viewArcher Daniels Midland

Views from the Trading Floor - 23rd February 2012


Saints & Sinners
Oil & Gas

Enegi Oil (LON:ENEG) jumped 18% during lunchtime trading to 20.25p on almost four times the average daily volume. Possibly one of the reasons behind the move is the expectation of another update referred to in the last RNS “The operation went as planned, under very harsh conditions, and approximately 80,000 litres of fluid were used. The significant quantity of fluid used in relation to the wellbore volume indicates the acid has successfully penetrated the surrounding reservoir. Further updates will follow as the programme is executed.”

Gold Oil (LON:GOO) surged 16% to 3.3p at the mid-price on well over 10 times the average daily volume. The shares jumped after the company said “the drilling of the La Vega Este -1 well on the Azar Block in the Putumayo Basin, Colombia, is due to commence in April. Drilling will commence once the civil works have been finalized and the rig becomes available from its current drilling commitment. La Vega Este -1 well will target primarily the Villetta formation with the Caballos as a secondary objective. Gold Oil has a 20% interest in the block, but under a prior commercial agreement will only contribute 10% to the costs of the well. Well is expected to take 35 days excluding testing and completion” Fist line resistance at 3.5p could be the first area to watch for here.

Sterling Energy (LON:SEY) have been slowly climbing under the radar, pushing another 8% better to 47.4p today. The company have been very quiet over the last few months, and holders will surely be looking for some sort of update over the coming weeks. We will be watching the news wires for any signs of the RNS.

Against the backdrop of a shaky market, Xcite Energy (LON:XEL) were in fine form once again, pushing another 7% higher to 141p. Holders here are waiting for an update regarding the rig, and they seem to be happy to back the story down at these levels. The 120p to 140p levels have proven to be decent lines of support over the last year or so, and the 200p level has been a stubborn resistance to break recently.

Sirius Petroleum (LON:SRSP) pushed 8% better to 5.25p and had traded yesterday’s volume before the end of lunch. 6p looks to be the main level of resistance here, with 4.5p looking to act as a support line. Reading through the last update from the company I found this from the CEO Ed Johnson "We are very satisfied with our other business development activities in Nigeria, and we believe that Sirius remains well-positioned to deliver capture on our pipeline of additional opportunities in a timely fashion. We look forward to updating our shareholders as we make further progress." Based on that statement, and the recent move, could the market be in store for another update?


Alecto Minerals (LON:ALO) moved 15% better during early trading after the company said that it has entered into an option agreement relating to the staged acquisition of Forward Africa Resources ('FAR'), which holds the 711 sq km bauxite licence 223 Licence 223 is located in a highly prospective south west coastal region of Guinea which already has established infrastructure and producing bauxite operations. Highly prospective concession with potential to host an in-situ bauxite resource of over 500 million tonnes - 90 day due diligence period prior to completing the acquisition. Quality of the bauxite resource and geography lend the project to near term production. First li ne resistance looks to be around the 2.25p area, with 3p looking to be the next major resistance thereafter.

Angel Mining (LON:ANGM) jumped 7% to 2.3p during lunchtime trading, as bulletin boards speculated the overdue gold pore could be imminent. Holders were expecting the next gold pour announcement at some stage last week, so the market has been expecting this update for a few days now. Holders seem to have drawn a line in the sand at 2.13p, and the next line of resistance does look to be at the 2.5p level.

Uranium Resources (LON:URA) surged 19% to 2.85p, albeit on thin volume. The shares look to have broken out of long term resistance at 2.6p and the next area of interest to watch for here would be the 3p level. Investors have been backing the company since the last update on the 14th of February, when the company said it has commenced its 2012 drilling campaign at its Mtonya Project in southern Tanzania.

Red Rock Resources (LON:RRR) were very active during trading today after the company said that YA Global Master SPV, Ltd. which is advised by Yorkville Advisors LLC, has subscribed for 27,215,148 new ordinary shares in the Company under the terms of the Standby Equity Distribution Agreement ("SEDA") between Red Rock and YA Global, at a price of 2.689 pence per Share The proceeds of the Subscription are GBP731,851, conditional on the Shares being admitted to trading on AIM. The net proceeds of the Subscription are being applied to repayment of loans and on-going working capital requirements. On the news the shares did initially slip to 2.65p before rebounding back up to 2.9p. The main resistance level has been 3p since the turn of the year. Any break and close above could give the green light for a retest of resistance at 3.5p.

Scotgold Resources (LON:SGZ) jumped 8% to 5.25p on almost 4 times the average daily volume. Shares have been running over the last few months and the company have been very vocal with updates since the turn of the year. 6p has been a major area of resistance on this stock for some time now, so it will be interesting to see how the stock reacts to that level again.

From the trading floor

The FTSE 100 had a mixed old bag of trading today, flirting with positive and negative territory all day. The FTSE 100 was 8 points higher at 5925 (+0.13%) on a decent slab of volume, with 750 million shares had changing hands by the 3pm hour. The FTSE AIM All-Share Index was 0.15% better on volume of just over a billion shares.

The BBC website put out a story that said, World leaders have urged Somalis to seize an "unprecedented opportunity" to rebuild their nation, at a gathering in London on the war-torn nation's future. Ending threats of terrorism and piracy were in everyone's interests, UK Prime Minister David Cameron said. Hillary Clinton said plans to elect leaders and adopt a constitution before August were "ambitious". But she said the mandate of the UN-backed interim government would not be extended any longer. On Wednesday, the UN Security Council approved a resolution increasing the number of AU troops in Somalia by 5,000 to more than 17,000. Council members also agreed to extra funding for the mission a nd to extend its mandate. At the same time, Ethiopian and Somali troops took the strategic stronghold of Baidoa in the south-west of the country held by militant group al-Shabab, which recently merged with al-Qaeda. The UK says its increased focus on the country is justified as the activities of militant groups and pirates operating off the coast of Somalia pose a direct threat to British interests in the region and to both regional and global security. Naval ships from the UK and other countries around the world have been sent to patrol the Indian Ocean off the Somali coast to deter pirate attacks. We will be watching companies with exposure to the region over the coming sessions to see if this will have any impact on them.

Commodities Corner
Gold – ↓Trading at $1777, down $2 (-0.05%)
Silver – ↑Trading at $34.92, up 70c (+1.98%)
Copper – ↓Trading at $8341, down $28 (-0.34%)
Zinc – ↓Trading at $2054, down $9 (-0.46%)
WTI Crude – ↓Trading at $105.70, down 57c (-0.54%)
Brent Crude – ↓Trading at $122.71, down 20c (-0.04%)
Natural Gas (HH) – ↑Trading at $2.65, up 1c (+0.55%)
Any questions please don’t hesitate to contact me a t [email protected]

Written by Steven Asfour, Sales Trader at Fox-Davies

Quick facts: Archer Daniels Midland

Price: 39.15 USD

Market: NYSE
Market Cap: $21.75 billion

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