stock shows an extended base of support and he notes that the 200-day moving average presently sits slightly higher at 36p.
He said: “if we can close above that, it should then take the shares back towards the main resistance on the daily chart between 50 and 60 pence for early in 2017.”
]]> San Leon Energy shares are in recovery mode and Zak Mir reckons they can reach 70p Tue, 08 Nov 2016 09:58:00 +0000 San Leon Energy Plc’s (LON:SLE) share price has been in recovery mode, according to technical analyst Zak Mir, who reckons the now Nigeria focussed oil can potentially rise as high as 70p.

Mir, in a Tip TV segment for Proactive Investors, said: “San Leon’s chart reflects the recovery mode that the company has been in over the last six months or so.”

“For those who are cautious, maybe wait for a break above the 50-day moving average at 45p before getting involved on the long side, but it does look as though the recovery is here for San Leon Energy.

San Leon shares currently trade at 41p each.

]]> Quadrise fuels International could double price in the coming months says Zak Mir Tue, 08 Nov 2016 09:48:00 +0000 Quadrise Fuels International Plc (LON:QFI) shares could be set to more than double in the coming months, so says technical analyst Zak Mir.

Mir, in a Tip TV segment for Proactive Investors, said: “Looks as though we’re starting to see the shares ratchet up a gear as far as recovery is concerned, with the 10p level being the main support area over the last year /year-and-a-half.”

He added: “Ideally what we would want to see before the end of this year is a break of the 12p zone … If we can break back above that, then maybe for early 2017 we could head up towards the 22p area which was resistance at the end of last year.”

The analyst cautioned, however, that he wouldn’t want to see the share drop beyond the current support, the 9-10p level.

]]> Sound Energy tipped to rally again to re-test 100p Mon, 07 Nov 2016 10:22:00 +0000 Bullish investors could see Sound Energy PLC shares rally again to re-test 100p, says technical analyst Zak Mir.

“As far as the price action is concerned, you can see that we’ve had the big rally, effectively from the beginning of July through to the middle of September. Since then we’ve been in consolidation mode,” Mir said in a Tip TV segment for Proactive Investors.

The chartist added: “if you are cautious on the shares, if you wait for a break of the September resistance line at 82p before going long again.”

Mir also noted that those that are bullish on the stock ought to keep an eye on a zone of support at around 70p, as below that level he would question whether the best of the rally was over.

Sound Energy shares are up some 350% in 2016 to date.

]]> Sound Energy’s latest Tendrara well results is “extremely promising” - analyst Sat, 05 Nov 2016 11:53:00 +0000 Sound Energy PLC’s (LON:SOU) latest results from the Tendrara gas discovery in Morocco are described as “extremely promising” by Cantor Fitzgerald analyst Sam Wahab.

The gas flows measured at Tendrara 7 are “well ahead of expectations”, the analyst highlighted in a Proactive Investors interview.

“Prior to the first [Sound Energy] well, Tendrara 6 which was drilled some months back, the company had said anything over 3.5mln cubic feet per day would be commercial for them,”

“It is also important to note that this [result at Tendrara 7] is unstimulated, so we’re still at very early stages of testing but it all bodes well from here.”

]]> Coalswitch will be important third leg to business says Active Energy chairman Thu, 03 Nov 2016 16:00:00 +0000 Active Energy’s Coalswitch business has reached an important threshold as it aims to tap into the power industry's move to find cleaner alternatives to coal says Michael Rowan, chairman.

AEG CoalSwitch has developed an environmentally-friendly process that cleanses raw timber biomass by removing salts, minerals and other contaminants that harm the atmosphere and damage power plant furnaces.

It can then be used by thermal power stations as a cheaper alternative to clean coal conversion.

Coalswitch has just been consolidated into the Active Energy PLC (LON:AEG) with its main shareholder giving its backing by switching a chunk of debt into equity.

The rationale is that it complements the existing Ukraine forestry and Timberlands development businesses very nicely and will allow all three to grow in step.

]]> Roxi Petroleum shares tipped to rise as high as 16p in coming months Thu, 03 Nov 2016 11:06:00 +0000 Roxi Petroleum Plc (LON:RXP) shares could rise to around 15 to 16p in the coming months, according to technical analyst Zak Mir.
In a Tip TV segment for Proactive Investors Mir highlights the ongoing recovery in the group’s share price over since the early part of the year.

He notes a number of key technical features in the chart which point to support for the share between 9p and 10p, and suggests the trend is now pointing upwards.
]]> Northern Petroleum boss Keith Bush “very pleased” with new reserves upgrade Wed, 02 Nov 2016 12:20:00 +0000 Keith Bush, chief executive of Northern Petroleum Plc (LON:NOP), says he is very pleased with the outcome of the group’s new oil reserves assessment for its assets in Canada.

“We’ve done an amount of work this year that has enabled us to increase the production from the wells on the asset and it has really shown dividends with the increased reserves report,” Bush says in an interview with Proactive Investors.

“This gives us a good footprint to go forward.”

Bush also gives us an insight into the work Northern Petroleum is undertaking to overcome the continued tough conditions for oil and gas juniors.

“This is just the start of the potential for these assets,” he adds.

