Pantheon Resources – Billionaire Tory Donor Builds Up His Stake In The Alaskan Oil & Gas Company

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.

Prudential leads FTSE 100 higher as Europe recovers

The FTSE 100 rose on Monday amid a broad rally in European stocks as traders looked past French elections to value in Euro-area stocks after a sharp sell-off since the surprise snap elections were announced.

The FTSE 100 was 0.5% higher at the time of writing, with Prudential leading the charge higher. A wave of buying in European stocks saw the French CAC gaining 0.9% and German DAX adding 0.6%

France’s flagship CAC 40 gave up around 10% after President Macron announced shock elections – a move that saw London crowned Europe’s largest stock market once more.

The macro agenda was fairly light on Monday, so individual names had a chance to drive price action as investors waited for economic data points later in the week.

There was a sustained bid in retailers that spilled over from last week with JD Sports, Frasers Group and Burberry among the top gainers. Frasers Group was helped higher by a new strategic partnership with THG involving the adoption of THG’s Ingenuity platform and acquisition of luxury websites.

JD Sports added 3.3%, while Frasers Group gained 2.9%.

Prudential shares

Prudential was the FTSE 100’s top gainer after announcing a capital management plan that was headlined by the return of $2bn capital to shareholders before 2026 by way of share buybacks.

“I am pleased with the progress we continue to make in executing our strategy, as we drive towards generating growth in both value and cash returns for shareholders over the long term,” said Prudential CEO Anil Wadhwani.

“The significant growth opportunity ahead of us has not changed and we remain focused on realising that opportunity.”

Prudential shares were over 5% at the time of writing.

Interest rates

Although there was a lull in interest rate-sensitive events on Monday, expect commentary and positioning to pick up as the week progresses as traders look to PCE inflation data and hints of when the Fed may first cut rates.

“The big economic news comes at the end of this week with a reading of US core PCE inflation – the Federal Reserve’s preferred measure of prices. Investors will be looking for signs the inflationary pressure which has led to a ratcheting back of expectations on interest rate cuts are starting to ease,” said AJ Bell investment director Russ Mould.

AIM movers: Empyrean Energy reveals Mako progress and Beacon Energy disappoints

0

Oil and gas company Empyrean Energy (LON: EME) says the Mako joint venture, where it has a 8.5% participating interest, has entered a binding gas sale agreement with PGN for the domestic portion of gas from the Mako field in Indonesia. The deal is subject to the construction of a gas pipeline. This covers 122.8 trillion British thermal units. The rest of the gas will be sold to Singapore. The share price jumped 51.1% to 0.355p.

Portable oxygen devices developer Belluscura (LON: BELL) says that there is significant interest in its proposed placing of convertible loan notes. An investor has also subscribed £300,000 for shares at 15p each. This provides additional working capital. The share price recovered 13.3% to 17p.

Better news from video games publisher tinyBuild (LON: TBLD) because sales in the first five months of 2024 are slightly ahead of expectations. Cash burn is reducing, although there is still investment in new games. The performance will be second half weighted, though. Surgeon Sim IP has been sold to Atari. The share price rebounded 10% to 5.5p.

Aptamer (LON: APTA) has signed two more contracts for Optimer binders for a total value of up to £235,000. The larger contract is for the use of Optimer binders for use in immunohistochemistry. The other involves the development of Optimer binders for diagnostic assay kits. The share price moved 7.14% ahead at 0.75p.

FALLERS

Beacon Energy (LON: BCE) says that the stabilised rate for the Schwarzbach-2 sidetrack is in the range of 50-100 barrels/day, which is much lower than the 900 barrels/day expected. This could be due to reservoir damage in the higher reservoir or poor permeability in the lower reservoir. Costs are being reduced and the accounts will not be ready by 1 July so trading in the shares will be suspended.

Kore Potash (LON: KP2) says that discussions with PowerChina over the engineering, procurement and construction proposal for the Kola potash project in the Republic of Congo continue and the singing of documentation could be in July, rather than by the end of June. More cash will be required for further development of the Kola project. The share price has fallen by one-quarter to 1.2p.

Graphene technology developer Directa Plus (LON: DCTA) says investors with nearly one-fifth of the shares intend to vote against the £6.8m fundraising at 18p/share. Management says that it needs the cash to grow the company and other funding may not be on as good terms. Shareholders are being urged to vote in favour of the general meeting resolution. The share price is 10.3% lower at 17.5p.

