The week Market Weekly Digest is a reminders and pointers as to news items Share Talk covered this past week and my own personal take on a few topics. Plus we launch our new site today, we hope you like the new fresh look.
As always, we remain completely impartial and never tip or advise buy/sell decisions on stocks. We watch social media and one account – Twitter poster on Friday evening caught my attention. The comments “bet your house on it” shocking and misleading to say the least. This is real people who may spend money they can’t afford to lose, seriously folks what out for yourself.
Are today’s financial industry players paying attention to the revolution that is ongoing across the social media landscape today, being played out right in front their eyes? I was in the city this week and l can tell you a lot don’t have a clue about the changes in investors habits and how this can change markets share prices.
Been an interesting week with oil and gas on AIM dominating the chat groups, social media. It is impossible to hid anything these days with people using mobile phones and talking in Twitter, WhatsApp DM group’s.
BDF drilling rig 28 – Pease Pottage Services, Crawley (M23) last Thursday with the rig on its way to Angus Energy plc Lidsey Oil Field. We don’t publish a lot of info, images we collect because of the nature of the protesters that are attracts during these operations. One thing for sure, UKOG and ANGS shareholders should be happy with the news flow to come.
Before we cover this week’s new updates, others must have noticed the the large buys in UKOG this past week? Not sure if it is people closing short positions but the chunky buys are for all to see and this could make for an interesting week ahead. I tweeted out on my private account that the open hole test must be completed now the rig had left site.
Steve Sanderson is not giving any interviews until he has something to talk about for sure, his absence from the media lately gives that away. Unless l am mistaken (this is what investors are missing) we would expect an RNS containing closed well flow rates test from the Broadford Bridge-1 and 1z Exploration Well, Weald Basin site soon. With an aggregate total of 1,064 ft of perforations over eight naturally fractured Kimmeridge zones, including a new uppermost reservoir zone. This should be a interesting update.
UK Oil & Gas Investments PLC (AIM: UKOG)
UK Oil & Gas Investments PLC announce that it has been informed by Horse Hill Developments Limited (“HHDL”) the operator of Horse Hill Licences PEDL 137 and PEDL 246, containing the Horse Hill-1 (“HH-1”) oil discovery that the Environment Agency has granted the necessary permits to enable HHDL to carry out extended flow tests at HH-1, store any produced oil, drill and test both a side-track from the existing HH-1 well and new borehole HH-2. The Company has a 32.435% interest in the Licences.
CREDIT: PETER NICHOLLS/REUTERS
Appraisal drilling was submitted to Surrey County Council in October 2016 and is now confirmed to be decided at the Council’s planning committee meeting on October 18th, 2017. Members of the planning committee completed a scheduled visit to the Horse Hill site yesterday, 7 September, in preparation for the October meeting.
Stephen Sanderson, UKOG’s chairman, said: “We look forward to a successful planning outcome and the resumption of operations at Horse Hill.”
Empyrean Energy PLC (AIM:EME)
After penetrating a thick section of hard shales and siltstones, drilling on 7 Sep, has intersected a potential sandstone reservoir with high gas shows. These have occurred even though the drilling mud weight has been further increased to control the levels of background gas for safe drilling.
Shareholders and investors are advised that the significance of these shows will become more apparent when the next wireline logs are run to more fully evaluate the intersected gas shows and reservoirs. This is planned after reaching the proposed total drilling depth of approximately 3,200 metres.
The Dempsey 1-15 well is currently drilling ahead below 2,760 m (~9,050 feet) to the highly under-explored deeper targeted reservoirs in the approximately 440 m (~1,400 feet) of remaining section to be drilled.
Empyrean CEO Tom Kelly commented, “After slow and steady drilling through some very hard rocks over the last few days, we are very encouraged to see the best looking gas shows from another sand in what we now believe to be part of the primary target zone in this well. We have not drilled out of this latest gas bearing sand yet, so it will be interesting to see how thick this zone is. We look forward to keeping investors appraised as we progress.”
Share Talk has interviewed Empyrean Energy PLC (AIM:EME) twice leading up to this drill and we hope to update shareholders shortly on our next podcast with the company.
