Edison Investment Research

Sector commentary

Oil & Gas

13/02/2012
Macro Outlook - Diverging Brent and WTI price trends
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Oil markets have been dominated recently by two issues, EU sanctions on Iran and surging North American supply. The upshot has not only been diverging WTI and Brent prices but also the dramatic emergence of wide regional light oil spreads in North America. Near term, at least, we expect international prices to continue to be buoyed by the Iranian issue while WTI and other US light grades languish under the weight of rising supply.

Companies mentioned
Show companies...Shell, Chesapeake

Oil & Gas

10/02/2012
Seismic reflections: Italian drilling ban about turn?
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Recent optimism among oil and gas companies over easing of a potential near-shore exploration drilling ban in Italy have been dashed. In a possible link to the sinking of the Costa Concordia, the country appears to have stepped back from a decree to its Environmental Code potentially relaxing the ban. As the rest of the world, including BP, moves on from Macondo, companies with near-shore Italian exploration targets continue to suffer drag from this ambiguous legislation. However, investors should note some smart operators who are limiting the impact of the ban through boundary changes and portfolio plays.

Companies mentioned
Nighthawk Energy , See more..., Europa Oil and Gas, BPC Limited, Gulf Keystone Petroleum, Amerisur Resources

Mining

03/02/2012
Indaba special, 2012
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Welcome to our special Indaba edition of Edison Insight, with profiles on our mining companies and a sector focus piece by Charles Gibson. In the last year, our mining coverage has increased dramatically. The team is led by Charles Gibson, who is supported by a team of seven other analysts. Today the team covers 66 companies, 62 of which are corporate clients of Edison. Our clients range from well-established FTSE 100 companies to junior explorers on AIM. Our approach is global and we write on companies on several different exchanges, including the TSX, ASX and JSE. Over the last year our research has been read by over 3,500 unique institutional investors.

Companies mentioned
Zanaga Iron Ore Company , South American Silver Corp , Minera IRL , Aureus Mining , Frontline Gold , Yukon-Nevada Gold , Afferro Mining , Central Asia Metals , Universal Coal , Caledonia Mining , Regency Mines , Wits Gold , Cluff Gold , Gunson Resources , African Barrick Gold , Gemfields , Avnel Gold Mining , Pan African Resources , Amur Minerals Corporation , Continental Coal , Sumatra Copper & Gold , African Eagle Resources , Kopy Goldfields , Bellzone Mining , Arian Silver , Alkane Resources , Baobab Resources , Ariana Resources , Allied Gold Mining , Sirius Minerals , Goldplat , Red Rock Resources , Bezant Resources , All Star Minerals , Anglesey Mining , Aurizon Mines , Eastern Platinum , Gold One , Petropavlovsk , Ferrexpo , Coal of Africa , Aquarius Platinum , Oracle Coalfields , Nkwe Platinum , Hambledon Mining , MDM Engineering Group , EMED Mining

Oil & Gas

27/01/2012
Seismic reflections: Gas to liquids could gain traction
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The economics of gas-to-liquids (GTL) plants is looking increasingly interesting, driven by the widening gap between oil and natural gas prices, particularly in North America. Currently, on a heat-equivalent basis, WTI is selling for 7x Henry Hub against 2x as recently as 2008. GTL facilities are, of course, costly and the process is energy intensive but at anything like current US oil and gas prices, GTL projects are arguably viable. Interestingly, Chesapeake, the second-largest US gas producer, believes GTL could become a reality in the US later this decade.

Companies mentioned

Financials

13/01/2012
Investment Trusts Quarterly: Growth and income
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The Fed has advised that it plans to keep short-term interest rates close to zero until at least mid-2013, if US economic growth remains weak. The eurozone crisis and faltering UK growth suggests that the same applies here. The substantial growth in alternative asset classes offering attractive yields, such as infrastructure and floating rate debt, illustrates investors’ demand for income that limits or diversifies risk and offers some protection against inflation. Investment trusts with traditional equity income mandates are also in demand and are still trading at historically tight levels. Many are trading at premiums to their NAVs, despite recent volatility in equity markets.

