Last checked at LONDON (Alliance News) - After the mega merger of Royal Dutch Shell and BG Group on Wednesday, a group of significantly smaller UK oil companies took their turn in the spotlight Thursday.
The companies involved in the Horse Hill prospect in Surrey, southern England said they have made an oil discovery at the Horse Hill 1 well in the Weald basin that could be more than double the entire production from the North Sea over the past 40 years.
However there remains a big question mark over how much of the oil can be recovered.
Although the exact amount of oil in place is yet to be confirmed by the companies involved as they continue to analyse the discovery, Sky News and the BBC have reported the oil in place could be around 100.0 billion barrels of oil, which is more than double the 45 billion barrels of oil that has been produced in the North Sea in the last 40 years.
However, the amount of oil that will be recovered from the site near Gatwick Airport is expected to be significantly less. The report said the oil in place stands at 158.0 million barrels per square mile over a 653 feet aggregate net pay section, and in an interview with the BBC, UK Oil and Gas Investments PLC Chief Executive Stephen Sanderson said initial estimates show that between 3% and 15% of the total oil in place could be recovered, meaning the discovery could lead to between 3.0 billion to 15.0 billion barrels of oil.
Horse Hill Developments Ltd owns a 65% stake in the prospect and the remaining 35% of the prospect is held by Magellan Petroleum Corp.
UK Oil & Gas Investments holds a 30% stake in Horse Hill Developments, whilst Doriemus PLC, Stellar Resources PLC, Solo Oil PLC and Alba Mineral Resources PLC each hold 10% stakes in Horse Hill Developments, with Evocutis PLC holding a 2% stake and the balance is owned by Angus Energy, in which UK Oil & Gas has a 6% stake.
The news saw shares of all companies involved jump. UK Oil & Gas Investments shares more than tripled to 3.47 pence per share, Doriemus shares leapt 76% to 0.146p, Stellar Resource rose 72% to 0.732p, Alba shares more than doubled to 0.975p and Solo Oil climbed 24% to 0.721p. Evocutis shares were up 31% to 0.268p. All were among the best performers in the AIM All-Share.
All-in-all a good day for UK Oil & Gas Investments Chairman David Lenigas, who also is chairman of Evocutis, as well as Rare Earth Minerals PLC, AfriAg PLC, and Inspirit Energy Holdings PLC, and is a non-executive director of Octagonal PLC. Also Thursday, Rare Earth Minerals increased its holding in Bacanora Minerals Ltd, for which Lenigas also is a director, to 15.40% from 15.02%.
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Markets: UK equities are trading higher mid-morning, after the minutes from the recent Federal Open Market Committee meeting showed members were split on whether the US central bank should raise rates in June. However, stock gains remain limited due to concerns about the situation in Greece, with the Greek government due make a debt repayment to the International Monetary Fund. Futures indicate Wall Street for a flat to lower opening, with the DJIA seen flat and the S&P 500 and Nasdaq 100 both pointed down 0.1%.
FTSE 100: up 0.8% at 6,994.44
FTSE 250: up 0.6% at 17,666.13
AIM ALL-SHARE: up 0.7% at 730.41
GBP: down at USD1.4830
EUR: down at USD1.0759
GOLD: down at USD1,198.80 an ounce
OIL (Brent): up at USD56.85 a barrel
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Top Corporate News
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Shire said the phase two trial of its SHP625 investigational compound failed to meet primary or secondary endpoint goals in its study of pediatric patients with Alagille syndrome. Alagille syndrome a rare genetic disorder which presents with chronic cholestasis, or accumulation of bile acids in the liver, and severe pruritus, or itching. FTSE 100-listed Shire said mean serum bile acid levels and pruritus at the end of the study were lower in both SHP625 and placebo treated groups as compared to baseline. But in a separate analysis, a positive correlation between the percent changes from baseline in serum bile acid levels and pruritis was observed in the SHP625 treated group.