Ferrum Crescent ltd (ASX, AIM,JSE: FCR)
Ferrum Crescent announced a placing to raise funds. We talk to Justin to understand what the funds will be used for in the next phase at its wholly owned Toral Project. We also wanted to ask if the company will put more skin in the game?
Share Talk highlight Oil & Gas AIM-listed companies
Back in July we highlighted UKOG & ANGS hydro carbons AIM-listed companies that have caught shareholder attention. But we also picked up on Canadian Overseas Petroleum Limited (AIM:COPL,TSX-V: XOP)
The Debt package to finance operations moving forward look the next likely news update? If you look across social media you will see investors building a position while other’s are questioning if the management team can deliver? The logical view, look at the assets the company hold, then ask, can they secure a $40, $50 million dollars (yes this is not for the faint hearted) package against their offshore acreages? Time will tell but make no mistake about it if COPL secures the funding they are seeking, a re-rate will take place with the current market cap a distant memory!
Time will tell but make no mistake about it if COPL secures the funding they are seeking, a re-rate will take place to the current market cap they are off to the races! With Schlumberger Sign Agreement for Development of OML 83and OML85 (investment in the project, phased over several years, is estimated at $700 million) next door to Canadian Overseas Petroleum Limited oil appraisal and development project OPL 226.
‘NNPC, First E&P and Schlumberger Sign Agreement for Development of OML 83 and 85 in Nigeria’ London, June 29, 2017
Tripartite agreement for the development of the Anyala and Madu fields under OML 83 and OML 85, offshore Nigeria.
The Company and Shoreline, through their jointly held affiliated company, ShoreCan has acquired 80% of the share capital of Essar Exploration and Production Limited (Nigeria) which holds an attractive oil appraisal and development project in shallow to mid water offshore Nigeria on its 100% holding in OPL 226.
May 25, 2017, News of a placing was announced (I had watched the SP slide over the previous month), a Common Share Offering £3.25 million. The Company issued 650,000,000 new common shares (“Placing Shares”) at a price of 0.5 pence per Placing Share.
Management, including Arthur Millholland, President & CEO, representing approximately 3% of the existing share capital of the Company, and certain existing shareholders, participate in the Placing for an amount approximately equal to their proportionate current holdings in the Company.
COPL can press forward with its oil appraisal and development project offshore Nigeria in OPL 226 held through its 50% owned subsidiary ShoreCan’s 80% shareholding in Essar Exploration and Production Limited Nigeria.
- Debt package to finance operations from main market institutes?
- Rig hot stacked: If COPL signs a contractual agreement, this would incur costs of around $50,000, $75,000 plus per day in cash burn depending on the contractual agreement – hot stacked is hiring on the spot market while a semi is in cold storage an option for the company?
- New seismic interpretation – 3D seismic data should be completed late Q2 to early Q3 2017. Mesurado-1, 50 miles offshore Liberia on Block LB-13 (reappraisal of the original seismic).
- Nigeria – Appraisal* drilling operations are planned to commence in late 2017 as quoted back in December 2016 RNS? Will the management team deliver on its oil appraisal and development project offshore Nigeria – OPL 226?
*Appraisal drill: Think back to December 19, 2016, Mesurado-1, this was an Exploration drill, a wild cat with a high degree of not striking oil. Appraisal drill is a different beast, the company knows they have oil, the question being, how much, is it commercially viable to extract versus cost per barrel.
Why mention this today? Nothing has changed and we know COPL management are in the UK. We have been in talks with their representatives and hopefully we can get them on the record this week.
Regency Mines PLC (AIM:RGM)
I caught up with Company Chairman Andrew Bell today and asked him for his views on why he de-risked and what is RGM long term relationship with UKOG.
Regency Chairman Andrew Bell commented: We believe in the long-term future of the Weald Basin as an oil-producing province. At the moment we are at an exciting juncture, because UKOG is conducting comprehensive flow testing of 3 Kimmeridge limestone horizons at its BB-1 well, and this is some miles away from the previous HH-1 well at Horse Hill where two years ago some very short flow tests produced terrific results from Kimmeridge limestone horizons. Any day we will start to get results from HH-1 and then we have Angus at Brockham and UKOG again later in the year at Horse Hill again testing these horizons.
That means that we may get confirmation of light free-flowing oil in the Wealden Kimmeridge within days, which opens up the prospect of massive production without fracking. No wonder there is excitement surrounding the stock of UKOG, which has 32.5% of Horse Hill and 100% of the twice as extensive Broadford Bridge licenses.
We at Regency sold 1.9% of our 5% interest in HHDL (the 65% owner of the Horse Hill license through which we and UKOG hold our interests) to UKOG partly in exchange for over 17m UKOG shares. These UKOG shares quintupled to give us a massive paper profit, and the value of the shares was nearly 40% of our market cap at one point.
We sold 10m plus, leaving us with some 7m. That is still £600,000 worth, but some people are saying we must be secret bears of UKOG to have sold.
Not at all. We might think there was (say) an 80% change UKOG has not shot its bolt and will go up further, but given our exposure and the time frame in which we foresee some financial needs that would not be enough to stop us selling.
On the other hand, at this level of exposure, we might feel inclined to hold even if there were a 50% chance of short-term weakness.
Our basic belief is that probably in a few years the Weald stocks will have a combined capitalisation far higher than they have now. We may be able to make that judgment with more certainty at the end of this month. Or less. But as we see it there are two races here. The first is between the price and the state of knowledge sufficient to assure it (rather than provide speculative upside). Sometimes one is ahead, and sometimes the other. The second, which I know has concerned some of the company managements involved, is between the share price and the eventual takeout price when a bidder comes a-knocking (as will eventually happen). The companies want to hurry to add value (to our shares, and their options) as quickly as possible to avoid a cheap early takeout.
To those who say there will be a fall right back in price, I say: how do you know? If the results show flowing oil from the Kimmeridge, how do you know a large company will not swoop in before its competitors with a quick bid, and set a floor to the price? I suspect it may happen sooner than anyone thinks.
So we are very happy with our 3.1% of HHDL and our 0.2% exposure to UKOG, for now.
Elsewhere Regency sees its coal bed methane investment, Curzon, racing towards listing. And its coal assets are going to see further developments.
Nobody should suppose we are just sitting back and relaxing as these things occur. We are constantly active and 2017 is just begun as far as we concerned – some of the things we were working on early in the year have taken time to reach this stage, more time than expected, so we have had plenty of time to plan next steps.
Big thank you Andrew for giving up your time to reply and l am sure your shareholders will read your comments with interest.
eg solutions plc (LON:EGS)
A takeover offer of £26.3m has been recommended to the shareholders of Staffordshire-based software business EG Solutions. A statement released on the London Stock Exchange said that the directors of EG Solutions intend to recommend the offer from Surrey-headquartered Verint WS Holdings Ltd be approved.
EG chairman Nigel Payne said:
“I am pleased to recommend this offer to our shareholders.
“The offer price of 112.5 pence per share represents a premium of 85 per cent over the share price of the business just one year ago, a premium of 53 per cent over the last six month’s volume weighted average share price and is an attractive exit price when viewed against the fundamentals of the business.”
Angus Energy PLC (AIM:ANGS)
Angus Energy plc announce that the BDF drilling rig 28 has arrived on location at the Lidsey Oil Field and is in the process of rigging up prior to rig acceptance. Ancillary equipment and casing is already on site and equipment inspections continue. The plan is to spud (official start of the drilling process) the Lidsey-X2 horizontal production well early next week. Lidsey-X2 will be a conventional production well targeting the existing Great Oolite reservoir, in addition, the well will also pass through the Kimmeridge formation and enable Angus Energy to assess its potential in the Southern edge of the Weald basin.
The share price has reacted to the news over the past couple of weeks and readers must remember, ANGS is a company that is in production, not exploration. IMHO this is a company you should read up on and put on your watch list.
Gervaise Heddle: Chief Executive, Greatland Gold plc (GGP). Director of Thor Mining plc (THR) and MetalNRG plc (MNRG) talks to Share Talk during his visit from Australia. We will update this week with a blog and the interview.
Thought of the week…
Share Talk was in the city this week, that is London to all our overseas readers. A City broker company is working with the FCA and has said is cannot accept any new money or assets from new or existing clients and (ii) extend existing or provide new credit lines to clients. We are watching this with interest and will not name the company out of respect for their clients.
We would also like to wish Steve Larratt all the best in his new business venture, it has been a great journey together and l am sure he will pop in from time to time.
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