AIM weekly movers: Rockhopper Exploration jumps on compensation award

Andrew Hore
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AIM weekly movers: Rockhopper Exploration jumps on compensation award

A successful outcome to arbitration proceedings sent shares in Falkland Island oil and gas explorer Rockhopper Exploration (LON: RKH) 61.1% higher to 14.1p. Compensation of €190m has been awarded plus interest compounded annually from 29 January 2016. The Italian government breached its legal obligations when it did not award a production concession for the Ombrina Mare field. The government has 120 days to apply for an annulment of the compensation. Rockhopper Exploration expects to retain 80% of the payment after costs. An agreement with the Falkland Island government means that this cash cannot be distributed to shareholders it has to be retained in the company.

Angus Energy (LON:ANGS) shares jumped60.8% to 2.05p after it announced that it had produced well head gas at its extraction and processing facility at Saltfleetby. Well B2 is producing five million standard cubic feet of gas per day, which is more than expected.

Egdon Resources (LON: EDR) holds 30% of the Wressle oil project and the share price jumped 37.4% to 6.8p after Union Jack Oil (LON: UJO), which owns 40% of Wressle, said that it has generated revenues of $9m for the company since re-commencement of production in August 2021. Union Jack Oil shares did not react as sharply as those of Egdon Resources even though it owns a higher percentage, but there was still a 10.3% rise to 32p. Europa OIL & Gas (LON: EOG) holds the other 30% of Wressle and the share price is 7.14% higher at 3p.

Record quarterly production of 14,467 barrels of oil a day helped PetroTal Corp (LON: PTAL) to generate net operating income of $98.6m in the second quarter of 2022. Free cash flow was $69.4m in the first six months of 2022. Production levels continue to increase. The 26,000 barrels of oil a day capacity of the central processing facility was nearly reached. The PetroTal share price is up 29% to 50p.

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Fallers

OptiBiotix Health (LON: OPTI) was the worst performer of the week with a 36.3% share price decline to 19.125p. Sales of the core prebiotics business fell in the first half due to customer delays in restocking and postponing of product launches. Larger partners are placing fewer, but more significant orders, which can make revenues lumpy. Orders may recover in the second half as delayed product launches happen. The figures will no longer consolidate 40%-owned ProBiotix Health (LON: PBX) following its spin-off on Aquis. That generated a gain in book value of £13.8m. OptiBiotix Health has £1.5m in cash.

Greatland Gold (LON: GGP) raised £29.7m in a placing at 8.2p a share, having originally sought £25m. The share price slumped 21% to 8.3p during the week. Newcrest Mining’s decision not to take up the option to buy a further 5% stake in the Havieron gold project in Western Australia sparked the fundraising. The share price was 10.4p before that decision was made public. Greatland Gold retains a 30% stake in Havieron. The price for the 5% stake had been set at $60m and much of that cash was earmarked to pay off loans from Newcrest Mining. Tribeca Investment Partners is putting up $13.8m of the new cash and it has agreed to provide $27.6m of additional funding to finance the development costs of Havieron. Bank debt is also being sought.

Independent Oil and Gas (LON: IOG) has been hit be development problems and the share price fell 19.2% to 29.4p. Full year gas production guidance has been reduced from 45-60mmcf/day to 30-50mmcf/day. Operating costs will be higher. The Saturn Banks phase 1 development problems have offset the positive of the initial revenues generated in the first half of 2022. The interim revenues were £30.2m and full year revenues of £86.2m are forecast and that could generate pre-tax profit of £50m. Earlier in the week. London Oil & Gas Ltd, which is in administration, reduced its shareholding from 26.99% to 25.83%.

Haydale Graphene Industries (LON: HAYD) has raised £5m at 2p a share and an open offer at the same price could raise up to £510,000. The share price slumped 18.8% to 2.6p due to this news. Haydale is developing inks and other products using its graphene technology that can be used in the aerospace, automotive, medical and electronics markets. The cash will fund the scaling-up of operations. There is a warrant attached to every two shares issued and they are exercisable at 2p a share.