Companies mentioned
Carador Income Fund , Geiger Counter Limited , Martin Currie Global Portfolio Trust , Scottish Oriental Smaller Companies Trust , HarbourVest Senior Loans Europe , Henderson International Income Trust , Greenwich Loan Income Fund , New City Energy Limited , Finsbury Growth & Income Trust , Securities Trust of Scotland , Acencia Debt Strategies Limited , International Biotechnology Trust , European Assets Trust , RENN Universal Growth Investment Trust , City Natural Resources High Yield Trust , Oakley Capital Investments Limited , The Biotech Growth Trust , Henderson Fledgling Trust , Worldwide Healthcare Trust , The Merchants Trust , Aberdeen New Thai Investment Trust

Oil & Gas

13/01/2012
Seismic reflections: Funding troubles, M&A bubbles
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Many junior developers have the assets to make the leap to full-cycle E&P with commercial resources and experienced management ready to fast track discoveries into production. However, with debt funding elusive and equity prohibitively expensive many companies are struggling to fund their developments. To overcome this some are turning to alternative options such as SEDA facilities while a more diverse portfolio allows others, such as Faroe Petroleum, to swap discoveries for production that can be leveraged for debt. But if juniors do not secure funding, share prices are likely to continue to underperform and we may see them becoming takeover targets for mid-sized cash-rich players looking to buy cheap oil in the ground.

Companies mentioned
DEO Petroleum , Range Resources , See more..., GULF KEYSTONE PETROLEUM, AMERISUR RESOURCES, ROXI PETROLEUM

Oil & Gas

16/12/2011
Macro Outlook - Price weakness on the cards
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Oil prices have been bid higher since the early October lows by concerns about possible supply interruptions and falling US inventories. Major supply interruptions, including an EU embargo on Iranian imports, however, are very unlikely while the drawdown in US inventories is from a high base. If supply fears prove grossly exaggerated, as we suspect, and the European debt crisis persists, as seems likely, a renewed period of price weakness is on the cards.

Companies mentioned
Show companies...Shell, Chesapeake

Oil & Gas

09/12/2011
Seismic reflections: Listening out for the Falklands jungle drums
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Interest in Falklands oil exploration has dwindled during 2011 as investors limit exposure to the frontier region. However, with Rockhopper nearing the end of its extended Sea Lion appraisal campaign, a second discovery having been confirmed in the shape of Casper, and most critically the Leiv Eiriksson drilling rig coming over the horizon to start drilling in the South Falklands Basin, we expect interest to pick up significantly in the new year. Enthusiasm may not reach the peaks of 2010’s hysteria, but the region continues to offer some of the cheapest proven oil in the ground along with excellent upside for the frontier exploration investor.

Companies mentioned
Rockhopper Exploration , See more..., Desire Petroleum, Argos Resources

Oil & Gas

25/11/2011
Seismic reflections: The emerging Niobrara shale play
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More evidence has emerged concerning the prospectivity of the US Great Plains shale plays. The latest example concerns Anadarko’s announcement that it is confident that its Niobrara play in the Denver basin has a net resource potential of up to 1.5bnboe. In all probability the Niobrara play is emerging as the next major Great Plains shale play. The industry view that shale plays will boost US oil production by 1.5-2.0mmb/d by mid decade is looking increasingly plausible. US oil production could easily exceed the 1970 all-time high of 9.6mmb/d this decade.

Companies mentioned
Show companies...Anadarko, Amerisur Resources, Desire Petroleum, Petro Matad, Zhaikmunai LP, Serica Energy

Oil & Gas

11/11/2011
Seismic reflections: Confirmation of the Neuquen shale play
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Repsol YPF’s recent announcement of a huge discovery at Loma de la Lata in the Argentine province of Neuquen has confirmed the Neuquen basin as a major new shale play. Neuquen, indeed, is rapidly emerging as the first major shale play outside North America. Significantly, reserves of 927mmboe relate only to a very small part of the basin (428km2). Repsol YPF is expected to announce further news on Neuquen’s reserves very shortly that could double the initial estimate. The news from Argentina is highly positive for both the domestic economy and shale development.

