Market Report: Hopes of Borders oil find lifts Falklands explorers
As foreign secretary William Hague condemned Argentina's dramatic seizure of oil assets that were located in its land but controlled by Spain's Repsol, British hydrocarbon companies operating in the waters around the disputed territory of the Falkland Islands enjoyed a splendid day.
In contrast to Repsol's plummeting share price, UK oil firm Borders & Southern Petroleum soared by an astonishing 55 per cent yesterday, shrugging off Argentina's claim to sovereignty over the Falklands and its threat to sue any company operating in the vicinity.
Borders & Southern's share jump (by 38.5p to 108p) came amid growing excitement that the results of exploratory drilling around the Falklands would determine commercial quantities of oil. This would put Borders in an exclusive club, since only Rockhopper has yet found commercial quantities of oil, after striking black gold at its Sea Lion field last year.
"The results are nearly on us. There's obviously nothing out at the moment but I guess it's just speculation as to a positive result," said one analyst.
The positive sentiment Borders engendered around Falklands oil contributed to meaty share price rises for rival explorers in the region, with Falkland Oil and Gas jumping by 24.25p, or 35 per cent, to 93p, and Desire Petroleum adding 1.25p to close at 29.25p.
In contrast to Argentinian land, upon which President Cristina can renationalise any foreign-owned assets she likes, Buenos Aires has no legal jurisdiction over the Falklands. Consequently, although Argentina is ratcheting up its campaign to extend its oil empire by grabbing the Repsol assets, investors in operators around the islands seem unperturbed by the country's threats of legal action.
Still on resources, Fresnillo turned in a glistening performance yesterday, dragging other miners up with it, jumping 3.24 per cent as the gold and silver producer delivered an expectation-busting first-quarter performance.
Fresnillo's shares increased by 51p to 1,624p, as the miner hiked gold production by 26.3 per cent in the first three months of 2012 to 121,792 ounces.
FTSE 100-listed, Mexico-based Fresnillo has been working hard to boost production to take advantage of the historically high gold price, which has risen steadily for most of the past decade and is expected to keep growing this year, after falling from its September record in the final months of 2011.
The company, which also reported an expectation-meeting 3.5 per cent decline in first-quarter silver production, said its gold output was primarily boosted by a 42 per cent jump in production at its eponymous Fresnillo mine in Mexico.
The mining sector was given a further boost when BHP Billiton reported a better-than-expected 8 per cent drop in iron ore output in the three months to the end of March.
This was largely due to interruptions to production as a result of a stormier-than-usual cyclone season and was in contrast to rival Rio Tinto's disappointing statement to the market on Tuesday, which reported a larger-than-expected dip of 11 per cent in iron ore shipments.
BHP's encouraging iron ore performance was complemented by a 35 per cent surge in petroleum "liquids" production from its US onshore gas business, which together outweighed disappointing coking coal production and saw the miner's shares leap up by 16.5p and end the day at 1,943p.
The strong showing from the resources companies helped to balance out declines elsewhere in the FTSE 100, although the blue-chip index still dipped slightly, falling 21.66 points to end the day at 5745.29.
However, it wasn't such a good session for interactive whiteboard maker Promethean World, which saw its shares tumble by 15.75p, or a hefty 21.5 per cent, to 57.5p, as challenging conditions, particularly in North America, dragged down the company's revenues by 14 per cent during the first quarter.
Furthermore, the FTSE Small cap education company, which is hobbled by the fact that 95 per cent of its businesses comes from governments around the world, warned that the market would remain challenging in the US and Europe.
This prompted Peel Hunt to downgrade its recommendation on the stock from "buy" to "hold".
Promethean's woes also pushed down shares of education specialist Pearson, which fell by 14.0p, or 1.25 per cent, to close at 1,119p.
Liberum Capital's analyst Ian Whittaker said: "There is a negative read across from the interim management statement from Promethean World, which is a global education interactive learning technology company that works with a number of the educational publishers."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...