ECR Minerals (LON: ECR) has received A$950,000 from the sale of the Bendigo property – the property was bought A$887,500 one year ago. A subsidiary will continue to use the property until the end of the year. The share price had already fallen 16.2% to 0.775p prior to the announcement. Next month follow-up drilling at the Blue Moon gold prospect will commence and if the results are positive the drilling programme will be expanded.

FTSE 100: Markets spiral after Powell Jackson Hole comments

Natasha Doris
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FTSE 100: Markets spiral after Powell Jackson Hole comments

The long-awaited Jackson Hole convention delivered with a bang and more, with US Federal Reserve chair Jerome Powell’s speech sending markets on both sides of the Atlantic into a spiral.

The FTSE 100 closed down 0.7% at 7,426.6, as confirmation of probable higher interest rates put investors in a pessimistic mood to finish the week.

However, the blue chip index appeared to escape the worst of the impact. European markets fell as Powell’s remarks piled on the bad news in the wake of soaring energy prices and Russia’s chokehold on gas supplies amidst the Ukraine war.

The German DAX dropped 2.3% to 12,957.4, the French CAC slid 1.9% to 6,259.9 and the Italian FTSE MIB fell 2.4% to 21,897.7.

US markets were unsurprisingly hit by Powell’s remarks, with the NASDAQ down 2.5%, the Dow Jones falling 1.7% and the S&P 500 declining 2% in the immediate aftermath. On the close in the US, the NASDAQ had given up 3.9% and S&P 500 3.1%.

Energy price cap chills consumer stocks

Meanwhile, the UK woke up to a bucket of cold water in the form of a whopping 80% rise in the Ofgem energy price cap to £3,549.

Consumer facing stocks had a bad day of trading, as investors assumed the extra hundreds of pounds per month soon to be required for energy bills would be going towards energy suppliers and not towards new fashion, furniture or leisure activities.

Retail stocks slid, with B&M down 1.4% to 369.8p, JD Sports Fashion dropping 3.7% to 109.6p, Next falling 2.2% to 5,756p, Ocado declining 4.2% to 731.2p, Sainsbury’s sliding 2.4% to 203.4p and Tesco decreasing 1.4% to 252.7p

Consumer products joined the fallers, with Reckitt Benckiser losing 0.7% to 6,572p and Unilever decreasing 0.9% to 3,931p.

Hotels and flights also saw the writing on the wall, as InterContinental Hotels dropped 4.4% to 4,747.1p and IAG fell 2.5% to 106.1p.

“With households in limbo waiting for a rescue package from whoever prevails in the Conservative leadership contest, the harm to consumer sentiment is only likely to fester,” said AJ Bell investment director Russ Mould.

“The need to find potentially hundreds more a month to light or heat a home is likely to squeeze disposable incomes to such an extent that spending on going out, buying new clothes, furniture or going on holiday will become beyond the means of many people. That spells bad news for already pressured retailers and other consumer-facing firms.”

Miners rise on higher copper prices

Higher copper prices boosted mining stocks, with the commodity rising 17% from its mid-July low. The metal gained 1.9% to $8,279.50 a tonne on the London Metal Exchange in early trading.

Mining companies crowded the top of the blue chip index, with Antofagasta rising 0.8% to 1,176.5p, Anglo American climbing 0.2% to 2,926.5p and Rio Tinto gaining 1.4% to 4,980p.

Jerome Powell says interest rates probably set to climb higher at next US Fed meeting

Natasha Doris
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Jerome Powell says interest rates probably set to climb higher at next US Fed meeting

Jerome Powell smashed hopes that the US Federal Reserve would take a less aggressive stance at its next interest rates decision, and said a single month of lower inflation was insufficient to decide against higher rates at the coming meeting in September.

The US Fed chair confirmed long-running assumptions that higher interest rates were going nowhere fast at the annual Jackson Hole convention on Friday.

“Inflation is running well above 2%, and high inflation has continued to spread through the economy. While the lower inflation readings for July are certainly welcome, a single month’s improvement falls far short of what the committee will need to see before we are confident that inflation is moving down,” said Powell.

