Reuters UPDATE 1 – Premier, Nautical, Encore find oil at North Sea well.

I’m surprised Nautical hasn’t moved higher on this news today as the significance of Varadero is huge in terms of the over all drill program. Had it failed, the 4 drill plan would have reduced to just one further drill – the Catcher appraisal. TheShareHub target price of 700p remains, until further drills on the area are completed.

UPDATE 1-Premier, Nautical, Encore find oil at North Sea well | Reuters

Bowleven due to reach TD soon

Bowleven’s last update was on November 25th and the RNS stated…

“Forward exploration and appraisal programme

It is now planned to drill to a target depth (TD) of approximately 4,450 metres to test further prospective horizons, including the deeper Cretaceous, a play untested within this part of the Douala Basin.

Drilling activity is expected to take a further 20 to 30 days (excluding testing). In the meantime planning for testing and appraisal drilling/sidetracking activities on the Omicron discoveries is underway.  The forward plan will be reviewed by the joint venture on reaching TD.

The Company plans to issue an update announcement on reaching the target depth of the well or, as appropriate, on completion of logging activities.

Kevin Hart, Chief Executive of Bowleven plc, commented:
“Whilst we recognise that further evaluation and appraisal are required, the additional pay encountered in the Miocene section provides further support to our view that the Omicron discoveries are potentially transformational. We look forward with anticipation to recommencing drilling and intersecting the deeper cross-cut event and Cretaceous Epsilon targets.” END.

As shown by recent ‘Heads Up’ on Nautical, an RNS can come at any point during the trading day and investors should not assume all RNS’s are issued at 7am each morning. Many companies differ on their RNS policy, although ‘material’ news has to be reported to the market as soon is possible.

Bowleven’s current drill is getting close to TD based on previous timings and updates on 20 to 30 days timeframe. Any further significant discoveries in the targetted Cretaceous Epsilon zones will likely see the stock rerated higher subject to the findings. All eyes on Bowleven in the coming days.

Yes!!!!!!!!!!! Nautical Strike at Varadero! News just out

Nautical RNS just out – It’s good! It clearly was imminent!

For immediate release 4 January 2011

Nautical Petroleum plc (“Nautical” or the “Company”)

Varadero Oil Discovery
Nautical Petroleum plc (LSE: NPE) is pleased to announce that the Varadero exploration well 28/9-2 located in UK Central North Sea block 28/9 was drilled to a Total Depth of 5,205 feet Measured Depth (M.D.) having successfully encountered high quality oil bearing reservoir within the target Tay Sandstone.

The Tay formation had a gross thickness of 186 feet with a calculated net pay of 84 feet. Analysis of the logs indicates the reservoir quality is excellent, with high permeability, average porosity of 35% and average oil saturation of 84%. In addition to the primary Tay interval there is a further 22 feet of net hydrocarbon pay in thinner sands. Extensive wireline sampling and pressure testing has been carried out which indicate that the reservoir fluids are oil with an API of approximately 26 degrees.

The well also encountered deeper sands of Cromarty age (the principal reservoir in Catcher) although, as expected, they were not hydrocarbon bearing at the Varadero location.

The well will now be plugged and abandoned as planned, and then the Galaxy II rig will be moved to the Burgman prospect. A further announcement will be made when the Burgman well is spudded.

Steve Jenkins, Nautical’s Chief Executive Officer, commented:
“The Varadero discovery is an excellent result with the Tay reservoir being significantly thicker and better quality than our pre-drill estimate.  The success further underlines the great potential of Block 28/9. So far, the seismic data has highlighted the presence of high quality hydrocarbon bearing Tay sands, proven by the East Catcher and Varadero discoveries. This augurs well for the numerous mapped anomalies on the block. We look forward to drilling the third of these Tay prospects with the Burgman well, where we also have targets in the Cromarty as well as the higher risk Jurassic Fulmar formation.”

Nautical has a 15 per cent. equity interest in Central North Sea block 28/9.

Nautical Varadero TD – imminent

Great to see NPE break 400p this morning. I thought it would be fast to test 420p from that level. They are currently drilling (along with partners Encore and Premier) the Varadero well and are just a few days away from a TD based on previous company guidance. They could TD as early as tomorrow if drilling progress has been fast.

This is the first of a possible 4 well appraisal program. Be aware, that if Varadero is not successful, then it is more than likely that the sp will drop back. Although, at 410p range there does not appear to be very much priced in for a success. A failure on Varadero will see them move directly over to Catcher to drill an appraisal well with high CoS. Thus, any pullback maybe shortlived and investors that are sidelined or looking for a top up point might see a Varadero duster as a good opportunity to enter/build on weakness ahead of the future drills.
Encore Oil will also trade with similar sentiment as both Encore and Nautical are 15% holders in the Catcher/greater catcher area prospects. Encore are the operator.

New POLL – BOE Interest Rates Forecast

A new year and a new Poll to challenge your thoughts.

The recent FTSE 100 Poll was interesting as it picked a ‘finish’ point for 2011 which of course doesn’t tell the full story or explain the thinking behind investors choices. As explained in my earlier post, I see the FTSE doing well but possibly tailing off or cooling a bit as we enter Q4. This reflects my belief that we may well see one or two interest rates rises in the Second half of this year.

The bank rate was left unchanged at 0.5% at the last meeting in DEC 09. Unchanged now for almost 2 years.

Cpi inflation was up at 3.3% in November. The previous month was 2.9% which makes November the largest jump since records began in 97′. Hence, price pressure is building, and the BOE are a tad red faced after making some poor inflation target/predictions.

Reuters Poll’s have varied over the last few months with 0.75%, 1% and 2% all mentioned by the end of 2011.

Ultimately – it all comes down to how the global economies perform this year and I doubt the FED’s will be raising rates anytime soon. The question is… when will the BOE start to break the near 21 month unchanged run and by how much.

Poll closes on Jan 31st, so vote away!

Be careful – 1st trading day of 2011

The first trading day of the stock market year is notorious for being an interesting event as many investors start the year off with a flourish. The combination of newspaper tipsters and brokers tips all serve to drive early interest in specific / highlight stocks. The US Dow Jones was looking spritely at 100pts+ for most of yesterday in a quiet trading session, eventually closing up 93 pts.

Be careful of stocks with smallish share floats. Market makers often hold very low amounts of stock and thus become ‘short’ of stock at times of high demand. As a consequence, share prices in these stocks can move fast and be extremely volatile. So be careful to not get hoodwinked by some lofty entry points purely because it’s the first day of trading. There’s circa 250 days trading ahead in 2011, so plenty of time. As most will know, if you miss the bus, taxi or train – there’s always another one coming along shortly after – patience is the key and stick to your own trading strategy which should be based on your own personal circumstances.

Good luck and best wishes to everyone for a great investment year ahead.