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PZ Cussons said its performance for the period from January 28 to April 8 has been in line with expectations and its country performance has been line with "the comments made in the interim results announcement". The maker of bath products Imperial Leather and Original Source said that trading in Nigeria, the group's largest market, has resumed as normal following a "short period of lost trading days during the presidential election process", and that the naira exchange rate is currently stable after further devaluation in the period. It said the outlook for the financial year remains in line with expectations.
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Victrex said it delivered a good performance in the first half of its financial year, with revenue rising on the back of an improved sales volume boosted by the strong performance of its consumer electronics division. The FTSE 250-listed polymer products company said group revenue in the first half of its financial year to the end of March is expected to be GBP130.3 million, up 8.7% from GBP119.9 million a year earlier. Its sales volume in the first half was 2,028 tonnes, 28% higher year-on-year. The first half was boosted by a good performance in its consumer electronics business, though this was slightly offset by lower sales in its Invibio medical business.
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Cranswick said it finished its recent financial year with a "strong final quarter" as sales grew, and said it expects its full-year results to be in line with expectations. The food producer reported a 1% rise in underlying sales for its fourth quarter for the year ended March 31 as a lower input prices were passed onto customers, and it said its full-year underlying sales were in line with the year before. Total sales were up 4% for the fourth quarter and 1% for the full year, it said.
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St Modwen Properties said all of the contracts for the New Covent Garden Market development in Nine Elms in London have gone unconditional. St Modwen is working on the project under the Vinci St Modwen joint venture with French construction company Vinci and also is working with the Covent Garden Market Authority. The ten-year project will involve the delivery of a 500,000 square-foot market across a 37-acre site in the Nine Elms development in Battersea.
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Spirax-Sarco Engineering said it has agreed a GBP7 million deal to acquire ASPECO Corp, a US-based high-purity aseptic valves and magnetic mixers manufacturer. Spirax said the new business will be integrated into its Watson-Marlow Fluid Technology Group division and will strengthen its presence in the biotechnology and pharmaceutical industries. It will pay for ASPECO in cash.
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The UK Competition and Markets Authority said the merger between Poundland Group and 99p Stores is to be referred for an in-depth investigation unless acceptable concessions are offered by the two groups. Poundland agreed a GBP55 million cash and shares deal in February to buy its small - and slightly keener pricing - rival, paying GBP47.5 million in cash and a further GBP7.5 million in shares. Poundland said at the time the deal will be conditional upon the approval of the UK competition regulator and said initial talks with the CMA indicated it might have to offer concessions to get the deal passed. That indication was confirmed Thursday, after the CMA said its initial probe found the merger "gives rise to a realistic prospect of a substantial lessening of competition" in 80 local areas in which the companies both have existing operations.
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Gulf Keystone Petroleum said its pretax loss significantly widened in 2014 as a rise in revenue was offset by a substantial impairment charge and a vast increase in costs as the company continues talking to numerous parties about potential corporate or asset sales. The oil and gas producer operating in the Kurdistan region of Iraq reported a pretax loss of USD246.1 million for the year ended December 31, 2014, compared to a USD31.8 million loss in 2013. Despite revenue rising to USD38.6 million from USD6.7 million, a USD144.1 million impairment against the Akri-Bijeel block in Iraq and administrative costs doubling to USD39.0 million from USD15.8 million caused the company's loss to widen.
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Mylan said it has offered to buy Dublin-based Perrigo Co for USD205 per share in cash and stock, or USD28.9 billion, as the generic drug maker seeks to create a diversified pharmaceutical behemoth. The offer represents a premium of more than 25% premium to Perrigo's closing price on April 3. The two companies had 2014 pro forma sales totalling about USD15.3 billion. Mylan, based in Potters Bar, England, is one of the largest generics and specialty drug companies, with about 1,400 different products. Last year, Mylan agreed to buy the non-US operations of Abbott Laboratories for USD5.3 billion as a strategy to shift its tax base to the Netherlands. In a similar effort, Perrigo in 2013 had acquired Elan Corp in order to be domiciled in Dublin.
