Petro Matad shares rose on Thursday after the company announced solid progress in its Mongolian Block XX field as the company gears up to begin production. 

Shareholders would have been pleased to learn the Mongolian-focused oil and gas exploration company is well on its way to becoming a producer, with operations at the Heron-1 well progressing as planned.

During recent preparation work, the Heron-1 well was found to be in good condition, and the company said it is ready to begin installing production facilities. 

Petro Matad is on track to become a producing company in the very near future, failing any unexpected delays. Not only do investors have this important milestone to look forward to, but also the results of two exploration wells being drilled at Heron-2 and Gobi Bear. 

In recent years, Petro Matad has focused largely on obtaining the government approvals required to achieve the first oil at Heron-1, while the prospectivity of the remainder of the Block XX field has received little attention.

The two upcoming drills have the potential to expand Petro Matad’s resource base and enhance the company’s investment case.

After recently raising around $9m, the firm is well funded and should be able to support further testing and evaluation of the field with cash flows from production.

We highlighted Petro Matad as a company to watch over the summer. Today’s announcement validates that view.

“With the Heron-1 down-hole completion now ready for production startup, the well site has been prepared for the installation of the surface production facilities. We are pleased to have concluded our negotiations with DQE and look forward to continuing to work with them on the 2024 drilling programme,” said Mike Buck, CEO of Petro Matad.

“The team is now working at pace to spud Heron-2 in mid-September and to secure the required construction permits for Heron-1.”

Another London-listed company has announced it has had enough of the low valuations provided by the UK’s public markets.

Eckoh has received a non-binding offer of 54p per share from an unnamed private equity investor after seeking a buyer for the company. The offer comes amidst ongoing discussions about a potential sale of the company with the board concerned ‘the share price did not reflect the fundamental value of the business.”

Just days after i3 Energy announced it has agreed to a takeover and will plans to leave London, Eckoh look to be hot on their heels in throwing in the towel on their time as a London-listed company.

Late last year, Eckoh’s board began exploring options to boost shareholder value, believing the company’s share price undervalued. In March 2024, financial advisers were appointed to assess potential sale opportunities.

Multiple parties have been in talks with Eckoh since May 2024. The 54p per share offer, received on July 12, 2024, is described as “highly conditional” and “revised.” Eckoh emphasizes that discussions with other parties continue and that there’s no certainty of a final offer or its terms.

The company notes recent share price movements but has made this announcement without the consent of any potential buyers. Due diligence is ongoing, and further updates will be provided as appropriate.

JD Sports has reported solid performance in its latest trading period, with like-for-like (LFL) sales up 2.4% and organic sales increasing by 8.3% on a constant currency basis.

This growth has led to first-half LFL sales rising by 0.7% and organic sales by 6.4%. The company attributes this quarter-on-quarter improvement to its multi-brand operating model and softer comparatives with the previous year.

Geographically, North America and Europe showed the strongest LFL growth at 5.7% and 3.0% respectively, while the UK market saw significant improvement compared to the previous quarter. Organic growth was achieved across all regions, with North America leading at 13.7%.

Despite what the company called a ‘volatile market’, JD maintained good promotional discipline and proactive inventory management to support gross margins. The group’s gross margin for the period was 48.4%, slightly down by 30 basis points from the previous year, with the UK experiencing the most impact due to higher online penetration.

The company recently completed the acquisition of Hibbett, Inc., adding 1,179 stores to its portfolio and strengthening its presence in the US market. This acquisition is expected to enhance the company’s brand relationships and provide a platform for growth in North America.

Investors will be encouraged JD Sports is maintaining its guidance range for profit before tax and adjusting items at £955m to £1,035m, on a pre-Hibbett basis. This forecast takes into account an anticipated £15m headwind due to a stronger pound at current exchange rates.

JD Sports has previously set themselves a target of £1bn profit before tax, which they are yet to meet, albeit by very narrow margins. Shareholders will hope 2025 is the year they overcome the barrier, or it will mean another year of flat growth.