Ariana Resources (LON: AAU) has set up a low-cost and relatively mobile detectORE laboratory at the Dokwe project in Zimbabwe. This can produce gold analytical results much faster than sending the drill core to a laboratory. This technology could be used in Turkey. Ariana Resources reported a much lower pre-tax profit of £59,000 in 2023, down from £5.02m, partly due to exchange gains on the Turkish currency declining from £712,000 to £2.82m. The share of the profit of the Turkish associate company slumped from £6.01m to £2.08m. The share price slipped 5.88% to 2.4p.

tinyBuild sales above expectations despite ‘challenging backdrop’

tinyBuild, the premium video games publisher and developer, has released a trading update for the first five months of 2024, revealing sales slightly ahead of expectations.

tinyBuild shares were 2% higher at the time of writing.

The company’s performance offers a mixed picture for investors, with some positive indicators tempered by persistent market difficulties.

Revenue for the first five months of 2024 has marginally exceeded expectations, a welcome development given the tough time the company had last year.

tinyBuild has emphasised release schedule remains heavily weighted towards the second half of the year, and investors will hope these releases will do materially better than the disappointing launch of some titles this year.

Looking ahead, tinyBuild’s has several high-potential games in development. The company added one million new wishlists across its portfolio in the past month, a key indicator of future sales potential. However, management remains cautious, acknowledging the risks associated with new launches and maintaining a focus on cost control.

SIG revises 2024 profit forecast amid challenging market conditions

SIG plc, a leading European supplier of specialist insulation and building products, has issued a trading update indicating a downward revision of its profit forecast for 2024.

SIG shares were down 10% after the company alluded to persistent challenging market conditions as the primary driver behind lowering profit expectations for the year.

The Group reports that like-for-like sales have declined by approximately 7% in May and June to date, mirroring the trend observed in the first four months of the year.

This performance falls short of previous expectations, prompting the Board to revise its full-year underlying operating profit forecast to a range of £20m-£30m, below current analyst projections.

SIG attributes the subdued demand to ongoing softness in the building and construction sector, with the impact most pronounced in the French and German markets, as well as in the UK Interiors business.

While the company’s operations in Poland, Ireland, and UK Exteriors continue to demonstrate more robust demand, overall group sales have underperformed expectations in recent weeks.

Belluscura announces fundraising amid strong interest in CLNs

Belluscura announced successful fundraising on Monday and said it had enjoyed robust investor demand for a previously announced convertible loan note placing.

On 12 June, Belluscura announced a proposed placing of convertible loan notes. The company reports significant interest from both new and existing investors, with an update on final terms, including issue size, expected shortly.

In addition, Belluscura has successfully raised £300,000 from an investor through a subscription of new ordinary shares. This subscription was completed at 15p, representing a 7.7% discount to the closing mid-market price of 16.25 pence per share on 21 June.

The company plans to use the net proceeds from this share subscription for working capital purposes.

Last year, Belluscura recorded a step change in order intake and revenue generation after receiving approval for its oxygen concentrator units across Asia.

The funds raised from this round will be allocated to meeting these orders and supporting further revenue growth.

S&P 500 Weekly Outlook 24th June 2024

In our last note we remained cautious as the market looked vulnerable to some profit taking. This has not occurred in any scale, yet. Will this profit taking emerge or can this pace of buying continue?

We still stay skewed to the negative view, and can see the market dropping back to the previous upside resistance, now support, around 5,400 in the first instance, and then could slip down towards the previous resistance level, black line, currently around 5,150.

The Hindenburg Omen signal gained a lot of coverage this week as the S&P 500 is flashing up this signal which traditionally has helped to pick out tops in the market around 2-6 months before a 20-30% correction.

The signal essentially looks at the ratio of new 52 week highs and new 52 week lows, on the hypothesis that in a healthy positive market there should be a strong ratio of new weekly highs to lows. When the ratio of new highs to lows moves back towards parity, or even under, it signals that the market is pushing up to new highs only due to a few high profile names.

