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COMPANY SNAPSHOT: Nautical Petroleum, Xcite Energy, Kolar Gold, Regency Mines, Stratex, Advanced Computer Software

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This has been an eventful morning in the oil and gas sector with Cairn Energy (LON:CNE) making a £414 million bid for Nautical Petroleum (LON:NPE) and Xcite Energy (LON:XEL) announcing the completion of the drilling portion of the Phase 1A part of the Bentley oil field development project.

Under the terms of the offer, Nautical shareholders will receive 450 pence per share compared with Tuesday’s closing price of 297.75 pence per share.

The offer price represents a premium of 45.3 percent to the average closing price of 309.8 pence of Nautical over the three month period ending June 12.

The acquisition would increase Cairn’s interest in the Catcher, Burgman, Carnaby and Varadero oil discoveries by 15 percent to 30 percent, while also providing it with a 25 percent interest in the Kraken discovery and a six percent interest in the Mariner oil field.

Cairn will also secure a minimum interest of 50 percent in Block 9/1a and the associated Ketos prospect.

“This acquisition is another step towards building a balanced portfolio of transformational exploration, appraisal and development assets,” said chief executive of Cairn Simon Thomson.

“Specifically we will increase our equity position in the Catcher area, which contains several oil discoveries and follow-on prospectivity, and acquire a material stake in Kraken, another large, North Sea oil development project.

“In addition to these discoveries, this acquisition will add a number of North Sea exploration prospects to our existing 2012 and 2013 exploration programme in the UK and Norway.”

Fellow North Sea operating firm Xcite said the drilling part of the Phase 1A part of the Bentley oil field development project is now complete.

This morning it revealed that the second lateral well of the current programme, the 9/3b-7z well, has reached target depth of 9,646 feet.

It has a reservoir section of over 2,000 ft with 100 per cent net pay. 

Xcite says this lateral well hit the top reservoir at a higher point, at 3,609 ft, than previously encountered anywhere on the Bentley field to date. And this meant that it has an oil column depth of 121ft.

Kolar Gold (LON:KGLD) was under the spotlight in the mining sector  after unveiling a 220 percent increase in the resource estimate at the Mallappakonda deposit within its South Kolar licence area.

The maiden resource estimate stands at 3.46 million tonnes at an average grade of 1.76 grammes per tonne (g/t) of gold containing 195,000 ounces compared with the historic resource estimate of 61,527 ounces.

“There remains considerable scope to add additional ounces to the Mallappakonda deposit and resource drilling will continue as part of the Company's new 160 hole drill programme at South Kolar,” said chief operating officer of Kolar Richard Johnson.

“We look forward to providing investors with further operational updates once additional assay results are received.”

Regency Mines (LON:RGM) also released a resource update today.

The JORC standard compliant mineral resource estimate for the Mambare nickel laterite project in Papua New Guinea has been increased by 67 percent to 1.53 million tonnes of contained nickel.

The resource now stands at 162.5 million tonnes grading 0.94 percent nickel for 1.53 million tonnes of contained nickel.

The increase resulted from the inclusion of all 2008 drilling and 2011 ground-penetrating radar results.

The company has also identified significant tonnages of higher grade mineralisation within the total resource including 47 million tonnes at 1.23 percent nickel and 0.08 percent cobalt.

“These latest results are exciting,” said project manager of Mambare Ian Warden.

“Not only do they build the Mambare Nickel Project towards its potential to be a nickel laterite of world-class scale, the higher-grade zones identified have very positive implications for the economics of a future Mambare operation.”

In other news in the mining sector, Startex International (LON:STI) has secured approval for the environmental impact study for its Inlice project in Turkey, while Horizonte Minerals (LON:HZM) has raised £5.2 million via a share placing.

Stratex said consultancy GBM will now undertake a rapid review of feasibility study to finalise the conceptual design and provide updated project economics.

“This will also provide us with revised and updated project economics - a critical step prior to securing finance and commencing construction,” said chief executive of Stratex Bob Foster.

“Our preferred option will be to seek debt provision via Turkish and other financial institutions.”

At the Altintepe project in Turkey, infill drilling of the Camlik East zone for detailed resources modelling has now been completed with final assay results awaited.

Meanwhile, Horizonte has placed nearly 72 million shares at a price of 7.25 pence per share to raise £5.2 million before expenses.

Following the latest fundraising, Horizonte will have net cash of around £9 million, which is sufficient to advance its Araguaia nickel project through to the end of the pre-feasibility stage over the next 12 to 14 months.

The company remains on target to deliver the preliminary economic assessment by the end of the current quarter, which will be followed by an infill resource drilling programme in the second half combined with metallurgical pilot test work.

In the meantime, Orogen Gold (LON:ORE) revealed this morning it has completed a 55 per cent earn-in to the Deli Jovan gold exploration project in Serbia.

The miner sealed the deal with joint venture partner Reservoir Minerals (CVE:RMC) after spending a total of C$1.5 million in exploration at the project in 24 months.

If it spends a further C$2 million in exploration costs before the end of 2013, the company will increase its stake in Deli Jovan to 75 per cent as it enters phase II of the agreement.

In biotech, Xenetic Biosciences (LON:XEN) has decided to relocate its drug development operations to Massachusetts. This new facility is expected to be opened within the next few months.

The company is headquartered in London and has conducted all of its in-house optimisation and pre-clinical development work at its own laboratories.

Xenetic said that following the completion of a financing round in November last year it is now well-positioned to initiate a number of FDA/EMA clinical programs.

“With a focus on Orphan and Rare Disease drug development the Company believes that there is no region anywhere in the world that can currently compete with Massachusetts in the breadth of skills, experience and resources available to a company at this stage of its growth,” said chief executive of Xenetic Scott Maguire.

Elsewhere in the markets, IT group Advanced Computer Software Group (LON:ASW) said it had an excellent year despite a challenging trading environment.

The full year report showed that revenues rose to £98.2 million in the year to 29 February 2012 from £89.2 million in the previous year.

Pre-tax profits climbed to £6.4 million from £2.9 million and earnings per share jumped to 1.8 pence from 1.1 pence.

The increase in revenues came as mobile user licence orders trebled to 13,000 users, while the company also highlighted a strong contribution from cross-selling cloud solutions, including a £17 million contract with Northern Ireland Department of Health, Social Services and Public Safety.

“Our robust business model, which combines high recurring revenue with business-critical applications, has enabled us to maintain strong results in a challenging economic environment,” said chief executive of ASW Vin Murria.

“The group is trading well and is positioned for further growth in the year ahead, both organically and by acquisition.”

Finally, Lonrho (LON:LONR) is to rebrand its fast growing African airline business as FastJet and launch an expansion drive in conjunction with easyJet founder Sir Stelios Haji-Ioannou.

Lonrho Aviation will execute the deal through a reverse takeover of AIM-listed Rubicon (LON:RUBI), which will give the business a separate listing in London.

Rubicon will buy Lonrho Aviation for US$85.7 million in shares to give the Africa-focused conglomerate a majority 73.7 per cent stake including the 9.5 mln shares it already owns. 

 

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