Companies mentioned
Falkland Oil & Gas , Forum Energy , Coastal Energy , See more..., Borders & Southern Petrol, Coastal Energy Company, Exxon, Apache, EOG, Total, Americas Petrogas, Madalena Ventures, Repsol YPF

Oil & Gas

28/10/2011
Seismic reflections: Singing those 100% equity blues
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Junior oil and gas companies with large equity positions in prized assets offer investors plenty of upside when things go well. However, markets often do not value this potential, and in some cases penalise the junior for what is viewed as a high-risk strategy. Development risk and access to funding are often key to this discount. However, farm-ins also confirm the value industry partners are willing to give to assets “in the ground”, while adding a sense check to decision making. Without this, some juniors may continue to suffer to get the recognition their assets quite possibly deserve.

Companies mentioned
Rockhopper Exploration , Xcite Energy

Oil & Gas

26/10/2011
Macro Outlook: Market backdrop still bearish
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Oil prices have recovered some lost ground since the plunge of August and September driven by optimism that the sovereign debt crisis can be contained. Although a financial meltdown will probably be avoided, the macroeconomic outlook remains challenging in the OECD and is deteriorating in the developing world. The upshot is likely to be weaker near- to medium-term oil demand growth than is expected by the bulls and a subdued trend in prices.

Companies mentioned
Show companies...BP, Shell, BG, Statoil, Brigham Exploration, BHP, Petrohawk Energy

Mining

07/10/2011
Indium and gallium overview
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This report outlines the principal uses, market drivers and price trends for two little-known but increasingly in-demand metals, indium and gallium. Supply-side constraints due to Chinese export restrictions and the marginal cost benefit of production to bauxite and zinc miners offer an opportunity to western mining companies to exploit this niche sector of the metals market by developing alternative deposits.

Companies mentioned
South American Silver Corp

Oil & Gas

30/09/2011
Seismic reflections: Enormous North American potential
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A recent National Petroleum Council study on behalf of the US Department of Energy points to the enormous potential of North America’s hydrocarbon resources. The study highlights the now well understood scale of the continent’s natural gas resources in the wake of shale gas development and draws attention to the potential for a substantial boost in oil production. A key conclusion is that North American oil production could conceivably reach 22.5mmb/d by 2035. This is not only twice current levels but exceeds 2010 consumption of 21.4mmb/d. However, the achievement of the production indicated assumes a benign environment in terms of access to reserves and regulation. In other words, production is more a question of politics than the availability of reserves or technology.

Companies mentioned
Show companies...Urals Energy Public Company, Encore Oil, Cadogan Petroleum, Kea Petroleum Plc, President Petroleum

Aerospace & Defence

20/09/2011
DSEi: Feedback and thoughts
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Following the defence trade show DSEi last week, we look back at the key themes that have emerged and outline our thoughts on the general mood ahead of a detailed update to our report on the sector, Sensors for investors. With budget uncertainty a key topic and areas of growth at a real premium, we believe that M&A could well accelerate to reposition companies in niche technology areas.

Companies mentioned
Cohort , QinetiQ Group , Ultra Electronics , BAE Systems , Chemring Group , Avon Rubber

Oil & Gas

16/09/2011
Seismic reflections : Tullow’s breakthrough discovery
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Tullow Oil’s announcement last week that it has discovered oil off the coast of French Guiana points to the opening up of a new play along the coast of South America, with further similar prospects in several basins across French Guiana, Suriname and Guyana. The Zaedyus exploration well encountered oil in a fan system similar to that found along the West African coast, especially in the company’s Jubilee field offshore Ghana. Demonstrating that its African success can be replicated across the Atlantic vindicates Tullow’s theory that offshore West Africa and South America share common geological origins, and the company now has much to play for, with the scale of the remaining prospects likely to match current upper estimates for Zaedyus.

Companies mentioned
Northern Petroleum , Nautical Petroleum , Rockhopper Exploration , Forum Energy , See more..., Tullow Oil, Falkland Oil and Gas, Exillon Energy, Gulf Keystone Petroleum

Oil & Gas

11/08/2011
Macro Outlook - Rapidly weakening market backdrop
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We believe the near-term outlook for oil prices remains bearish and see little scope for a renewed upsurge in 2012. A raft of economic statistics in the US and Europe combined with anti-inflation measures in the BRICS and rising OPEC production are all pointing to an underling loosening of the market over the balance of 2011. Financial deleveraging in the OECD probably implies significantly weaker medium-term oil demand than assumed by the bulls.