Which can be an early warning signal as then it only takes a market turn in a sector or two, or in just a few names, to pull the market lower. Currently this is the AI boom. Clearly AI will revolutionise the world at least as much as the internet has over the past 25 years. The issue is that, like the dotcom bubble of 2000, investors have been too quick to buy into any stock with any affiliation with AI. There will be a few huge winners with AI over the next decade. However the likelihood is that like the internet, this will be limited to a few huge winners, and not spread across the whole sector.

As a result the AI bubble could yet burst, and this would allow the Hindenburg omen to be proved correct in a few months time. Like last week, we are not calling the top of the market here, but we do feel that the underlying sentiment is one of greed at the moment, when this pivots to one more of fear there is now considerable downside.

So we would recommend a hold, take profits or even trading short position for the more active traders, as we wait to see how the market reacts when the heat starts to come out of the current sentiment.

THG – Is It Being Bailed Out By Mike Ashley’s Frasers Group Taking Out Coggles & Co?

Within the retail fashion sector, the buzz over the weekend was that Mike Ashley’s Frasers Group (LON:FRAS) was negotiating to relieve Matt Moulding’s THG (LON:THG) ‘empire’ of its Coggles retail operation.

Set up way back in 1974, Coggles today is a premium international fashion retailer home to over 200 men’s and women’s designer collections from established fashion houses, emerging designers and rare international labels, including Balenciaga, Bottega Veneta, Ganni, Gucci, Kenzo, Marc Jacobs, Karl Lagerfeld, Max Mara, Polo Ralph Lauren, Rains, Paul Smith, Thom Brown and Alexander Wang. 

It also sells a range of homeware and beauty branded products.

Husband’s Affair Was Just The Start

The company was started by Victoria Bage, who ran a stall in York market which proved such a big hit that she opened a store, one of the north’s first boutiques, two years later.

Bage, it is said, caught her husband having an affair with his secretary.

She promptly divorced him and named the store, situated in York, after the secretary ‘Sarah Coggles’ to remind him of the mistake he had made. 

Mark Bage, Victoria’s son, modernised the shop and launched an online store in 2006.

Enter Matt Moulding

However, the whole business was put into administration in 2013 – its physical stores were liquidated while The Hut Group acquired the Coggles online operation.

In early December 2017, the company opened a physical 4,000sq ft store in Alderley Edge, in Cheshire, marking its first offline offering since it had been forced to close the Coggles flagship in York, after the group fell into administration.

The new shop, a former bank, features preserved wood and marble decoration and two former vaults that have been converted into shoe and accessories showrooms.

It is situated in one of the most prestigious destinations in the north-west.

The loss-making THG has been selling off non-core assets in order for its management to focus upon its nutrition, beauty and digital, marketing and fulfilment businesses.

Frasers bought ProBikeKit from THG in May last year.

So, the market now questions whether THG making such a disposal as Coggles to Frasers a friendly buyer when funds are required – is it effectively a bailing out in times of need?

Today’s AGM

THG will be holding its AGM in Altrincham later today.

In the group’s AGM Trading Statement, the company has announced that it has agreed to sell its portfolio of luxury goods websites, including www.coggles.com to the Frasers Group.

Ingenuity will continue to support the brand portfolio across technology, digital marketing and fulfilment services post disposal.

From a standing start almost 11 years ago, THG’s luxury division grew to some £43m in sales and it reported a broadly break-even for 2023, despite a broader challenging luxury market.

Current Market Position

There are ‘short positions’ against 2% of the THG equity, with Marshall Wace, Wellington Management International and Qube Research & Technologies being the biggest players.

The shares, which were trading at 110.25p this time last year, are now fairly close to their 56.30p one-year low, are currently at 61.85p, valuing the whole group at £823m.

Three FTSE 350 dividend payers to ride out the election (Legal & General shares don’t make the cut)

The election shouldn’t bring too much in the way of excitement in equity markets. Everyone knows that – failing a monumental polling discrepancy that would render the entire industry not fit-for-service – Labour will be in power post 4th July. 

That said, such events have the potential for volatility, and a solid set of dividend payers can help smooth out any bumps in the road.

Legal & General shares would have historically given us a head start in compiling a selection of FTSE 350 dividend payers. However, its recent capital management targets involved reducing dividend growth to a meagre 2% in the coming years. The shares have a healthy yield, but stunting dividend growth makes the stock less attractive, and it doesn’t make the cut on this occasion. 