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Swiss cement giant Holcim and its French peer Lafarge agreed to name Eric Olsen, a Lafarge executive, as chief executive officer of the combined group on closing of their proposed merger, according to media reports. The agreement removes an obstacle to shareholder approval of the deal, after a protracted fight that nearly derailed the marriage last month. Both companies hold shareholder meetings next month to approve the combination. The reports indicated that the companies are set to announce the appointment as early as Thursday.
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Other AIM Movers
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Transense Technology, up 33%. The transportation sensor systems provider said its Translogik division has won a deal to supply its iTrack mining tyre monitoring systems for the entire fleet of large haul trucks at the Spence copper mine in Chile, owned by FTSE 100-listed miner BHP Billiton. Wildhorse Energy, up 20%. The energy company said it has agreed to fully acquire Australia Salt Lake Potash, an Australian company that owns two large salt lake brine projects in the west of the country in an all-share deal. In return, Wildhorse will issue Australia Salt Lake with 15.0 million Wildhorse shares, issued at the mid-market price when the market closes on the day prior to issue, as well as a series of performance based convertible shares. Clean Air Power, up 11%. The company said it has signed a deal with TEC Equipment, a Volvo and Mack truck dealership based in the west of the US, operating in California, Oregon, Nevada and Washington, to offer full sales, installation and support services for the Genesis-EDGE Dual-Fuel system made by Clean Air. Clean Air Power also said the California Air Resources Board has approved certification for the Genesis EDGE Dual-Fuel product, meaning it is now eligible for sale and distribution in all 50 states. Alexander Mining, up 10%. The miner said its MetaLeach subsidiary has been granted patents in Botswana, Namibia and Zimbabwe for a zinc extraction method. Alexander Mining said the patents have been granted for the company's Method for Extracting Zinc from Aqueous Ammoniacal Solutions. Castleton Technology, up 10%. The software support services company said the recently-acquired Keylogic is trading ahead of expectations with more than GBP1 million in bookings delivered last month, a 40% year-on-year rise. It added the business is still performing ahead of expectations and is delivering strong organic growth. Castleton also said it has appointed Davinder Sanghera as its chief operating officer with immediate effect. He joined the company in November last year following the acquisition of Documotive.
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Top Economics And General
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The Bank of England kept its key interest rate at a record low and quantitative easing unchanged. The Monetary Policy Committee decided to retain the key bank rate at 0.50% and the size of asset purchases at GBP 375 billion at the end of the two-day rate setting meeting.
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The UK trade deficit in goods widened by more-than-expected in February to its highest level in seven months, data from the Office for National Statistics showed. The visible trade deficit increased to GBP10.340 billion from GBP9.174 billion in January. Economists had forecast a shortfall of GBP9 billion. In the same month of 2014, the trade gap was GBP9.906 billion.
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UK house prices increased more than expected in March after falling a month ago, survey data from Lloyds Banking Group's Halifax division showed. House prices rose 0.4% month-on-month in March, offsetting a 0.4% fall in February. Economists had forecast a marginal 0.1% growth. During three months to March, house prices advanced 8.1% from the prior year, which was slightly slower than an 8.3% increase registered during three months to February and an 8.2% forecast by economists.
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The British Chambers of Commerce's Quarterly Economic Survey showed manufacturing and services companies in the UK reported slightly weaker growth in the first quarter of 2015 in comparison to the closing months of 2014. The BCC said that though the first quarter results showed weaker balances in most areas in comparison to the fourth quarter of 2014, the quarter-on-quarter trends back its view that the UK economy is growing at a "steady rate".
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Labour's lead narrowed in the daily YouGov/The Sun poll published late Wednesday, as the Conservatives snatched back some ground from UKIP, while a separate survey found scepticism among UK voters about a greater influence for the Scottish National Party. The latest YouGov/The Sun poll found Labour leading the Conservatives by one point, at 35% to the Tories' 34%. The Conservatives gained a point from the YouGov survey published a day earlier, when it was polling at 33%. The point appears to have been clawed back from UKIP, which fell from 14% to 13%, as the Liberal Democrats and the Green Party remained flat.
