Trading the stockmarket (NO Referrals)

Oil minnow Rockhopper Exploration (RKH) today said it was looking to raise £48.5 million after striking larger-than-expected reserves of oil off the Falkland Islands last month.

The AIM-listed group is planning to issue more than 17 million shares in a fully underwritten placing at 290p each. This is a 3.5% discount to yesterday's closing price of 290.25p.

The money raised will allow it to complete its current drilling programme in the North Falkland Basin, in particular to flow test the group's Sea Lion exploration well and pay for other operational costs.

David Hart, analyst at Westhouse Securities, said: "Following Rockhopper's exploration success in the Falklands, additional fund raising was very much expected. Further funds and/or partners will clearly be required as work progresses in the region."

Richard Rose, analyst at Oriel, added: "This placing was not a surprise and leaves the company well capitalised in the near-term, with only modest dilution to the potential upside from Sea Lion and the company's other prospects."

However, he believes that the amount being raised "will not be enough to cover further appraisal wells on Sea Lion".

"We would therefore expect an additional raising later in the year once we have clarity on the Sea Lion flow-test and in light of the further exploration drilling planned on both Rockhopper and Desire's acreage where the company has a 7.5% interest," he added.

Rockhopper's shares have shot up in the past 110% in the last month since it struck black gold in the Falkland Islands.

On Friday, the group said it had increased the recoverable resources from 170 million barrels of oil (mmbbls) to 242 mmbbls with "significant upside potential".

Samples taken from its wholly-owned Sea Lion 14/10-2 oil discovery on the North Falkland Basin, confirmed the presence of medium gravity crude oil, prompting the board to announce it had discovered a "new play fairway".

The well was drilled to a depth of 2,744 metres during April and May of this year and encountered a total net pay of 53 metres across seven identified pay zones.

Shareholders writing on the Interactive Investor Rockhopper discussion board were largely upbeat about the share placing.

Oildrum says: "Let's not forget, the £48 million placing is for well testing. If the well test proves up just 10 million extra barrels (very, very likely), that alone will cover the cost of the placing and add value to the shares."

HollandNHolland says: "The added value of what the extra cash will bring is higher than the money raised. Do the maths... they're investing more money to get more value for shareholders."
Click to expand...
 
I know bit of a sore one for me today. Not too worried as I'm going to hold until the next well is finished.The geology looks good on Rachel, almost exactly the same as Sea Lion and not too far from it.

The SP is creeping back a little now 93p.

I think most of the SP drop has been caused by day traders who arent interested in holding long term.
 
Aye, DES has been a strange one, presumably the lack of any real info from the AGM is spooking people out. I think I'll hold until september when they get the drilling rig though, there's real promise. I'm surprised BP took such a tumble though, £4 a share is looking tempting for the long term, but I don't know if tying up the sort of money that you'd need to invest for a decent return could be put somewhere else instead.
 
Afternoon guys,

I have an ISA account which I opened this year, I have a little 'slush fund' with a few 100 in it for emergencys, then I have about 800-1000 just 'lying around' in a low interest bank account not really doing anything, I want to 'invest' it somehow.

Do you reccomened doing it with stocks?

I know as much about stocks as I do about rocket science (..which isn't a great deal :p)

I'm looking more towards short term gains as i am VERY impatiant :)
 
You will be very lucky to pick something with strong short term gains whilst only stick 1k in, you really need to know the market or have some really really solid connections and info to get ontop of the good shares at a low price before they start to go up to levels which would give you a good return.

You need to play the longer game imho :)
 
I know its a low amount, but its all the spare money I have that really, needs to doing something other than earning me a penny in the bank!

Long term then, what do you suggest?
 
Well BP has closed nice and low, DES and RKH are down.

Remeber you have around £6 - £12 per buy and selling action, so you need to make more than £12 - £24 per punt to make any sort of profit.

Edit, sorry RKH are up on yesterday but down on a previous high point.
 
I'm guessing you buy/sell online instantly? Which website do you use.

Every time I buy any shares/sell anyshares you pay the website (broker?) a set amound (around £12 like you said) correct?
 
You must log in or register to reply here.
Back
Top Bottom