Nighthawk Energy Share News (HAWK)

KBC Peel Hunt is anticipating few surprises in British Sky Broadcasting's (BSkyB) first quarter results due on Friday.The bid for the company by News Corporation is likely to be of more interest than the company's launch of dedicated high definition (HD) channels and its HBO carriage deal, the broker said. News Corp already has a 39.1% stake in BSkyB and made an indicative offer of 700p a share in July.Despite growing opposition to the bid, the broker expects the bid to go through, "with the price nudged closer to management's 800p threshold than the initial 700p indicative offer", analyst Patrick Yau said.The broker admits there is a key risk with the company with regulatory review by both UK and EU regulators. "The BBC has been outspoken against the threat of the erosion of media plurality in the UK and a loose alliance of media companies in the UK (all of whom compete with either BSkyB or News Corp)", Yau added.However, Yau believes the bid will be successful, advising investors to buy the stock ahead of the formal bid announcement.KBC has confirmed its 'buy' rating with a target price of 750p.A third quarter trading update that was merely in line with expectations was a cue for a round of profit taking in Filtrona, the international supplier of speciality plastic and fibre products.Panmure Gordon thinks that with the shares closing last night at a 52-week high of 259p the stock is no longer worth buying, though that view was expressed before the market knocked more than 5% off the share price in the morning session.Panmure Gordon switches its stance from "buy" to "hold" but maintains its 274p price target after the company achieved slightly better overall growth in the third quarter than the broker was expecting.The broker notes, however, that "there are a number of issues within the mix."These include a cautionary note on growth in the porous technologies division in the fourth quarter as a result of overstocking by its largest customers, and cigarette tax changes in Japan bringing filter orders forwards into the third quarter.The broker's full year expectations remain unchanged though it has fiddled around with the forecast margins of the group's various divisions."We believe Filtrona continues to make significant progress, though as is always the case it may pay not to get too carried away too far in advance," the broker said.The admission by oil explorer Nighthawk Energy that it will not meet its previously announced target of 1,000 barrels of oil equivalent per day this year is a clear disappointment, broker Daniel Stewart concedes, but it has not dampened the broker's enthusiasm for the stock.The company explained that the shortfall in production this year is due to the limited number of wells on test. Daniel Stewart investment analyst Richard Nolan notes that there are currently 19 wells on the Jolly Ranch prospect, of which only six are currently producing."As we have said in the past, this is not so much as an exploration play as it is an engineering play. The John Craig 7-2 well was drilled 30 miles NW [north-west] of the core area and confirms the extension of the shales. However, sand ingress is restricting production. Solving sand problems, fraccing [fracturing], completion techniques and discovering sweet spots should produce value for shareholders," suggests Nolan.The major area of doubt, however, is whether the company has sufficient funds to solve those problems.It's a view echoed by Nighthawk's broker and nominated advisor (nomad), Westhouse Securities."There is no question that as a shale oil play, Jolly Ranch presents challenges in the early development stages that conventional plays do not. However, with exceptional estimates of oil in place, the patience this requires at the start can lead to substantial rewards, as understanding of completion techniques is optimised. Recent transactions involving other shale plays in North America, albeit predominantly gas, have shown the potential value that can be created once these techniques are established," Westhouse says. "Nighthawk's decision to pursue well recompletions and testing, rather than additional new drilling, will help achieve both better understanding of the play and improve cash flow, which we believe demonstrates the management's focus on value-creating opportunities," the broker concludes.Like Daniel Stewart, Westhouse rates the shares a buy. Its target price of 88p, however, is far more optimistic than Daniel Stewart's 45p.