The Isle Of Man registered Petro Matad (LON:MATD) is looking to raise $8.5m by way of a Placing and a Subscription by a Director, together with a $0.5m Retail Offer of new shares at 2.0p each.

The net proceeds of the Capital Raising will primarily be used to complete and put Heron-1 on production, drill, complete Heron-2 and put on production, drill the Gobi-Bear 1 exploration well and develop renewable energy projects.

The Capital Raising is being handled by Joint Bookrunners – Shore Capital and Zeus Capital, with the gross proceeds expected to be up to $9.0m before expenses.

The Use Of The Proceeds

CEO Mike Buck stated that:

“This capital raise will allow Petro Matad to commence the development of the Heron oil discovery with the goal of generating sufficient production revenue to cover the operating costs of the company and to accumulate cash to allow for the drilling of future appraisal and development wells to increase proven reserves and production.

The raise also includes funds to drill the low cost, high impact Gobi-Bear 1 exploration prospect at the southern end of the prolific Tosun Uul sub-basin.

The prospect has estimated recoverable resource potential of circa 100 million barrels close to the Heron field.

In addition, with Petro Matad’s SunSteppe Renewable Energy joint venture already having secured two development projects, a number of new opportunities are being worked up and ranked to prioritise the most attractive near term targets.

The raise includes a small amount of extra development funding to bring the high-graded projects to internationally bankable, build ready status.

Petro Matad expects to sign two new Production Sharing Contracts with the government of Mongolia later in 2024 or early in 2025, and the company is keen to advance these projects in parallel with its existing business.

We are pleased to have been able to access the funding needed to kickstart development operations and to offer participation in the raise to existing shareholders through the Bookbuild platform.”

The Company’s Interests

Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia.

Currently, Petro Matad holds 100% working interest and the operatorship of two Production Sharing Contracts with the government of Mongolia.

Block XX has an area of 214 sq.km in the far eastern part of the country, and Block V has an area of 7,937 sq.km in the central part of the country.

Just a week ago, when announcing the 2023 Final Results to end December, CEO Mike Buck informed the group’s shareholders that:

“2023 proved to be a frustrating year on Block XX, where the significant step of Cabinet approval of State Special Purpose Certification for the area did not translate into a rapid renewal of Petro Matad’s licence to operate.

Whilst that certification is still to be finalised and is having to wait until after the imminent Mongolian parliamentary elections, the fact that we were recently able to secure locally approved land use agreements for the areas in which our next operations are planned, ends a very long wait.

We share our shareholders’ relief and excitement that the completion operations on Heron 1 will go ahead with contractors planned to mobilise in July to prepare the well for production.

Negotiations with PetroChina for oil transport, processing, export and sale are ongoing with the support of the industry regulator.

The Company will be focussing maximum effort on moving the Heron development forward through the second half of 2024 and I look forward to updating you further.”

The group’s shares, which a year ago were 5.7p each, closed last night at 3.75p, valuing it at £42.95m before the Capital Raise at the deeply discounted 2.0p per share.

Selling pressure in the United States slipped into the European session on Tuesday as cyclical names dragged on the FTSE 100.

The UK doesn’t have the weighting towards the technology sector in the way the US does, so traders looking at declines in US indices overnight picked out the closest thing to it in stocks sensitive to investors’ sentiment.

London’s leading index was down by 0.2% at the time of writing with stocks such as Rolls Royce, Burberry, Melrose, and a splattering of banks, leading the declines.

Rolls Royce was the top faller, with a 4% drop after Airbus said it was experiencing supply chain issues and cut its profit forecast. Airbus is a major Rolls Royce customer, suggesting Rolls Royce itself may be encountering difficulties.

Although the FTSE 100 was in the red on Tuesday, the selling was contained by a tick-up in US futures, implying the dip in the US will be short lived.

“Last night’s sell-off in certain US tech stocks doesn’t appear to have had any lasting damage given how futures prices are pointing towards an ‘up’ day for Wall Street on Tuesday,” said Russ Mould, investment director at AJ Bell.

The nature of the US selloff should be of little concern for UK investors. The declines were limited to a select few tech stocks, including Nvidia, who have made astronomical gains amid the AI gold rush.

“Admittedly, a near-7% decline in Nvidia might have sounded the alarm bells that we’re seeing a shift in the market. It’s important to remember that stocks don’t always travel in a straight line and there is a herd mentality with big-name companies on the market,” Mould said.

The AI boom has driven global equities higher over the past 18 months, and any hints it could be overheating will undoubtedly be met with risk aversion.

Landsec, the London-listed Real Estate Investment Trust, has strengthened its position in the UK retail market by acquiring an additional 17.5% stake in Bluewater shopping centre. The £120 million purchase from GIC increases Landsec’s ownership of Bluewater to 66.25%.

The transaction is expected to boost Landsec’s net rental income by £10.3 million annually, based on the performance of its existing investment in Bluewater over the year to March 2024.

Landsec shares were 0.16% higher at the time of writing.

Bruce Findlay, Managing Director of Retail at Landsec, highlighted the significance of the deal: “This transaction demonstrates our ability to create value through prime investments in scarce, major retail destinations with attractive return profiles. Bluewater is a key part of our strategy to further build relationships with leading brands.”

Bluewater spans over 240 acres and housing more than 300 stores, restaurants, and entertainment venues. This mix of retail and experiences means the centre has managed the shift in consumer trends better than a typcial high street. Bluewater attracts over 27 million visitors annually.

Chapel Down, the leading English winemaker, has announced a strategic review of its funding options to support ambitious growth plans.