We explore three FTSE 350 dividend paying stocks that we feel offer not only healthy yields, but the opportunity for future dividend growth and capital appreciation.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

These three stocks also hold long-term potential and shouldn’t be viewed as a short-term trade.

NextEnergy Solar Fund

Yielding 10% and trading at a 29% discount to NAV, the NextEnergy Solar Fund Investment Trust should fare well in the coming weeks and beyond.

Over the past full-year period, the trust has expanded its portfolio of solar assets to 103 and increased installed capacity to over 1GW.

The big problem for the trust has been questions about the value of its portfolio of privately held solar assets during the higher interest rate environment. 

We’ve selected NESF, yet there are a whole host of trusts with portfolios of renewable infrastructure that are facing the same problem. 

The big attraction to the trust over its peers is its yield. High yields can sometimes be associated with distress. This simply isn’t the case with NESF. 

In its full-year results released this week, the trust outlined a dividend that is covered 1.3x and grew 11% in the last year. An 11% dividend hike is not a move made by a board concerned about being able to maintain payouts. 

The company has embarked on a capital management programme in the face of higher interest rates and has disposed of a number of assets, one of which provided a 100% valuation uplift on the balance sheet valuations. The proceeds of the capital recycling programme will be used to pay down short-term borrowings.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

A Labour government has also promised a big green agenda which will be generally supportive of the trust’s operations.

IG Group

IG Group provides tradeds with a trading venue for OTC derivatives, exchange-traded derivatives and stocks. It has global operations, trading under the brand IG as well as tastytrade in the US after acquiring the platform in 2021.

From a dividend perspective, IG has a 5.9% yield, which is covered 2.1x.

In recent years, the top line has grown steadily as the group wins new business and launches new offerings such as fully-managed smart portfolios and ISAs.

IG Group’s growth story is supported by solid fundamentals. In the third quarter ended 29 February, the number of new clients that traded for the first time increased to 18,000. This was higher than the previous quarter (16,600), and the same period a year ago (17,400). The key Active Clients metric for period was 266,800, an increase on the second quarter.

However, active clients are only one half of the story.

In times of volatility, IG’s account holders will have a greater propensity to place trades to take advantage of price fluctuations. A higher number of trades by its clients translates directly into higher revenue for IG. Thus, IG Group is a natural hedge against volatility.

In 2024 year-to-date, IG’s revenue is down 6% on the same period and the company has blamed ‘materially lower volatility’. Indeed, IG Group said the period year-to-date has seen the lowest volatility in the past five years.

Should financial market volatility heighten around the election, IG Group will be a beneficiary.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

AstraZeneca

AstraZeneca doesn’t pay a huge dividend. Its 2% yield isn’t anything to write home about. However, it has recently announced ambitious growth targets, which, if achieved, promise steady and measured dividend increases in the coming years.

In late May, the company set out plans to grow revenue to $80bn by 2023 as new blockbuster drugs are released to the market.

“In 2023 we delivered the ambitious $45 billion revenue goal set a decade ago,” said Pascal Soriot, Chief Executive Officer, AstraZeneca. “With the exciting growth of our innovative pipeline, which has the potential to transform millions of lives, we are now aiming for $80 billion by 2030.”

The company said they plan to ‘launch 20 new medicines by 2030, many with the potential to generate more than $5 billion’.

Should this goal be delivered – and there’s no reason to suggest it won’t – AstraZeneca’s current valuation is compelling.

AstraZeneca currently trades at 19x forward earnings. This may be considered a touch expensive compared to the benchmark, but this doesn’t take into consideration growth beyond next year.

The dividend was flat between 2022 and 2023 but the group increased payouts in 2024. The impact of capex and the pandemic slowed dividend hikes in recent year and investors will be encouraged to see the company return to the path of a dividend progression.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

Brokers generally have a favourable view of the stock with Berenberg recently upgrading their price target to 15,000p.

New AIM admission: AOTI Inc eyes $12bn market

Medical technology company AOTI Inc has developed products that help to heal wounds by focusing oxygen on chronic wounds. These can include diabetic foot ulcers and pressure ulcers. The company acquired a negative pressure wound therapy device.

Diabetes levels are increasing, and this will provide the core market. The estimated global market for the company’s technology is $12bn. That requires regulatory approvals in additional geographic markets.  

The board decided to come to AIM in June 2023. Existing shareholders sold 11.8 million shares in the placing. There were 22 trades dur...