He commented the US economy was evidently slowing from its high growth rates of 2021, however the economy continued to show strong underlying momentum.

Powell added the employment market remained tight and out of balance, with demand for workers considerably exceeding the supply.

“The Federal Open Market Committee’s overarching focus right now is to bring inflation back down to our 2% goal. Price stability is the responsibility of the Federal Reserve, and serves as the bedrock of our economy. Without price stability, we will not achieve a sustained period of strong labour market conditions that benefit all,” said Powell.

“Restoring price stability will take some time, and requires using our tools forcefully, to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below trend growth.”

“Moreover, there will very likely be some softening of labour market conditions, while higher interest rates, slower growth and softer labour market conditions will bring down inflation, they will also bring some pain to households and businesses. But a failure to restore price stability would mean far greater pain.”

He said the most recent interest rates hike to 2.25% to 2.5% was within the summary of economic projections range of estimates for where the federal funds rate was projected to settle in the long term.

However, the next decision would depend on the overall picture of the US economy and its general outlook by the time of the US Fed’s next meeting.

“We our moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%. Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook.”

“In current circumstances with inflation running far above 2% and the labour market extremely tight, estimates of longer run neutral are not a place to pause or stop.”

Powell added that restoring price stability would likely mean employing a restrictive policy for “some time.”

Twitter ordered to give 2021 users audit data to Elon Musk

Natasha Doris
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Twitter ordered to give 2021 users audit data to Elon Musk

A judge has ordered Twitter to give Elon Musk the data from its 2021 users audit, in which the social media giant sampled 9,000 accounts to gauge the number of spam accounts on the site.

The Tesla Tycoon has been attempting to back out of his original agreement to purchase Twitter for $44 billion, and claimed the site failed to disclose information about the volume of bot and spam accounts on the social media platform prior to striking the deal.

A lawsuit was subsequently filed against Musk in Delaware for attempted breach of contract.

Twitter previously claimed the data from the audit did not exist, and that it would be difficult to acquire.

Delaware Court of Chancery chancellor Kathleen McCormick gave Twitter two weeks to turn over the user data from the 2021 audit to Musk, however the Space X founder’s other requests were dismissed as “absurdly broad.”

“Defendants’ data requests are absurdly broad. Read literally, defendants’ documents request would require plaintiff to produce trillions upon trillions of data points,” wrote McCormick.

Twitter said it wanted Musk to purchase the platform at the originally agreed price of $54.20 per share. Shares in the company are currently trading at $41.12, representing a rather significant decline of $13.08.

A five day trial regarding the acquisition dispute has been scheduled for 17 October 2022.

AIM movers: Alumasc sells loss maker and Wressle cash boosts three oil companies

Andrew Hore
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AIM movers: Alumasc sells loss maker and Wressle cash boosts three oil companies

Building products supplier Alumasc (LON: ALU) is selling the poorly performing solar shading manufacturer and installer Levolux to Talrus Ltd, which is owned by Rcapital, for £1. Despite shedding a loss maker, the Alumasc share price fell 2.93% to 132.5p. Levolux has around £1.4m in cash and that is part of the disposal. There is deferred consideration of £1m which will be paid out of the proceeds of a disposal of the Levolux business. The impairment charge for Levolux will be £14.9m, while the £2m operating loss will be reported as a discontinued activity. The figures for the year to June 2022 will be reported on 6 September.

Oil and gas company i3Energy (LON: I3E) produced an average of 19,502 barrels of oil equivalent / day, which is more than double last year but there have been delays in bringing additional wells into production. Net operating income guidance has been cut from $241m to $200m for 2022 and the capital budget is $97m. The newer wells should boost production in the current quarter and there will be news concerning initial production from the new wells. Even though, production is currently slightly lower than forecast WH Ireland is maintaining its full year forecast at 21,077 barrels of oil equivalent / day. The company expects to peak at more than 24,000 barrels of oil equivalent / day. The share price fell 4.93% to 26.525p.

Independent Oil and Gas (LON: IOG) shares continue to decline after the disappointing interim results. The share price fell a further 8.2% to 28p.

Replacement windows company SafeStyle UK (LON: SFE) is delaying the capital markets day from 7 September to after the interims are released on 22 September. Management blames market uncertainty and the potential effect on the medium-term vision for the business. The share price slipped 4% to 36.5p.

Union Jack Oil (LON: UJO) says that the 40%-owned Wressle project has generated revenues of $9m for the company since re-commencement of production in August 2021. This has enabled the company to be cash flow positive with £9.46m of cash in the bank. Union Jack Oil shares increased by 4.07% to 32p. Egdon Resources (LON: EDR) holds 30% of Wressle and the share price jumped 13.6% to 6.7p. Europa OIL & Gas (LON: EOG) holds the other 30% and the share price is 4.31% higher at 3.025p.

Shares in Angus Energy (LON: ANGS) continue to rise following yesterday’s news that it has produced well head gas at its extraction and processing facility at Saltfleetby. The latest rise of 12.5% to 1.8p means that the share price is two-fifths higher than at the beginning of the week.

Westminster Security Group (LON: WSG) has won a contract to provide a mass entry screening system to an unnamed iconic building in the UK. This will be in line with new legislation and enable the screening of a large number of people without causing delays and long queues. The contract is worth more than £100,000 and should be completed in a few weeks. The share price is 6.38% ahead at 1.25p.

OpenText shares almost double on $6bn Micro Focus acquisition

Natasha Doris
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0
OpenText shares almost double on $6bn Micro Focus acquisition

Micro Focus shares hit the roof with a 92.7% surge to 516.3p in late morning trading on Friday, after the company accepted an acquisition offer from information management solutions group OpenText for approximately $6 billion.

Micro Focus is one of the largest global software companies, and had a $2.7 billion pro forma trailing revenue for the 12 months to 30 April 2022.

“We are pleased to announce our firm intention to acquire Micro Focus, and I look forward to welcoming Micro Focus customers, partners and employees to OpenText,” said OpenText CEO & CTO Mark J. Barrenechea.

“Upon completion of the acquisition, OpenText will be one of the world’s largest software and cloud businesses with a tremendous marquee customer base, global scale and comprehensive go-to-market.”

“Customers of OpenText and Micro Focus will benefit from a partner that can even more effectively help them accelerate their digital transformation efforts by unlocking the full value of their information assets and core systems.”

Meanwhile, analysts commented the acquisition signalled a further weakening of the UK tech sector, with the pessimistic market outlook including a weak Pound Sterling leaving the country’s companies ripe for plucking by international bids.

“Weak sterling, to match a gloomy outlook for the UK economy, is once again leaving UK plc vulnerable to overseas bids and Micro Focus International looks to have fallen prey to a $6 billion offer from larger Canadian rival Opentext,” said AJ Bell investment director Russ Mould.

“While the premium for shareholders looks pretty healthy when compared with yesterday’s close, it is below the level the company traded at in 2019. It also further dilutes an already pretty threadbare-looking tech sector on the UK market.”

i3 Energy shares fall on lowered FY 2022 income guidance

Natasha Doris
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0
i3 Energy shares fall on lowered FY 2022 income guidance

i3 Energy shares fell 6.9% to 25.9p in late morning trading on Friday after the company announced a lowered FY 2022 net operating income forecast of $200 million compared to its previous expectation of $241 million.

The energy group attributed its lowered projection to volatile near-term commodity pricing.

i3 Energy reported a Q2 2022 average production of approximately 19,502 boedp, representing a 116% rise against Q1 2021 and an 8% growth from Q1 2022, despite drilling delays as a result of seasonal weather-related disruptions and maintenance shutdowns at third party facilities.

The firm highlighted average field sales estimates exited July over 20,000 boepd, with current field expectations of approximately 20,500 boepd.

i3 Energy confirmed seven wells drilled across Q2, with five operated and two non-operated and production testing currently underway.