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Trident moved to the centre of the election debate, as the Conservatives claimed Labour will use the nuclear deterrent as a way to secure Scottish National Party support, while the battle over Labour's non-domicile rule change plans continued and the SNP renewed its call for the devolution of tax powers. Defence Secretary Michael Fallon said the Conservative manifesto will include a commitment to build four new nuclear missile-armed submarines. Fallon has claimed national security in Britain would be put at risk under a Labour government, which he said would likely use Trident as a bargaining chip to secure the support of the SNP, which has made it clear it would vote to scrap the programme.
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Greece confirmed it will make a EUR450 million loan instalment to the International Monetary Fund on Thursday, Reuters reports citing a government official. "The payment has been scheduled and will go out later today," the official told Reuters.
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Ireland's consumer prices dropped for the fourth straight month in March at a faster-than-expected pace, data from the Central Statistics Office showed. The consumer price index declined 0.6% year-over-year in March, exceeding economists' expectations for a 0.3% drop. In February, prices had fallen 0.5%.
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Germany's industrial production increased at a faster-than-expected pace in February, after falling in the previous month, preliminary figures from Destatis showed. Industrial production rose a seasonally and working-day-adjusted 0.2% in February, exceeding economists' expectations for a 0.1% climb. In January, production had fallen 0.4%, which was revised down from a 0.6% increase.
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The Bank of France raised its first quarter growth estimate for the French economy back to 0.4% on Thursday, citing growth in industrial production and stronger foreign demand. In March, the bank had lowered the forecast to 0.3% from 0.4%. In the fourth quarter, the French economy grew 0.1% from the previous three months. The European Commission forecast that the French economy will expand 1% in 2015 and by 1.8% the next year. The French economy grew 0.4% in 2014, the same rate as in 2013. The government has also forecast 1% growth for this year.
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The minutes from the March meeting of the US Federal Reserve's Federal Open Market Committee showed that several members determined that the economic data and outlook were likely to warrant beginning the process of raising rates in June. However, others said conditions would not be appropriate to begin raising rates until later in the year due to the effects lower energy prices and the dollar's appreciation have on inflation. The Fed noted that a couple of participants suggested that the economic outlook likely would not call for an increase until 2016.
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Afternoon Watchlist (all times in BST)
13:30 Canada Building Permits (MoM)
13:30 US Jobless Claims
13:30 Canada New Housing Price Index
15:00 US Wholesale Inventories
15:30 US EIA Natural Gas Storage
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Friday's Key UK Corporate Events
Hays - Interim Management Statement
Vedanta - Q4 Production Results
Biofrontera AG - Full Year Results
Huntsworth - Full Year Results
XP Power Q1 - Interim Management Statement
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Friday's Key Economic Events (all times in BST)
00:50 Japan Bank Lending and Money Supply
02:30 China Consumer Price Index and Producer Price Index
06:45 Switzerland Unemployment Rate
07:45 France Budget
07:45 France Industrial Output
09:30 UK Industrial Production
13:15 Canada Housing Starts
13:30 US Fed's Lacker speech
13:30 Canada Unemployment Rate
14:30 US Import and Export Price indices
15:00 UK NIESR GDP Estimate
17:20 US Fed Minneapolis's Narayana Kocherlakota speech
19:00 US Monthly Budget Statement
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Contact: +44 207 199 0340; newsroom@alliancenews.com; @AllNewsTeam
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2 Oct 2023 08:46
LONDON MARKET OPEN: Stocks rise; United Utilities and Pennon impress
(Alliance News) - London's FTSE 100 made a solid start to the final stretch of the year, though the mood was still uneasy despite a deal being struck in the US to avert a government shutdown.
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