]]> Sirius Petroleum is showing a gradual turn around, chartist eye rally to 1p per share Wed, 02 Nov 2016 11:22:00 +0000 Sirius Petroleum Plc (LON:SRSP) has seen a gradual improvement in both fundamentals and technicals, so says chartist Zak Mir.

Looking at the chart Mir highlights key technical signals through the summer weeks that point to a new rising trend for the AIM quoted oil share.

“We’re gradually turning around and hopefully, at this rate over the next 6 months or so, we could get up to a penny,” Mir said in a Tips TV segment for Proactive Investors.

“It is common sense to say that people are gradually going into it, it is gradually improving and the slower the turnaround normally the more reliable it is.”

]]> Shell’s quarter clearly beat BP’s but both need a better oil price Tue, 01 Nov 2016 15:07:00 +0000 Royal Dutch Shell Plc (LON:RDSB) emerged as the obvious winner on ‘super Tuesday’ as the oil supermajor and its rival BP Plc (LON:BP) both released their figures for the most recent quarter, but according to Jasper Lawler, analyst at CMC Markets, both companies need better oil prices.

In an interview, Lawler said: “US$50 per barrel is clearly a lot better than US$27 but it is still not enough to take these companies anywhere close to where they were before the downturn.”

Nonetheless, the analyst notes that Shell is now seeing something of an inflection point.

“They’ve managed to see some profit growth after a couple of years of really tough times,” he said.

But turning attentions to BP, Lawler said: “BP is still suffering from their legacy of the Deepwater Horizon, it has had its final settlement there but it is still knocking onto costs each quarter,”

He added: “obviously the low oil price is hurting the upstream business as it is at Shell, but the refining margins are hurting the downstream business as well.

]]> Ascent Resources plc readying itself for production in Slovenia Tue, 01 Nov 2016 14:55:00 +0000 Ascent Resources plc (LON:AST) has just raised around £4.5 million to bring its gas field in Slovenia into production early next year. Ascent’s an independent oil and gas exploration company focused predominantly on European onshore projects.

Chief executive Colin Hutchinson tells Proactive: ''Ascent's primary asset is this gas field in Slovenia. Ascent's been involved there since 2007, drilled two wells in 2011, proved it was a significant asset and we've been working since then to bring that asset into production''.

''We had a major breakthrough in August of last year when we signed a gas sales agreement with INA to sell the gas to them at the border and then last week we announced that we've raised the money to fund the capex that we need to get it into production'', Hutchinson added.

]]> Green Dragon Gas Ltd 'confident of string of successes' Fri, 28 Oct 2016 10:46:00 +0100 2016 was an auspicious year for China-focused coal bed methane producer Green Dragon Gas Ltd (LON:GDG).

Founder, chairman and chief executive officer Randeep Grewal talks Proactive Investors through the highlights of a year in which the company has started to reap the rewards of its hard work.

With the company’s maiden profit under its belt in 2015, Grewal said: “What we’re truly focused on is completing what we have started, so this is our year to … start monetising the returns that we’ve been working so hard to do over the last 20 years.”

Green Dragon had eight exploration blocks and two in production, and one of the targets at the start of the year was to move a third block from exploration into development, and this was achieved last month with the Guizhou block.

Asked whether the company is being affected by the rocky ride for commodities this year, Grewal replied: “The beautiful thing about working in China is, we’re not.”

The decline in the value of the Chinese currency in dollar terms has had a bit of an effect, “but when it comes to commodity prices, certainly we’ve seen a bit of a down-take in terms of energy prices in China, but the government’s been … very creative and constructive. They’ve doubled our subsidy and essentially offset that change in pricing.”

“Again, the benefit of working in China is that it provides us with stability, and we really enjoy that,” Grewal said.

Green Dragon has applied for approval of the Chinese Reserve Report for Guizhou from the Ministry of Land Resources, which is a precursor to approval of the overall development plan (ODP) and expected to come through in 2017.

“Our doors are wide open to invite a partner in, because we do see that as a farm-out block,” Grewal disclosed.

A “solid partner” who is interested in domestic gas production in China is the company’s preferred funding option for development of the block.

Grewal also talked about GSS 008, which has been in production since 2008, describing it as “the gift that keeps on giving”.

“I think it is a great example of the potential of the LiFaBric technology,” Grewal asserted. LiFaBric is the technology the company developed for tapping into unconventional gas sources in China.

“We’ve truly mastered producing gas, without a drop of chemical, without frakking, in highly faulted coals. GSS is the first of many LiFaBric wells.

“It is the beginning of a string of successes,” the Green Dragon founder promised.

]]> Powerhouse Energy chairman sees significant demand for breakthrough green technology Fri, 28 Oct 2016 08:57:00 +0100 Proactive Investors’ Andrew Scott interviews Keith Allaun, chairman of Powerhouse Energy PLC (LON:PHE), which has developed a technology that turns waste material into synthesis gas.

He talks about the challenges of the last two years, telling Scott they “have been a significant development experience during which we’ve created a novel technology”.

The Powerhouse advance can turn carbon-based waste material into a fuel similar to natural gas.

So, Allaun sees a huge potential market for the company’s G3-UHt system.

“A lot of thought and effort and design has gone into converting the complex into a simple solution,” he says.

“The solution we have created is the most economical use of advanced material science, thermal science and thermal treatment that exists today.”