“I am pleased to report like-for-like sales growth of 2.4% and organic sales growth of 8.3% in the second quarter, demonstrating the strength and agility of our multi-brand model,” said Régis Schultz, CEO of JD Sports Fashion.

“In particular, we saw double-digit organic sales growth in North America and Europe, supported by the continued success of our JD store rollout programme. We completed the acquisition of Hibbett, Inc. just before the period end and we look forward to its contribution to the growth and development of our US business in the coming years. Based on our first-half trading, we remain on track to deliver profit within our full-year guidance.”

Tekcapital announced updates for two of its portfolio companies on Wednesday: Innovative Eyewear is improving its point-of-sale experience for customers, and Guident is to integrate extended reality (XR) technology to create an immersive autonomous vehicle safety solution.

Guident is proving that its autonomous vehicle safety technology knows no bounds in terms of innovation. The company has teamed up with XRF, an augmented and virtual reality specialist, to enhance Guident’s fleet management capabilities as it rolls out solutions across the US.

Augmented, Virtual, and Mixed Reality will be integrated into Guident’s Remote Monitoring and Control Centres (RMCC) to enhance the visualisation of autonomous vehicles and their environments.

In addition to Guident, XRF has partnered with the Spanish Army and is involved in Saudi Arabia’s exciting NEOM Line project.

“Our partnership with Guident allows us to introduce an innovative solution for real-time managing of autonomous robots and AV fleets,” said XRF’s CEO Gustavo Medina.

“By integrating XRF software with Guident’s RMCC, fleet operators can monitor and respond to situations more effectively. The interactive training mode offers an exciting way to develop skills and prepare for multiple scenarios. We’re eager to bring this combined solution to market.”

Innovative Eyewear

As Innovative Eyewear steps up the distribution of Eddie Bauer and Nautica-branded smart eyewear, Innovative Eyewear is improving customers’ point-of-sale experience through a partnership with Geenee to use state-of-the-art virtual try-on (VTO) technology.

A partnership announced today will see the introduction of VTO interactive display boards in retailers, allowing virtual engagement with products. Customers will be able to try on Lucyd’s ranges virtually in-store, as well as on the Lucyd website.

Although Innovative Eyewear earned most of its revenue from e-commerce channels in the first half of 2024, the company has said its growth will be driven by retail outlets. Today’s announcement reaffirms this strategy. 

“We are excited to partner with Geenee as they will provide a terrific and fun solution to help guide our customers in their smart eyewear purchases,” said Harrison Gross, CEO of Innovative Eyewear.

“We believe that their fast and flawless VTO experience will enhance sell-through both online and in-store.”

The global markets will have a strong interest in just what is discussed and decided at the Jackson Hole Symposium on Friday of this week. 

Will it see Jerome Powell, the Chairman of the Federal Reserve, bring about the lowering of US interest rates after he pontificates about the US economy. 

Jackson Hole 

The Federal Reserve Bank of Kansas City’s Economic Policy Symposium in Jackson Hole, Wyoming, is one of the longest-standing central banking conferences in the world.  

The event brings together officials from the Federal Reserve, the Bank of England and the European Central Bank, together with economists, financial market participants, academics, US government representatives, and news media to discuss long-term policy issues of mutual concern.  

Interest Rates To Lower 

The betting is favouring the first of a couple of near-term interest rate falls, as early as Wednesday 18^th September. 

Which in turn could help the Governor of the Bank of England and his crew to drop our rates too. 

In Times Of Uncertainty 

Global markets of late have been somewhat jittery, especially two Monday’s ago after Japan fell out of bed. 

However, certain levels of normality have been returning to our UK equity market, and that is despite the uncertainty caused by the unemployment figures together with other worrying economic and political factors. 

In turn they have helped global players start to push the price of Gold through to new Highs. 