Companies mentioned
Show companies...Sterling Energy, Cairn, Exxon, Chevron, ConocoPhillips, CVR Energy, Holly Frontier, Western Refining, Delek Holdings

Oil & Gas

05/08/2011
Seismic reflections: Confidence in Kurdistan grows
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Iraq, including the autonomous Kurdistan region, probably has the world’s largest concentration of untapped, easily recoverable oil reserves. Pioneering moves were made into Kurdistan in the 2000s by the likes of Gulf Keystone and Hunt Oil, with considerable drill-bit success. In late July, two important Kurdistan exploration and development deals were announced. These involve Afren acquiring interests in two PSCs with sizeable contingent reserves and a Hess-Petroceltic partnership signing two PSCs for exploration purposes. With increasing production and improving relations between the regional and Iraqi federal governments, these deals reflect growing confidence in Kurdistan’s potential as a major new petroleum province.

Companies mentioned
DEO Petroleum , Green Dragon Gas , Xcite Energy , Sound Oil

Oil & Gas

15/07/2011
Seismic reflections: Yet another US shale mega-deal
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BHP’s agreed acquisition of Petrohawk constitutes another very interesting deal in the US shale arena. The deal involves BHP paying $12.1bn in cash for Petrohawk, which is one of a string of mid-tier US oil and gas stocks that have risen to prominence in recent years to develop the shale plays of the US Mid-Continent and southern states. BHP will also be assuming $3.0bn in net debt resulting in an enterprise value of $15.1bn. Petrohawk has a very sizeable resource base of 35tcf (5.8bnboe) spread across three plays: Eagle Ford (South Texas), Permian (West Texas) and Haynesville (Louisiana). These are all excellent addresses. The proven reserves are 3.4tcf (567mmboe). Production is currently highly significant at 950mmcfe/d or 158,000boe/d.

Companies mentioned
Nighthawk Energy , See more..., Empyrean

Oil & Gas

08/07/2011
Seismic reflections: Falklands’ turning point?
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Future development of the Falklands came one step closer last month, when, for the first time, commercial rates were delivered during a well test in the region. With a stable rate of over 5,500bopd from the latest Sea Lion appraisal well, any doubts that it is possible to produce at such rates in the North Falkland Basin should now be put to rest.

Companies mentioned
Green Dragon Gas , Xcite Energy , Range Resources , Nighthawk Energy , See more..., GLOBAL PETROLEUM, VOLGA GAS, HARDY OIL AND GAS, ENDEAVOUR INTERNATIONAL, PRESIDENT PETROLEUM, MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

24/06/2011
Seismic reflections: An exciting investment story
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US shale oil projects are red hot. Indicative of this is Marathon’s recent $3.5bn acquisition of Hilcorp Resources, the owner of some prime acreage in the Eagle Ford play in South Texas. The deal values Hilcorp at an unprecedented $25,000/acre and the potential resources at $8/barrel. We believe US shale oil is one of the most exciting investment stories in oil and gas presently by virtue of the scale, quality and location of the resources available and the potential returns available at current prices.

Companies mentioned
Xcite Energy , Range Resources , Nighthawk Energy , Nautical Petroleum , Sound Oil , Rockhopper Exploration , See more..., GLOBAL PETROLEUM, VOLGA GAS, HARDY OIL AND GAS, ENDEAVOUR INTERNATIONAL, PRESIDENT PETROLEUM, MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

22/06/2011
Still bearish
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We continue to believe that benchmark light oil prices will trend downward over the balance of the year. The OECD economic backdrop is clearly deteriorating partly under the weight of high oil prices, China and other developing countries are increasingly battling inflation and Saudi output is being stepped up. In our view, the oil supply/demand balance will be nothing like as tight in Q3 and Q4 as currently assumed by the bullish consensus.