The company also noted a 25% completed working interest farmout of the Serenity discovery to Europa Oil and Gas, with Europa reportedly financing 46.25% of the expense for the upcoming appraisal well, up to a gross capped well cost of £15 million.

The project is scheduled to spud in the mid-September 2022.

“The second quarter was another very busy period for i3. The Company managed to increase base production levels quarter on quarter, without any contribution from our Q2 drilling campaign, despite delays and operational challenges caused by expected seasonal wet weather conditions and maintenance shutdowns at third party facilities,” said i3 Energy CEO Majid Shafiq.

“The recently drilled wells from our Q2 campaign have been tied in post quarter end and will imminently commence making a material production contribution post clean-up.”

“Our expanded drilling campaign in Canada proceeds at pace and preparations for appraisal drilling on the Serenity field in the UK are on track for an expected spud in mid-September. We look forward to providing further updates to the market over the coming weeks.”

i3 Energy is set to pay its next monthly dividend of 0.1p per share on 2 September 2022.

Galantas Gold Corporation narrows net loss to $1.5m

Natasha Doris
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0
Galantas Gold Corporation narrows net loss to $1.5m

Galantas Gold Corporation shares climbed 2.8% to 36p in late morning trading on Friday, after the gold miner reported a narrowed net loss in Q2 2022 to $1.5 million compared to $2.8 million the year before.

Galantas Gold Corporation linked the reduction in net loss to a fall in the value attributed to stock based compensation and a drop in financing activities from FY 2021.

The firm announced a cash loss from operating activities of $1.7 million against a profit of $144,806 in Q2 2021.

Galantas Gold Corporation highlighted $66,995 in cost and operational expenses from $61,333, along with general administrative expenses of $1.4 million compared to $2.7 million.

The company noted a cash balance of $903,455 at 30 June 2022 against $6.1 million year-on-year, with a working capital deficit of $3.6 million compared to a working capital surplus of $4.5 million the last year.

Logistics Development Group swings to £786k loss on investments

Natasha Doris
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0
Logistics Development Group swings to £786k loss on investments

Logistics Development Group shares dipped 0.7% to 13.2p in early morning trading on Friday after the firm swung to a pre-tax loss to £786,000 in HY1 2022 against a £21.6 million profit the last year.

Logistics Development Group attributed its falling profitability to a small loss on investments at fair value in the last term, compared to a significant comparative period gain on investment at fair value as a result of its sale of Marcelos’ investment in GreenWhiteStar Acquisitions Limited.

The company announced a net finance cost of £245,000 against an income of £22.1 million year-on-year.

Logistics Development Group reported a total comprehensive loss for the financial period of £786,000 from an income of £21 million in HY1 2021.

The group highlighted a basic loss per share of 0.12p compared to an earnings per share of 4.2 the last year.

Logistics Development Group did not issue a dividend for HY1 2022.

JTC to acquire New York Private Trust Company

Natasha Doris
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0
JTC to acquire New York Private Trust Company

JTC shares dipped 0.2% to 759p in early morning trading on Friday, after the fund management services firm announced its proposed acquisition of New York Private Trust Company.

According to JTC, the acquisition will support the its strategy to expand its presence in the US market, and to develop a US domestic trust services branch.

New York Private Trust Company’s Delaware offices will join JTC’s existing US locations in Miami, New York and South Dakota.

The consideration is set to be paid in cash, pending closing conditions and final regulatory approvals.

JTC said it expected the transaction to close before the end of FY 2022, at which time additional details will be reported.

“We are delighted to announce the proposed acquisition of New York Private Trust Company, subject to final regulatory approvals,” said JTC CEO Nigel Le Quesne.

“NYPTC is a high quality private client business that will expand our existing US footprint and support our ambitions to create a market-leading US domestic trust business.”

“The NYPTC team have an outstanding reputation for delivering the highest levels of client service and taking an innovative approach across a broad spectrum of asset classes. In anticipation of formal completion, we extend a warm welcome to our new colleagues and clients.”

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