The company’s Board aims to secure capital for investments in new vineyards, a state-of-the-art winery, and the development of its brand home in Tenterden.

Although the company is on track to deliver double-digit sales growth in 2024, Chapel Down has outlined the requirement for external funds to support its plans.

The strategic review will explore a range of funding options, including investments from existing and new shareholders, a potential sale of the company, and ‘other relevant transactions’.

Chapel Down shares were down 1% at the time of writing.

“Fancy owning an English wine maker? Now’s your chance as Chapel Down has effectively put itself up for sale,” said Russ Mould, investment director at AJ Bell.

“Coming so soon after moving from the Aquis stock exchange to AIM, one might think something negative is afoot. Yet it makes sense to have raised the company’s profile by switching exchanges ahead of putting the ‘for sale’ flag up.

“Chapel Down has made a name for itself over the years but the business appears to have a hit the ceiling in terms of scale. To grow even more, it really needs a big slug of cash to invest in the business and that might be better coming from a new, bigger owner, rather than going cap in hand to shareholders on an ad hoc basis.

“Plenty of big drinks companies would be in the market for a niche player like Chapel Down as it could add something new for them to get their teeth into, and also as a way of cross-selling products.”

After last Thursday’s profit warning by YouGov (LON:YOU), the international online research data and analytics technology group, its shares almost halved from the 838p they reached during the previous day’s trading, to close at just 440p.

As if that was not bad enough, they fell again yesterday to as low as 412p at one stage, before closing at 439p.

Almost puzzling many investors who would have thought that the UK General Election, creating a veritable plethora of daily poll announcements, would be creating massive upside for the group.

Now the question is whether its shares, which were at 1,230p each in early February this year, still look overpriced, and do they have further to fall?

The Business

The £511m capitalised company, which was founded in 2000 by Stephen Shakespeare and former Chancellor of the Exchequer Nadim Zahawi, declares that its mission is to offer unparalleled insight into what the world thinks.

Considering that its shares were trading at over 1,600p a couple of years ago – the reaction would be that perhaps investors have better insight than the company’s management.

The group claims that its innovative solutions help the world’s most recognised brands, media owners and agencies to plan, activate and track their marketing activities better.

The company claims that its purpose is to give the world a voice through its global community by collecting, measuring and analysing their opinions and behaviours and reporting the findings accurately and free from bias.

It boasts of having one of the world’s largest research networks, with operations in the UK (with 2 offices), the Americas (8), Europe (15), the Middle East and India (4) and the Asia Pacific (8).

The core of its platform is an ever-growing source of connected consumer data that has developed daily over the last couple of decades or so of operation.

The group, which refers to it as living data, is drawn upon the detailed understanding of its 27m registered panel members to deliver accurate, actionable consumer insights.

The group has over 4,300 clients worldwide and claims to be the most quoted market research source worldwide.

Last Thursday’s Trading Update

The company reported that following the half-year results, it has seen lower sales bookings than anticipated, and as a result it now expects reported revenues for the year to end July will be some £324m-£327m and that it now expects full-year adjusted operating profit to be £41m-£44m.

Analyst View

Analyst Jessica Pok at Peel Hunt considers that the group is continuing to address its issues, but that the statement was very disappointing.

She stated that she was expecting a downgrade but that it was larger than she expected.

“YouGov has been impacted by slower client spend and intensified competition for data products.

Despite these challenges in the short term, the company is addressing the issues, and is focusing on investment in data product upgrades and artificial intelligence, sales organisation enhancement, and cost base reduction.”

The analyst retained her Buy on the group’s shares, while keeping her Price Objective of 1,500p on the equity.

The average of the consensus of six analysts that follow the group suggests that the shares could well Outperform, with Peel Hunt’s 1,500p being the highest price expectation, while the lowest is now 370p – with the average being 922p.

My View

On the face of it, I would have thought that this group’s shares are still overpriced and could so easily fall further, ahead of the end of July when we should get the Year End Trading Statement.

They are currently trading at around 441p.

Former Conservative Party Treasurer and major donor Michael Spencer is building up his open position in the shares of the Alaska North Slope oil and gas group Pantheon Resources (LON:PANR).

Michael Spencer

Billionaire Spencer, 69, aka Baron Spencer of Alresford, is better known for his ICAP business, a world-leading intermediary in the wholesale financial, energy and commodities markets.

Spencer is Chairman, director and majority shareholder in IPGL, a private holding company making investments on behalf of Spencer and other family trusts.

Pantheon Resources

Pantheon is an independent oil and gas company with a 100% working interest in a portfolio of high-impact oil projects focused on the Alaskan North Slope spanning some 193,000 acres, all on state (not federal) land.

The company is expecting that an additional 60,000 acres will be formally awarded this summer.

The Alaska North Slope is a prolific oil province now regarded as a ‘Super Basin’ which is experiencing an exploration and development revival.

Pantheon and its wholly-owned subsidiary, Great Bear Petroleum, has been operating in Alaska for over a decade where it has invested over $350m in building and appraising its portfolio, which includes several major discoveries.

In Alaska, Pantheon has discovered two major fields, Kodiak and Ahpun, which the company estimates contain contingent recoverable resources in excess of 2bn barrels of marketable liquids. 

Market View

Analysts Charlie Sharp and Phil Hallam at Canaccord Genuity currently have a Buy rating on Pantheon’s shares with a Price Objective of 90p.

Spencer and his IPGL company have increased their total position in Pantheon’s shares from 7.01% to 8.11%.

In the last year the oil and gas group’s shares have been as High as 45.50p and as Low as 10.10p – they are currently trading at 25.00p, valuing the whole company at £240m.