Companies mentioned
Show companies...Marathon Oil Corporation, Kohlberg Kravis Roberts, Hilcorp Resources Holdings

Mining

13/06/2011
Switzerland: Global Resources Investing Conference
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While silver’s recent fall of 30% has grabbed the headlines and commentators have gleefully predicted the end of the commodities bubble, much less attention has been focused on where prices actually are after the ‘crash’. Gold, for example, still trades at six times its 2001 low and silver approximately the same. The falls nevertheless demonstrate that investors are nervous and desperately keen to avoid getting caught in the same trap as in 1980. While the sentiment is understandable, we believe there are good reasons why the fundamental pressure on commodity prices remains upwards. In particular, this centres on negative real interest rates in the US, especially at the short end of the yield curve.

Companies mentioned
Show companies...American Manganese, Auryx Gold, Bravo Gold, Geologix Exploration, Great Basin Gold, Legend Gold, Lucky Strike Resources, Prodigy Gold, Romios Gold Resources, Southern Silver Exploration, Takara Resources, Timmins Gold

Oil & Gas

03/06/2011
Seismic reflections : Move to mitigate UK North Sea tax change?
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Tullow Oil’s recently announced agreement to acquire a portfolio of assets offshore The Netherlands makes sense as it fits with the company’s existing Dutch and UK Southern North Sea assets. But what is the underlying reason for the company paying a premium for these resources, and does it serve as a pointer towards a more general shift away from the UK North Sea in the light of the recent tax hikes?

Companies mentioned
Falkland Oil & Gas , Xcite Energy , Gasol , Faroe Petroleum , Range Resources , Northern Petroleum , Nighthawk Energy , Sound Oil , See more..., GLOBAL PETROLEUM, VOLGA GAS, HARDY OIL AND GAS, ENDEAVOUR INTERNATIONAL, PRESIDENT PETROLEUM, MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

23/05/2011
Seismic reflections : Commodity prices only a side issue
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Oil and gas stocks have taken a beating on the back of recent falls in global oil prices. However, while both small and large caps are affected by oil price volatility, our analysis suggests endogenous factors have far more of an impact on juniors than their larger cousins. Investments in smaller E&P companies obviously carry significant risks; however, oil price exposure is probably not top of the list. And for this reason alone we suggest a balanced oils portfolio should always contain some smaller stocks.

Companies mentioned
Lochard Energy , Greka Drilling , Falkland Oil & Gas , Green Dragon Gas , Xcite Energy , Tower Resources , Coastal Energy , Ithaca Energy , Mediterranean Oil & Gas , Gasol , Premier Oil , JKX Oil & Gas , Range Resources , Nighthawk Energy , See more..., GLOBAL PETROLEUM, VOLGA GAS, HARDY OIL AND GAS, ENDEAVOUR INTERNATIONAL, PRESIDENT PETROLEUM, MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

18/04/2011
Crude market potentially vulnerable
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Crude oil markets are vulnerable to a reversal of the bullish sentiment that has prevailed since the third quarter of 2010. We believe that in the coming months supply fears could well dissipate, while evidence of the impact of historically high prices on world economic activity grows. Rather than supply deficits in 2011/12, a swing to surplus is looking a possibility. Prices for benchmark light crudes are potentially vulnerable by $30/barrel over the next six months.

Companies mentioned
Rockhopper Exploration , See more..., Gulf Keystone, Encore Oil

Oil & Gas

15/04/2011
Seismic reflections : Looking vulnerable
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Crude oil markets are vulnerable to a reversal of the overwhelmingly bullish sentiment that has prevailed since the third quarter of 2010. We believe that in the coming months supply fears could well dissipate while evidence of the impact of historically high prices on world economic activity grows. Rather than supply deficits in 2011/12 a swing to surplus is looking a possibility. Prices for benchmark light crudes, we believe, are potentially vulnerable by $30/barrel or more over the next six months.

Companies mentioned
Tower Resources , Mediterranean Oil & Gas , Range Resources , Sound Oil , Gulfsands Petroleum , See more..., VOLGA GAS, HARDY OIL AND GAS, ENDEAVOUR INTERNATIONAL, PRESIDENT PETROLEUM, MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

01/04/2011
Seismic reflections : Taxing matters
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Our team attended the North Sea Oil & Gas conference in Aberdeen this week. Without doubt the topic of discussion was the tax changes in the 2011 budget and the impact on the oil industry. While the press has jumped on the obvious (projects being put on hold, declining production, less investment and job creation in the North Sea), there are more considered questions that were raised by the industry which we find put the North Sea oil players at a disadvantage to peers operating elsewhere.

