Derek Pain: Nighthawk on the brink of swooping again
No Pain, No Gain
Saturday 25 July 2009
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.
Bargain Hunter: Comparethemarket.com launches two-for-one cinema tickets offer
Help to Buy Isa Q&A: Are they real help for first-time buyers or simply a vote-winner for the 2020 election?
You'll need £220,000 for a minimum wage in your retirement
Pension freedom: Steve Webb answers your questions on the big shake-up
Bank-beating exchange rates on your international payments
- 1 Germanwings crash: Police make 'significant discovery' at home of co-pilot Andreas Lubitz
- 2 Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
- 3 Zayn Malik already working on solo material, just days after quitting One Direction
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash live: Andreas Guenter Lubitz intentionally crashed flight 9525 into the Alps in act of mass murder and suicide – latest
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...
Day In a Page
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station