London stocks in the news; ANGLE, StatPro, IGas Energy, Leni Gas & Oil, Range Resources

Intellectual property group ANGLE (LON:AGL) was at the centre of attention in London markets this morning after unveiling a new and improved deal to commercialise its potentially revolutionary embryo selection technology for IVF.

And alongside the agreement between subsidiary Novocellus and Danish firm Origio, the group unveiled a £1.2 million cash call, which will help fund the development of the EmbryoSure selection system.

The cash will also be used to take the company’s lead product, a cancer screening device developed by its Parsortix business, to the stage where it can be sold to the research market.

This will then provide an early, but much needed source of revenue ahead of full commercialisation of the cancer screening device.

The cash was raised via a direct subscription and a placing of stock at 70 pence a share, a 13 per cent discount to last night’s close.

ANGLE said EmbryoSure trials will begin shortly in order to launch the product by mid-2014.

There are two elements to these trials.  A retrospective investigation will look at the benefits to the IVF selection process had EmbryoSure been used to assess pregnancy.  

In the second study the technology will be used to select embryos for transfer. It will consider the effect on pregnancy and measure the success rate.

Recognising the increased costs of the trials, ANGLE has agreed to pay more towards the trials, with the maximum contribution being £500,000.

ANGLE’s holding in Novocellus will increase by 10 percentage points to 92 per cent.

It will receive £4.5 million in milestone payments and a 25 per cent royalty payment if and when EmbryoSure goes on sale.

ANGLE founder and chief executive, Andrew Newland, said: "We are delighted that the EmbryoSure trials are now progressing without delay and continue to believe that EmbryoSure has the potential to make a major impact in the IVF market."

The science behind the product was developed by the University of York, and it tests the amino acid profile of the culture medium used to carry the fertilised egg. 

“We believe EmbryoSure will identify with 95 per cent confidence which one of the embryos is likely to be a top quartile embryo,” said Newland in a recent interview.

Today, Proactive Investors talked to chief executive of software firm StatPro (LON:SOG) Justin Wheatley.

StatPro’s new Revolution product is a low cost, high spec cloud-based analytics package for fund managers, which was launched at the end of last March.

And in just nine months it has built a commendable revenue base of just under £500,000 after it signed 50 clients.

This contrasts with 250 clients amassed over more than a decade for the company’s existing platform, StatPro Seven.

Seven generates around £29 million of sales a year and has a 92 per cent renewal rate.

However the company’s broker, Cenkos, estimates that sales are declining at around 7 per cent per annum.

Against that backdrop, it made sense to concentrate all the sales effort on the new, growing Revolution product, Wheatley said.

“We are totally focused on Revolution,” he added. “It represents a vast market.

“We have 50 clients in nine months versus 250 for Seven in 12 years. “This really puts it in perspective - the rate at which one can gather clients.

“There are thousands of potential clients around world.

“We need to get cracking. The sooner we do, the sooner we pile on revenues.

“We can’t know or hazard a guess at what these potential revenues might even be.

“But we know if we focus on it we will get there quicker than if we do it piecemeal.”

Cenkos predicts that Revolution revenues will total around £1.25 million this year, though it has also reined in its 2012 earnings prediction.

“It is possible that this year we will have slightly lower revenues,” said Wheatley

“But what we plan is a more productive use of our time and money.

“Revolution is an incredible opportunity. Seven, meanwhile, has reached the limit of what we can do with it. We need to go with something and it is quite exciting.”

Another feature story of the day was dedicated to IGas Energy (LON:IGAS), which has found a ‘very significant’ area of shale gas at the Ince Marshes site in Cheshire.

A shale section of at least 1,000 feet was found in the well. At target depth the well was still in the shale section, it said.

Gas indications were observed across the interval and it has identified a number of potentially prospective zones.

Chief executive Andrew Austin says he is very encouraged by the discovery of shale gas at Ince Marshes. He added that the shale interval exceeds what the firm had been expecting.

According to IGas, this area is part of the Bowland shale. IGas said that previous independent analysis of the Ince Marshes site suggested gas in place volumes of up to 4.6 trillion cubic feet.

In a shallower section of the Ince Marshes well, multiple coal bed methane (CBM) seams were also encountered, with 36 feet of net coal thickness. The well data is now being analysed for both the CBM and shale intervals.

Meanwhile at the Doe Green CBM project in Cheshire IGas has completed the ‘in-coal’ drilling phase for two new wells, DG-3 and DG-4.

The firm expects to start work on the production completion operations, which includes de-watering, for the two wells in the coming days.  After that the wells will be tested.

Indicative flow rates are expected before the end of March.

Meanwhile, broker Cenkos Securities drew investors’ attention to Irish oil and gas explorer ProvidenceResources (LON:PVR), which it said looks significantly undervalued.

Cenkos has set a target price of 857p for Providence shares, with an estimate of the Barryroe prospect alone at $370.6 million or 476p per share.

Providence is currently drilling at Barryroe as part of a $500 million offshore Ireland programme started with its partners last year. Initial results are due in February.

The group upped its stake in the prospect to 80% in December by acquiring San Leon’s 30% stake in return for a 4.5% net profit interest.

As a consequence, Cenkos believes Providence will potentially be able to farm down more of the asset and still retain a holding in Barryroe of 30-40%.

Following a successful drilling programme at Barryroe, it expects Providence to make a declaration of commerciality for a development to produce in excess of 20,000 barrels per day.

“We have valued their ownership in Barryroe alone, on a very conservative 65% COS risked basis, at $370.6 million or 476p per share,” Cenkos said.

Another broker note covered by Proactive analysed the tie up between Leni Gas & Oil (LON:LGO) and Range Resources (LON:RRL), which was announced yesterday.

Analyst Barney Gray at broker Old Park Lane Capital has called the deal "mutually beneficial".

The broker, which rates both stocks a 'buy', released notes on both companies following news they would jointly develop onshore oilfields on the island.

In a binding Heads of Agreement, both companies agreed to jointly develop Range's Beach Marcelle field and LGO's Goudron oil field, which lies immediately adjacent.

The deal will see Range taking a 50 per cent stake in the Goudron oilfield by spending US$8 million. LGO has an option to acquire a 15 per cent stake in the Beach Marcelle project by spending a maximum of US$7 million.

Range already owns a number of producing assets nearby and this tie-up gives it additional reserves and production growth in Trinidad, while LGO gets sufficient cash to buy out Goudron’s previous owner and take the project forward.

LGO's Goudron field was originally developed by Texaco and more than 150 wells have been drilled to date. The field holds 2P (proven and probable) reserves of 8 million barrels. However, P3 reserves are 21.8 million barrels representing significant upside, said Gray.