Jackson Hole, fresh buying from India and China, together with the imminent run-up to the US Presidential Election could all combine to inspire increased trading in the precious yellow metal. 

The Ultimate Liquidity? 

Three factors set gold apart as an investment from most other commodities: it is indestructible; it is fungible; and the inventory of above-ground stocks is enormous relative to the supply flow. 

Because of gold’s liquidity, it often acts more like a currency than a commodity.  

Some Gold Facts 

Around 187,200 tonnes of gold have been mined since the beginning of civilisation. 

Over 90% of the world’s gold has been mined since the California Gold Rush. 

If all of the existing gold in the world was pulled into a 5-micron thick wire, it could wrap around the world 11.2 million times. 

One ounce of gold can be stretched to a length of 50 miles; the resulting wire would be just five microns wide. 

One ounce of pure gold can be hammered into a single sheet nine metres square. 

It is rarer to find a one-ounce nugget of gold than a five-carat diamond. 

There are just over 31 grams in a troy ounce of gold. 

The temperature of the human body is 37 degrees centigrade. Gold’s conductivity of heat means that it rapidly reaches body temperature – one of the reasons it has become valued for jewellery. 

Gold melts at 1064 degrees centigrade. 

The boiling point of gold is 2808 degrees centigrade. 

Gold is often alloyed with other metals to change its colour and strength. Eighteen karat gold is composed of 750 parts of pure gold per 1,000. 

At today’s rate one tonne of gold is worth $83m. 

A “London Good Delivery Bar”, the standard unit of traded gold, is made from 400 troy ounces of gold. 

The US Federal Reserve holds 6,700 tonnes of gold, in 530,000 gold bars. At its peak in 1973, the Fed stored more than 12,000 tonnes of monetary gold. 

There are 147.3 million ounces – around 4,600 tonnes – of gold stored in the US Bullion Depository at Fort Knox. 

Even at only 10 parts of gold per quadrillion, the world’s oceans are estimated to hold up to 15,000 tonnes of gold. 

Just think – one gold bar of 400 ounces is today worth over $1m. 

Around half of all gold mined today is made into jewellery, which remains the single largest use for gold. 

In My View 

Now at over $2,540 an ounce, observers suggest a gradual push to test the $2,600, $2,800, and then the $3,000 levels could be an early possibility. 

For what it is worth, I see the price of Gold rising through the $2,600 level very soon, as it starts to creep even higher before the year-end. 

UK Oil & Gas PLC has announced plans for a second underground salt-cavern hydrogen storage facility in south Dorset through its subsidiary UK Energy Storage.

The project aims to provide between 6.5 and 10 Terawatt-hours of working storage annually, which could meet 10-20% of the UK’s projected hydrogen storage needs by 2050.

The company has secured a 60-year lease for land and subsurface mineral rights in an area with the thickest onshore Triassic salt deposit in Dorset. The location’s proximity to planned hydrogen infrastructure, including SGN’s H2 Connect pipeline, positions it as a key component of the emerging southern UK hydrogen super-cluster.

UK Energy Storage will now move forward with finalising the lease agreement, completing design studies, and preparing to submit a Nationally Significant Infrastructure Project planning application.

The company also intends to apply for government Revenue Support for at least one of its Dorset sites, underlining the strategic importance of these facilities in the UK’s future energy landscape.

“UKEn’s new Dorset site is optimally placed to exploit the thickest part of the onshore Dorset Triassic salt deposit, permitting large underground caverns to be emplaced via a modest sized surface facility,” said Stephen Sanderson, UK & Oil and Gas Chief Executive.

“Its proximity to SGN’s H2 Connect pipeline is deliberate and will ensure storage can be directly linked to the planned Solent Cluster and wider Southern UK hydrogen networks.

“We look forward to continued collaboration with government to develop these strategic UK energy infrastructure assets and to help make the 2030 UK power decarbonisation target a reality.”