No Pain, No Gain: A good chance to extract a profit from oil and gas
Saturday 26 January 2008
Nighthawk Energy, the No Pain, No Gain portfolio's only explorer, has helped to keep the home fires burning since it was recruited last summer. At a time when many micro-caps have suffered savage punishment, its shares have moved ahead, standing near 50p against a 44p-buying price.
Not a spectacular performance, I know. But at least the shares have headed in the right direction. And I remain convinced they have further to go. Some researchers think the price should be nearer 100p. Certainly many City institutions, despite the stock-market turmoil, have a soft spot for them. It is significant that when smallcaps are more likely to be ostracised than offered support, the oil and gas group has achieved the distinction of actually raising new cash in the stock market.
Its stockbroker, Hanson Westhouse, apparently had no trouble pulling in £14m by placing shares at 46p, a modest discount considering the present state of play. What's more, the cash call was, I hear, oversubscribed, with some institutions appearing on the share register for the first time.
Nighthawk, concentrating on developments in the US, only arrived on the stock market a year ago. It was floated at 25p a share. Since then it has made rapid headway, increasing its exploration spread quite dramatically. The £14m cash injection will be used largely to carry out exploration at what is known as the Jolly Roger site in Colorado. Nighthawk works hand-in-hand with a US oil group, Running Foxes. The two share ownership of the 140,000 acres; RF is the operator. David Bramhill, the chief executive, reckons Jolly Roger has the potential to "transform the company into a mid-tier hydrocarbon company".
After the placing, Nighthawk is capitalised at around £100m. With a midcap group commanding a £1bn or so valuation, there is still a long way to go.
Besides its Jolly Roger investment, the group has other ventures including the Cisco Springs development in Utah, which is already producing and is thought to harbour vast quantities of gas.
The group's fields are mainly former production areas, abandoned a few decades ago when low prices and difficult terrain made them uneconomical. Today's higher energy prices and improved technology, is offering a new lease of life, allowing once again the profitable extraction of oil and gas.
Nighthawk has the added advantage, unlike many other explorers, of operating in one of the most stable areas of the world. There are hopes it could move into profit in the next year or so.
Another portfolio microcap, Private & Commercial Finance, has also made headway. It is, however, a very different creation to Nighthawk. A hire-purchase group it is, perhaps somewhat surprisingly, prospering in the sub-prime credit crunch. The group has disclosed that it enjoyed a record run in November with fourth-quarter trading up 86 per cent. A new bank supporter has provided an extra £20m of back up finance.
Last month, after announcing buoyant trading, PCF shares jumped to 24p. Then a sudden bout of selling pushed them to 18p. They are now, following the latest bulletin, 23p. Perhaps this time round they will manage to hold their improved level, despite the stock-market mayhem. The portfolio paid 19.5p
Finally, an unpleasant taste has emerged at the Food & Drink Group, the constituent running the Jamies and Henry J Bean bars. For the second time in little more than a month it has put back its results announcement. Whilst the first postponement created hardly a ripple, the second devastated the shares, more than halving their value. The crash was not surprising. The first delay was accompanied by a statement that the figures would be in line with stock market expectations – a profit of around £900,000 – but the second contained the sobering revelation that the anticipated £900,000 had declined to £600,000.
Not surprisingly there are worries about just what chairman Stephen Thomas, who also runs the Luminar night clubs chain, will say when he finally gets round to reporting figures on Monday.
The portfolio acquired FDG at 241.5p a share. They topped 280p before slipping lower as worries about consumer spending increased. Before the profit shock the price was around 215p. It is, as I write, a dismal 79.5p. Clearly, if there is not a reasonable explanation, I will give the shares the old heave-ho.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC
- 2 Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
- 3 London restaurant 34 creates champagne glass modelled on Kate Moss’ left breast
- 4 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 5 James Foley beheading: Fox news presenter Megyn Kelly annoyed by Ferguson update during broadcast about murdered journalist
Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Bin bag full of cats' heads discovered near Manchester's Curry Mile
Disgusting, frustrating, but intriguing: how the country really feels about its politicians
iJobs Money & Business
Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...
Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...
£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...
£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony