OilVoice - FoxDavies views from the trading floor - Lochard Energy, Argos Resources and Aminex

FoxDavies views from the trading floor - Lochard Energy, Argos Resources and Aminex

Friday, January 27, 2012

Lochard Energy were in vogue again today, jumping 14% to 9.25p by the end of lunch, on decent volume. Investors seem confident that the company is in a much better standing after the recent raise of £3.38 million at 7p. The placing, that was oversubscribed will be used to cover costs for the Athena oil development east of the Shetland Islands. Resistance sits at 9.5p, and any break of that could see the stock retest the resistance at 11p. We are also very interested in how the recent bid for Ithaca Energy could affect Lochard, that has a 10% ownership of the Athena filed via its 100% ownership of Zeus Petroluem.

Speculation surrounding Argos Resources continued to keep the stock buoyant once again today, pushing the stock another 15% higher to 22.75p before lunch. The stock has been trading around 2 to 4 million shares a day, and has moved in a straight line from 12p to 24p without pausing for breath, so it was no surprise to see a little profit taking over the last 2 sessions. However, the previous resistance at 18p acted as a decent support level and investors took the pull back as an opportunity to take another bite. If the volumes continue to increase here, possibly a retest of the resistance at 24p could be on the cards?

The market has been expecting an update from Aminex and SOLO Oil on drilling in Tanzania. The company finally gave the update today, highlighting 'the Ntorya-1 exploration well in the Ruvuma Basin onshore in Tanzania, which it operates and in which it has a 56.25% interest, was spudded on the Dec. 21 and has been drilled to 1,535 meters where an intermediate casing string has been set. The well is now drilling ahead towards the target interval of approximately 1,800 to 1,900 meters depth. Ntorya-1 is expected to reach total depth around the end of January. Aminex estimates that the Ntorya Prospect has a probability of success of around 20%, with mean recoverable resource potential of 100 million barrels of oil equivalent.' Both stocks sold off a touch before lunch, with Aminex trading 4% easier to 5p, and SOLO Oil trading 5% easier to 0.73p. Possibly short term traders were disappointed they only got an update that said casing string had been set, and not and update on how much is potentially down there. Longer term holders look to be glued to seats here, as the statement clearly says they will be at target depth around the end of January. So another update could be due early February.

Matra Petroluem continued its rich vein of form, pushing another 12% better to 0.85p just after lunch. Volumes are not what they use to be here, but most of the investors look to be in for the long haul, fully believing in the story. With the thin volumes it does deter the day traders from the stock and allow the steady climb to continue. We as a house are very bullish on the Matra story, and currently have a 3.9p price target.

The near 150% rally in Leni Gas took a small pause for breath today, as the stock dropped 4% to 1.3p. The run has been backed up by company announcing two great bits of news. The first was a partnership agreement with Range Resources in Trinidad, and the second was a drilling update from the Gulf of Mexico.

The Leed Petroleum rollercoaster decided to swing into action again today. The stock jumped 15% just before lunch to 0.6p, on volume of 250 million shares. The stock took a knock after Viridas announced it had sold its holding in the company, but bulletin boards continue to speculate that something else could be brewing. After the recent move, one would have thought that if Leed were up to anything behind the scenes, after the recent rally, they would have been forced to announce it to the market. However this one plays out, it sure is interesting to watch.

Xtract Energy has started to catch my eye once again, and has consolidated very nicely at the 2p level, creating what looks like a strong support line. The company last gave an update on the 11th of January, and one of the snippets from the RNS said 'As previously announced by Xtract, the Maersk Resolve is currently drilling on contract to Maersk Oil and Gas in Denmark. The Maersk Resolve has experienced similar weather conditions as the Byron Welliver over the last few weeks which has impacted their well activities. Noreco has advised that the revised release date by Maersk Oil and Gas of the Maersk Resolve drilling rig is 26(th) January 2012. The rig move will require a suitable weather window to undertake the short tow to the Luna location and subsequent positioning for drilling operations. The move is therefore dependent on weather conditions prevailing at the time of the rig release by Maersk. Xtract will provide a further update once it has been advised by Noreco that the well has spudded. The Luna drilling program is expected to take approximately one month in duration.' So if this time line is correct, the rig was released yesterday, and could currently be on tow to the Luna location. Holders might be in store for an update from the company confirming the arrival of the rig on site. We will be keeping the peepers fixed on this one.

Empyrean Energy jumped another 6.5% to 7p just after lunch. The stock has been on a great run since the turn of the year, and if it can close above the resistance at 6.5p, then that could, in turn become support and a test of major resistance at 7.5p could be the next point of interest.

After the recent rally from 6p to 11p, sellers finally showed up to the Petrel Resources party. Holders are looking for an update from the company, and have jumped on board recently in the anticipation of getting one. This update has not materialised and possibly a few short term punters are happy to just take a turn. The shares were a penny easier (-10%) to 9.5p.

Written by Steven Asfour, Sales Trader at Fox-Davies