Derek Pain: Nighthawk on the brink of swooping again

No Pain, No Gain

Nighthawk Energy could be on the verge of a remarkable comeback. The US-focused oil and gas group was once the star of the No Pain, No Gain portfolio. But its shares lost their exuberance. And to pile on the agony, a much-hyped stake sale was abruptly cancelled last month, sending the shares into freefall and leaving the group looking forlorn.

The shares are a long way from their 116p peak but, as I write, they are around 45p, giving the portfolio a sniff of a profit. My guess is the price has higher to fly. It nudged 60p in June when an Italian money group agreed to buy a 20 per cent interest in Nighthawk's flagship venture, the Jolly Ranch in Colorado.

But the Italians failed to deliver the promised cash and the deal had to be abandoned at the last minute, leaving David Bramhill, Nighthawk's managing director, red-faced.

It is a review of the likely oil reserves at the Jolly project that has provided the new impetus. According to Schlumberger, a formidable American oil services group, nearly 1.5 billion barrels of the black stuff are probably obtainable. The report prompted stockbroker Hanson Westhouse to lift net asset value from 102p a share to 268p – a staggering increase.

Nighthawk splits most of the Jolly acres with Running Foxes, a US group. The Schlumberger appraisal concentrated on a significant slice of the spread. It is rumoured that the entire Jolly field, mostly owned by the two partners, could contain as much as five billion barrels.

Hanson calculates that Nighthawk's oil share from the study area, assuming only 20 per cent recovery, is 146 million barrels, rising to 220 million from its entire Jolly pitch.

It's the equivalent of finding "a large North Sea or West African oilfield", observes analyst Peter Bassett. With other US fields – one of them should produce 23 million barrels, possibly 114 million – Nighthawk could have around 334 million barrels in place.

Bramhill believes the Jolly assessment should put Nighthawk "on the radar screens of major energy groups". Certainly he must, in retrospect, be delighted that the Italians failed to come up with the cash. With the new estimates – and the oil price now higher than when the deal was negotiated – he would, no doubt, have been accused of selling far too cheaply.

Its collection of US operations makes the group one of the more interesting plays in the oil sector. And there are no near-term funding requirements, although I would not be surprised if some projects, such as the Cisco Springs field, are eventually sold. Nighthawk has carved out an interesting niche for itself and, with corporate activity growing in the industry, could attract a takeover bid. There is also, I hear, a strong possibility that the group will lift its US profile by achieving a New York share listing within the next few weeks.

Elsewhere, shares of Printing.com, which mainly produces small items such as leaflets and business cards, are a little above the portfolio's buying price. Chairman George Hardie told shareholders that trading was being maintained, although promotional activities must be impacting on profit margins. Still, the group seems to be increasing its market share.

Julian Tolley, analyst at stockbroker Hoodless Brennan, has shaved his profit forecast to £1.9m and rates the shares a hold. If last year's dividend is held – and there is a good chance it will be – it should be around 10 per cent.

Another constituent, the Booker cash-and-carry chain, seems to be enjoying something approaching a spending spree from its 414,000 customers, largely corner shops, pubs and restaurants. Chief executive Charles Wilson reports sales in a 12-week period rose 7.8 per cent. The group moved from AIM to full listing at the start of this month.

Booker was recruited last summer at 24p a share. The shares are now around 35p, with sales by some directors, following the ending of a lock-in, having little impact.

Finally, shares of the portfolio's newest recruit, Clarity Commerce Solutions, have, seemingly unnoticed by the wider investment community, made heady progress. The price brushed 50p, against around 30p when results appeared last month. The portfolio alighted on the shares at 29.5p in April.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Financial Controller

    £45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Recruitment Genius: Sales Adviser - OTE £24,500

    £22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

    Recruitment Genius: Business Development Executive / Sales - OTE £40,000

    £18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

    Day In a Page

    Mullah Omar, creator of the Taliban, is dead... for the fourth time

    Mullah Omar, creator of the Taliban, is dead... again

    I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
    Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

    Margaret Attwood on climate change

    The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
    New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

    New Dr Seuss manuscript discovered

    What Pet Should I Get? goes on sale this week
    Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

    The cartoon hedgehog leading the way into a whole new reality

    Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
    Ants have unique ability to switch between individual and collective action, says study

    Secrets of ants' teamwork revealed

    The insects have an almost unique ability to switch between individual and collective action
    Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

    Donovan marks his 50th year in folk

    The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
    Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

    Simulator recreates thrill of F1 circuit

    Rory Buckeridge gets behind the wheel and explains how it works
    Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

    Twitter accused of 'Facebookisation'

    Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
    Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

    Jane Birkin asks Hermès to rename bag

    The star was shocked by a Peta investigation into the exotic skins trade
    10 best waterproof mascaras

    Whatever the weather: 10 best waterproof mascaras

    We found lash-enhancing beauties that won’t budge no matter what you throw at them
    Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

    Diego Costa: I go to war. You come with me...

    Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
    Ashes 2015: England show the mettle to strike back hard in third Test

    England show the mettle to strike back hard in third Test

    The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
    Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

    Charley Hull: 'I know I'm a good golfer but I'm also just a person'

    British teen keeps her feet on ground ahead of Women's Open
    Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

    Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

    Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
    Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

    Our choice is years of Tory rule under Corbyn or a return to a Labour government

    Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'