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88 Energy surges after confirming it on track to restart well-testing at Icewine-2

Last updated: 01:00 30 May 2018 AEST, First published: 18:01 29 May 2018 AEST

Icewine

88 Energy Ltd (LON:88E) has confirmed it is on track to restart well-testing operations at the Icewine-2 well site by June 11.

The shares were up 4.3% at 2.45p and have risen from 1.55p since the beginning of the year.

Site works have concluded at the Franklin Bluffs pad ahead of the scheduled commencement of flow testing of the Icewine#2 well.

Memory gauges from 4,000 feet downhole have been successfully retrieved and processing & analysis of the pressure build-up data will be completed by early next week. The wireline unit also "tagged bottom" confirming that there has been no build-up of debris in the tubing during the shut-in period, 88 energy said.

READ 88 Energy confirms Icewine-2 is on track for June test​

The flow testing programme has been designed to use nitrogen lift to assist the removal of up to an additional 4,000 barrels of fluid from the HRZ reservoir. It is anticipated that this will enable the hydrocarbons in the reservoir to flow naturally to surface at a representative rate.

Based on modelling of the reservoir pressure and fracture conductivity, it is estimated this will take 10-14 days. The well will then continue to be flowed back to ascertain drawdown pressure and decline rate, 88 Energy said.

2.30pm: Advanced Oncotherapy shines a light

There was a positive reaction to the news from Advanced Oncotherapy PLC (LON:AVO) about a refinement to its LIGHT system, which is used to treat tumours.

Its newly-developed time-of-flight (TOF) testing of beam energy control and adjustment has proved to be successful with real-time results demonstrating remarkably good agreement with computer simulations, the company said.

READ Advanced Oncotherapy refines tumour zapper technology

The refinement to the system means the company can more accurately measure the energy of each proton pulse used in its proton therapy system.

The shares were up 5.8% at 55p.

12.45pm: Tekcapital rises as Spreadex reduces its control over voting rights

Investors got on board the Tekcapital PLC (LON:TEK) bandwagon after it emerged that spread betting firm Spreadex’s position in the company has fallen below 3%.

The firm has voting rights through financial instruments accounting for 2.75% of the issued share capital of Tekcapital, the intellectual property portfolio company.

Previously, it had control of 3.1% of the total voting rights.

Shares in Tekcapital rose 11.4% to 19.5p on the news. The shares have been on the recovery trail since hitting a 52-week low in April.

11.45am: IDOX warns on profits as it announces its new boss

Software systems provider IDOX plc (LON:IDOX) fell sharply on Tuesday Morning after lowering profit expectations for the current financial year.

The group, which is to close its loss-making digital division as part of an overhaul of the business, said it expects full-year adjusted underlying earnings (Ebitda) will be in the range of £13-15mln; the market had been expecting Ebitda of around £22.8mln.

In an attempt at damage limitation, the group noted that the underlying performance excluding the discontinued digital division is expected to be in the range £18-20mln (prior to the effect of cost savings).

The group had already been on a cost-cutting drive and had announced at April’s annual general meeting that it expected cost savings of around £7mln on an annualised basis; this has now risen to more than £10mln following the decision to give the digital division the old heave-ho.

The interim dividend has been suspended but the board currently expects to declare a final dividend when its full-year results are announced.

The group announced separately David Meaden will join as chief executive on June 1.

“David's 22-year experience with Northgate Information Solutions where he held board-level leadership roles is especially relevant,” the group claimed.

The shares traded at 32p, down 18.3% this morning. A year ago the shares were trading at around 73p.

10.45am: RedstoneConnect to concentrate on its software business

RedstoneConnect PLC (LON:REDS) saw its shares surge after saying it would focus on accelerating growth in its software business following the disposal of its other divisions.

The AIM-listed smart buildings technology provider said it had conditionally agreed to sell its systems integration and managed services divisions to Excel I.T. Services, an information technology infrastructure company, for £21.6mln to “focus exclusively on expanding the company’s software business”.

The shares were the biggest risers in London, advancing 30.5p to 117p.

10.00am: Dixons takes a dowsing as it warns on profits 

Dixons took a dowsing early doors after the seller of electrical goods issued a two-for-one profit warning.

Dixons Carphone Plc (LON:DC.) said headline profit before tax for the fiscal year just ended will be around £382mln, down from £501mln the year before, while profits in the current year are tipped to fall to around £300mln.

The consensus profit forecast for the year just ended was £368.6mln, although that sound you can hear is the sound of analysts firing up their spreadsheets to revise their forecasts. For the current year, the market had been expecting profit before tax of £382mln.

“The old saying that sales are vanity, but profit is sanity sums up the issues at Dixons just now. The top-line might still be growing but the group is struggling to translate rising sales into higher profits,” said George Salmon, an equity analyst at Hargreaves Lansdown.

“Offering home delivery and installations is proving a burden, with weakness in mobile phone and computing markets putting further pressure on margins.

“These problems aren’t new, but with recent UK economic data starting to look slightly better, investors would’ve hoped last summer’s ugly profit warning wouldn’t be repeated. Unfortunately, this is exactly what they’ve got,” Salmon said.

“Dixons says people are its potential trump card. There’s a definite logic to this - after all the group is by far the biggest specialist electrical retailer with a physical presence, and there’s surely a market for those that like to try before they buy,” Salmon suggested.

Unfortunately, a lot of people seem to be taking a look at products at Dixons’ stores and then buying them cheaper elsewhere online.

“We look forward to a fuller update from the company at the full year results on the company’s plans on 21st June. The key question remains as to what, ultimately, the Carphone Warehouse will look like and how profitable this can be. Deeper clarity on management’s strategy could be the next catalyst,” said Liberum Capital Markets.

“The current valuation reflects an implied CY18E PE [calendar year 2018 price/earnings ratio] of 8.9x and offers a dividend yield of 4.7%,” the broker noted.

Shares in the FTSE 250 company were down by almost a fifth in mid-morning trading.

9.00am: Renold back on the chain gang with an upbeat trading statement

Having displeased the market with a shock profit warning in early March industrial chain supplier Renold plc (LON:RNO) revealed things were not so bad after all today.

The company’s management held its hand up and said it had been too slow in passing on increases in raw material prices to its customers but “through a combination of strategic action and improving market conditions, we have delivered organic revenue growth for the first time in a number of years,” declared Robert Purcell, the chief executive officer of Renold.

READ Renold shares plunge on new profits warning

"Action to pass increased costs to customers through sales price increases has been implemented and, with the factory disruption behind us, profitability increased in the second half of the year," Renold said.

The shares surged 11.4% to 25.4p on the news but have more-or-less halved this year.

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