Companies mentioned
Falkland Oil & Gas , Forum Energy , Xcite Energy , Tower Resources , Gasol , SOCO International , Range Resources , Nautical Petroleum , Sound Oil , See more..., VOLGA GAS, HARDY OIL AND GAS, ENDEAVOUR INTERNATIONAL, PRESIDENT PETROLEUM, MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

11/03/2011
Seismic reflections - Introducing the oil screen
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Welcome to the inaugural edition of our Edison oil & gas industry outlook. Designed for industry professionals and investors alike we will highlight topical industry issues, identify investment catalysts, look at market movers and shakers, and ultimately consider how this feeds into valuation. Our initial focus is on FTSE-listed independents, but where appropriate we will extend our reach to companies listed on other exchanges and even IOCs where they affect the industry as a whole.

Companies mentioned
Dragon Oil , Leni Gas & Oil , Green Dragon Gas , Forum Energy , Xcite Energy , Valiant Petroleum , Coastal Energy , Ithaca Energy , Mediterranean Oil & Gas , Leed Petroleum , Faroe Petroleum , Premier Oil , JKX Oil & Gas , Range Resources , Northern Petroleum , Nighthawk Energy , Nautical Petroleum , Sound Oil , Rockhopper Exploration , Gulfsands Petroleum , See more..., MAX PETROLEUM, SOUND OIL, PRESIDENT PETROLEUM, FORUM ENERGY, GREEN DRAGON GAS, TULLOW OIL, AFREN PLC, ROXI PETROLEUM, PREMIER OIL, EUROPA OIL AND GAS, ENDEAVOUR INTERNATIONAL, FAROE PETROLEUM, SOCO INTERNATIONAL, CAIRN ENERGY, GULFSANDS PETROLEUM, ENQUEST PLC, ITHACA ENERGY, COASTAL ENERGY COMPANY, RANGE RESOURCES, VALIANT PETROLEUM, AURELIAN OIL AND GAS, ENCORE OIL, FORTUNE OIL, INDUS GAS, MELROSE RESOURCES, BOWLEVEN PLC, NAUTICAL PETROLEUM, PROVIDENCE RESOURCES, EGDON RESOURCES, VICTORIA OIL AND GAS, SERICA ENERGY, ZHAIKMUNAI LP, HARDY OIL AND GAS, DRAGON OIL, ANTRIM ENERGY INC, XCITE ENERGY, AMINEX PLC, PETRONEFT RESOURCES, EXILLON ENERGY, JKX OIL AND GAS, ROCKHOPPER EXPLORATION, CIRCLE OIL, HERITAGE OIL, RESACA EXPLOITATION INC, ASCENT RESOURCES, NIGHTHAWK ENERGY, NORTHERN PETROLEUM, LEED PETROLEUM, URALS ENERGY PUBLIC COMPANY, VOLGA GAS, BANKERS PETROLEUM LTD, LENI GAS AND OIL, IGAS ENERGY PLC, GLOBAL ENERGY DEVELOPMENT, MEDITERRANEAN OIL AND GAS, CADOGAN PETROLEUM, PETREL RESOURCES, INDEPENDENT RESOURCES

Oil & Gas

25/02/2011
Supply fears exaggerated
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Benchmark light crude prices excluding WTI have trended higher of late driven by the revolutionary atmosphere in North Africa and the Middle East. While the risk of a major supply interruption has clearly increased in recent weeks, we believe such an event would be short-lived. Near-term, Brent could easily exceed $120/barrel but a softening trend or even a ‘death spiral’ is looking increasingly likely once the revolutionary fervour in the Middle East is satiated.

Companies mentioned

Mining

01/02/2011
Indaba special
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Welcome to our special Indaba edition of Edison Insight, with profiles on our mining companies and a sector focus piece by Charles Gibson. In the last year, our mining coverage has increased dramatically. The team is led by Charles Gibson, who is supported by a team of four other analysts. Today the team covers 54 companies, 46 of which are corporate clients of Edison. Our clients range from well established FTSE 100 companies to junior explorers on AIM. Our approach is global and we write on companies on several different exchanges, including the TSX, ASX and JSE. Over the last year our research has been read by over 2,500 unique institutional investors.

