Bowleven (LON:BLVN) jumped 70% to 130p in trading today, after Dragon Oil (LON:DGO) announced it was considering a bid for the company. The market it still expecting the results of a volumetric study, that was announced back in November of last year, and any bullish results could potentially have a material impact on the price Dragon would have to pay. It will be interesting to see the view of the weekend press as to the price of any possible bid here, as the shares have fallen a long way from the 414p high of last year. Some of the potential prices being mentioned so far are 200p/220p but these are just purely market chatter at this stage. One important note to remember here is that a number of large institutions backed the company during a recent fund raise at 103p, and I am sure they would want a substantial premium before giving up shares they have stayed loyal to and seen trading as low as 59p.
Xcite Energy (LON:XEL) continued its rollercoaster ride again today, jumping to a high of 187p, before falling back to 142.5p just after lunch. All sorts of speculation is flying around the bulletin boards as to the reasons for the dramatic price swings, and I will leave you to read them in your own time, but one thing every holder is desperate for is to hear an update on DECC approval. As I highlighted yesterday, 200p will continue to act as a major resistance level, with 150p looking to act as support, as it did today during the aggressive sell off around lunchtime.
Petroneft Resources (LON:PTR) slipped 35% to 9.5p during early trading today, after the company said that group oil production fell 23% in recent weeks and the company has suspended a planned attempt to increase flow rates until it completes studies. The company has suspended a five well fracture stimulation program for Lineynoye field. This is a technique used to increase flow rates in wells by creating fractures in deep underground rock formations that allows oil or gas to flow out more easily. The firm said that total production increased to around 3,000 barrels of oil a day at the end of the year, however, in recent weeks production declined to 2,300 barrels a day due to a number of issues with wells on Pad 2 on the Lineynoye field. You have to go back to March 2009 to find some support around the 9.5p area, and 8.25p would be the support line thereafter.
Serica Energy (LON:SQZ) continued its breakout again today, jumping another 7% to 28.25p in trading. Holders here are looking forward to what looks like a busy 2012 for the company, and have been backing the story even more aggressive since the break out. Small resistance at 30p looks to be the first area to watch for here, any break and close above could give the green light for a retest of resistance at 40p.
Written by Steven Asfour, Sales Trader at Fox-Davies
This article is for information and discussion purposes only and does not form a recommendation
to invest or otherwise. The value of an investment may fall. The investments referred to in this
article may not be suitable for all investors, and if in doubt, an investor should seek advice from
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