Rockhopper Exploration continued its recent recovery on Monday after the company said its discovery off the coast of the Falkland Islands was likely to contain more oil than previously thought.
Shares in the explorer rose 8.8 per cent to 237p after Rockhopper said new seismic data showed its Sea Lion prospect was bigger than expected and raised its estimates for oil in place.
Canaccord Genuity responded by reiterating its “buy” recommendation and increasing its target price from 593p to 871p.
“It’s low-case oil-in-place estimate has increased from 516m to 608m,” said the broker. “Using the lower end of the group’s anticipated recovery rate of 30-40 per cent, Rockhopper’s estimate of low-case recoverable resources has increased by approximately 18 per cent from 155m to 182m.
“The resource update is very encouraging and we expect the market to react positively to the materially increased scope of the Sea Lion project.”
Desire Petroleum, another Falklands explorer, also responded positively to the news.
Its shares added 13.2 per cent to 19¼p on news that the Sea Lion reservoir might extend into one of its prospects.
“However, since Desire does not have access to all the data upon which Rockhopper’s evaluation is based, in particular the 14/10-6 well data, Desire is unable to confirm Rockhopper’s interpretation at this stage,” the company cautioned.
Pendragon, the car dealer, was in focus ahead of the closing date for its £75m rights issue.
Traders are not expecting shareholders to take up all of their rights and reckon underwriters may get left with around 30 per cent of the issue.
The closing date for subscriptions is Tuesday. Pendragon closed up 2.5 per cent to 10.1p.
Aim-listed Bezant Resources advanced 30.1 per cent to 37¾p on news that it had received offers for its flagship Mankayan copper and gold project in the Philippines.
“The company’s preferred acquirer is currently at an advanced stage in its comprehensive due diligence exercise and commercial negotiations with the board,” Bezant said.
Chariot Oil & Gas climbed 20.5 per cent to 147p, a rise traders pinned on the clearance of a stock overhang.
Last week, Citigroup revealed that it no longer had a declared interest in the explorer, which is searching for oil off the coast of Namibia.
Berkeley Mineral Resources added 4.9 per cent to 3.2p after several directors declared the purchase of stock.
Masoud Alikhani, chairman, was among the buyers, picking up 3.3m shares at a price of 2.87p.
Avocet Mining moved up 6.8 per cent to 245p following what analysts described as an “excellent” drilling update from its Inata project, Burkina Faso, west Africa.
“The company also announced its decision to increase plant capacity to produce 235,000 ounces annually from 2013 onwards.” said Collins Stewart. “This shows the confidence that Avocet has in the reserve expansion potential at Inata. We will leave our valuation unchanged for now, until the new larger reserve is announced.”
There was heavy trading in Sepura, which makes specialist mobile phones and wireless communications networks for public safety networks such as the police.
A block of 6.38m shares was traded at 51p, according to traders. Sepura rose 2 per cent to 51½p.
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