DailyTrading

Did a bit of portfolio clearing this week and feel better for it. – Three sales, ATC, VOG and ALO.

I have been watching Victoria Oil and Gas and Alecto Energy sit at around their current price for some time now and I felt it was time to move the money elsewhere. 13 and 14 % profit banked for the website.

Unfortunately this week’s small gains were trounced by my biggest loss for the portfolio so far. ATC Atlantic Coal – It broke all of my investing rules falling past my usual 20% bail out and losing my 34% which equated to nearly £600 loss. The drop was fuelled by the BOD announcing that was planning to raise 12m by a placing of 1.6 billion new shares. This would be fine if the share were offered to all share holders but ATC have decided be selective in whom they offer the new shares to…

Atlantic quote – “There is an opportunity to raise funds from a small number of institutional and other investors at the present time, including the Company’s principal investor, the Blackrock Smaller Companies Fund. The Directors have therefore decided to effect the fundraising by way of the Placing…rather than by offering all shareholders the opportunity to acquire further shares. The Directors believe that the additional cost and delay incurred in connection with any such offer would not have been in the best interests of the Company”.

A placing that is good for some and not others is just not fair play. This sent the price back to 0.85p and although I expect that this money will be put to good use, with shares being issues at 0.75p it could take some time before this can bounce back.

The cash from this week’s sale was re-invested in Ascent resources. AST have been on my watch list and in my largest running profit in my spread bet account for some time now. They have been trickling up since mid last year. Yesterdays RNS has somewhat de-risked. The following quote particularly grabbed my attention

“Ascent’s Managing Director, Jeremy Eng commented, “The results from the Pg-11 appraisal well, which reached its planned depth of 3,050m last week, have exceeded our expectations.  These results substantially de-risk the Project and underpin its commercial potential.  Gas was logged in all six reservoir intervals and as an added bonus gas is present in the unexploited and apparently naturally fractured Lower Miocene Karpatian reservoir, which we hope will contribute to an increase in the current P50 estimate of gas-in-place.”

Surprisingly, SP has dropped back slightly today but if/when the MD’s comments are realised and flow rates are commercial this will go crazy. I am looking forward to the next RNS; hopefully they won’t keep us hanging for too long!
Good luck all.

I have been quite content with the portfolio recently, hence the lack of changes. Last year I made a few sales on what I considered highs with intention on buying back in after a drop. This strategy worked well on a number of occasions but having looked at the figures and taking into consideration trading costs I would have done equally well just holding tight. This year, when in doubt I intend to hold. I am aware that this as it makes for a much less interesting website so from now on a intend to cover all of my shares and not just those covered in the trades table. – The original portfolio funded by the original 10k will continue to be reported on Wednesdays!

I am already starting to doubt my evolved strategy. If you take GKP for example. – Today the price rocketed from about 170p to 200p on news that the Iraqi goverment are to pass oil and gas law to enable exports… Last year I would probably have sold on this news and taken a nice £200 profit for the website… time will tell.

Early last week I decided to sell my Centamin shares. I have lost a little confidence in them lately. I chose to sell , partly due to the the uncertainty in Egypt, partly due to uncertainty about gold but also to provide some funds to get into BP. (British Petroleum). I really like idea of their new exploration strategy and you know they say… “It not what you know it’s who you know”. there is no doubt that they will be reporting massive profits next year and I cannot see the opportunity to buy in at less than £5 being around for long.

Last week I also decided to sell off KEFI minerals and Ortac both of which were moving in the wrong direction. KEFI minerals in-particular still looks to have so much potential but are waiting on 21 explorations licences (ELA’s). I am in no doubt KEFI will bounce back but I have no idea how long it will take to get these licences – it could be months… I used the funds to get into Cadogan (CAD). Up 10% this week!

I will publish all my holdings of the next few weeks and will try to publish my buys and sells on a fairly regular basis! – Wednesdays will remain just for the Website portfolio.

Good luck all.

Doug

Has anyone else had a particularly bad week?

The portfolio is down 5% over the last week. I suppose that it’s almost inevitable to see some kind of retrace after the ramp up to the new year… Will  I dare to sell all my shares in the first week of February next year? – Probably not.

Thanks to the person who pointed out my mistake of buying Ortac yesterday… They could have been had for 1.8p today! I still think they are a good buy and for now I am holding tight!

It’s Wednesday so a quick run over the changes to the portfolio. Not a huge amount this week;

Firstly, Selling XEL to fund more Atlantic coal shares at 1.1p looks to have been a good decision. It allowed me to average down from my original buy price and I am now showing a small profit.

The remainder of the XEL cash was put into GKP. This was not an easy decision but I already have a significant holding of XEL elsewhere at current prices Gulf Keystone seems to be good value in terms of risk/reward…

Recent buy Atlantic coal (ATC.L) is hovering around the 1.2p mark. Some big buys have come in this week, with BlackRock increasing their holdings to over 9%. News expected soon about the delivery of the Tonka trucks.