Companies mentioned
Pan African Resources , Amur Minerals Corporation , Continental Coal , African Eagle Resources , Kopy Goldfields , Bellzone Mining , Fronteer Gold , Arian Silver , Alkane Resources , Ironwood Gold , Baobab Resources , Ariana Resources , Allied Gold Mining , Nevsun Resources , Sirius Minerals , Goldplat , Altona Energy , Red Rock Resources , Bezant Resources , Anglesey Mining , Aurizon Mines , Eastern Platinum , Gold One , Petropavlovsk , Ferrexpo , Coal of Africa , Aquarius Platinum , Oracle Coalfields , Nkwe Platinum , MDM Engineering Group , GMA Resources

Oil & Gas

20/12/2010
Sentiment turns bullish
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Companies mentioned

Oil & Gas

25/11/2010
Mongolia: A land of opportunity
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If Mongolia was an investment stock, it would be a cross between a large high growth dotcom and an early stage technology play. The growth prospects are excellent, with output from just one of the country's mines (when running at full capacity) equal to the total current GDP of the country. However, the path to this high growth phase is not fully tested. The financial and capital markets are immature, the infrastructure (from roads to power and water) are inadequate and not all of the country is convinced that it should share its wealth.

Companies mentioned

Oil & Gas

15/10/2010
The market remains well supplied
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Companies mentioned
Xcite Energy , SOCO International , Faroe Petroleum , Regal Petroleum , Nighthawk Energy , See more..., Dana Petroleum, Exillion Energy, Exxon, Geopark, Heritage

Technology

11/10/2010
After the meteor
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It is old news that the upcoming UK budget review will be draconian. Companies have known for some time that large-scale public projects in particular are under severe threat and the UK IT industry will not escape. Eagle-eyed investors will notice though that several niche healthcare IT stocks actually rallied post the announced NHS IT restructuring and £700m budget reduction.

Companies mentioned
SciSys , Allocate Software , See more..., Promethean, EMIS Group, Craneware, RM, Sepura, System C Healthcare, Globo, OMG

Technology

24/09/2010
The third pillar
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Business and society in general is increasingly being shaped by the globalised communications and information infrastructure. However, this dependence brings vulnerability. With vast quantities of sensitive and mission-critical data being transmitted through the ether and being stored remotely, the rise of IT security as a priority for governments, corporations and consumers is only just beginning.

Companies mentioned

Technology

10/09/2010
The real disruptor
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Apple’s explosion onto the handset scene has had a profound impact on the balance of power within the industry. However, the rapid emergence of Google’s Android is in our view a much bigger disruptive threat to the mobile device industry. From Q209 to Q210, sales of Android-based devices went from 2% to 17% of global Smartphone volumes, matching Blackberry and overtaking Apple.

Companies mentioned

Technology

27/08/2010
Merger mania is back
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Our analysis of mergers and acquisitions in the global technology market over the past five years indicates that H110 saw the first period of y-o-y deal growth since H207. Global tech deals grew by 45% to $41bn in the period, almost half of which were cross-border. Most recently, DELL’s and HP’s increasingly expensive battle for loss-making business 3PAR indicates clearly that merger mania is back.

Companies mentioned

Oil & Gas

16/08/2010
The spectre of weakening prices
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Crude oil and refined product markets are in significant surplus currently which sets the scene for some near-term weakness in prices. A lacklustre price trend is also expected to extend into 2011 reflecting the likely persistence of well supplied markets and historically high inventories. Weak fundamentals relate to OPEC and non-OPEC supply additions and an increasingly lacklustre economic backdrop.

Companies mentioned

Electronics & Electrical Equipment

13/08/2010
Chip stocks look exposed to a correction
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Chip stock performance has always been geared to economic cycles. Over the past few years the ‘consumerisation of technology’ has meant that the correlation with consumer confidence has also grown closer. Recent economic and consumer confidence data therefore do not bode well for the sector’s performance.

Companies mentioned
Imagination Technologies , CSR , ARM Holdings , IQE , See more..., Apple, CSR, Ericsson, HTC, IMG, Logitech, Pace,