It’s going to be an interesting couple of weeks. A number of companies with reports and news due early February so we can expect some disruption! I am very aware that commodity prices cannot rise like they have over the last few months forever so I am not expecting gains quite like over the last 6 months! That said – a number of large investment banking firms are predicting substantial growth in commodities this year so with the right shares we could have another good year!

Good luck all,

Keep me updated, websitemail AT dailytrading.co.uk – or use the comments system!

Doug

I was doing my usual rounds this morning and came across this excellent post by “Fundfemale” on the “iii” bulletin boards. She kindly gave me permission to post it. It really summarises nicely why I have confidence in BLVN. – Have a read…

“Straight off the blocks with recognition and accolades, Telegraph recommendation for 2011, Barclays Capital to overweight, broker upgrades, on the list of Nomura most likely companies to be taken over…

Current market cap 713.57m GBP c 220mUS/137GBP cash = approx enterprise value so an enterprise value of just 576.57mGBP.

NB.We need to be careful, ladies and gentlemen(!), let us support our share price – we would not want someone buying them ALL up at that price, would we??!

So why is our share price so neurotic? Not out of touch with reality, but is excessively anxious and tense for sure…

Fox Davies articulated a guess re. our last rns: “This is a preliminary announcement and when the evaluation work has been completed down to the current TD, the Company intends to deepen the well to test additional objectives that have been identified and to ascertain the presence of potentially deeper hydrocarbon reservoirs, IN PARTICULAR OIL.

Bowleven has provided a revised resources estimate for the Lower Omnicron, with a mean estimate up from 190mmbbl to 217mmbbl but has not provided any resources estimate for the new discoveries in light of the evaluation work that remains to be done.

The stock price reaction this morning accounts for the fact that the portion of the Epsilon complex that has been penetrated has confirmed gas/condensate rather than oil and the uncertainty regarding the potential size of the discovery. We believe that (i) even in that case a higher share price can be justified and (ii) the Company is well funded to pursue similar exploration targets in the permit”.

Recommendation BUY – price target 450p – but a higher share price target can be justified one the potential of the cretaceous discovery is clearer.
Unrisked potential previously quoted by FD c. 1800p.

The Etinde story so far:

A number of discoveries made in MLHP-7, first of all IE by Total in 1981 followed by a number of successful wells by Bowleven subsequently.

String of exploration successes on the IE-1, ID-1 and IF-1 wells. A few years ago, BLVN shares reached above 400p just before the 2008 financial meltdown and performed in-line with the AIM Oil&Gas index.

IE-3 2010:
Measured flow rates per interval ranged from 845 to 11,778 boepd with a cumulative maximum rate of 14,576 bpd of liquids and in excess of 50 mmscfd of gas (total 22,909 boepd). Strong development/appraisal partner in Vitol.

Sapele-1 (MLHP-5):

Deep Omicron Bowleven’s (as operator) in-place volumetrics on a P90 to P10 range have been revised upwards to 65 to 430 mmbbls (updated mean 217 mmbbls). These numbers are subject to ongoing revision following further evaluation and additional appraisal drilling. Due to the stratigraphic nature of the Omicron discoveries, further appraisal will be required and is being planned.

Cross-cut event: Gross hydrocarbon interval of approximately 18 metres provisional net pay is estimated to be approximately 4 metres.

Epsilon Complex: Discovery. The well has intersected a log evaluated gross hydrocarbon interval of approximately 9 metres in moderate to good quality reservoir sands. The Cretaceous net pay encountered TO DATE is estimated to be approximately 4 metres.

We are in the process of drilling into unknown cretaceous Doula Basin potential right now. News of “the new” Sapele-1 TD should be in a few days/weeks.

Quote from last RNS:
“A principal objective of the Sapele-1 well was to prove the concept of the Cretaceous play offshore Douala Basin. The well has now confirmed the presence of reservoir a hydrocarbons in the Cretaceous, offshore Douala Basin, and as a result extends the Cretaceous play fairway significantly offshore”.

I have no doubt that the Etinde Permit IS ALREADY (and will become more of) a very DESIRABLE piece of Hydro-carbon real estate.

As exciting as all this waiting for more news on Sapele-1 is; EQUALLY EXCITING is the forward planning of exploration and appraisal. With 220mUS to spend and balancing prudent appraisal with outrageous wildcatting – we could afford and have time for maybe, 4 or 5 wells on in 2010. Who knows where that will take us.

Cheer up Bowleven, be confident.

Maybe Bowleven just needs a bit of retail therapy, a nice new of pair of rigs maybe ??

Very happily invested here, FF”

Please remember that although I will do my best, I cannot guarantee that any info given on this site is accurate and my opinions should not be taken as advice.

Next weekly update will be on Wednesday – Good luck all. As usual, keen to hear your thoughts – Use the comments system or email me at websitemail AT dailytrading.co.uk

DT.