African oil explorer is poised for success
Keep an eye on Cameroon/Gabon oil explorer Bowleven (BLVN) over the next few weeks and months as it continues with its drilling campaign.
The current surge of interest in small-cap oil exploration should see the share price higher in due course.
The company owns seven blocks of which five are in the Cameroon and two in Gabon with an estimated resource 165 million barrels of oil or equivalent.
It is currently carrying out 'high-impact' exploration drilling in the Etinde Permit in Cameroon.
Some of the drilling has been farmed out to overseas oil majors in which Bowleven retains an interest.
In fact oil trading house Vitol, which last year recorded revenues of $143 billion, is due to announce whether it wishes to exercise its options to provide additional funds for further exploration in the Etinde Permit.
The company is run by the former finance director of FTSE 100 Cairn Energy (CNE), Kevin Hart, so one would hope he didn't make the move just to run his own show, given the outstanding success of Cairn Energy.
It is estimated that after the intensive drilling carried out on the Sapele-1 offshore project in Cameroon, which is currently being drilled, the company will have around $80 million in cash (£51.5 million) and zero debt.
A dip down to 150-160p would be a great buying opportunity, but if you can look at the big picture 400p looks to be an obvious target later down the line, so whether you buy at the current price of 177p or 150-160p may almost be an irrelevance if this price objective is achieved.
Naturally the stock is high risk as it is dependent on exploration success, while asset sales will help boost the cash coffers and provide some support during a capital intensive 2010/2011.
Update
New British Palm Oil – Tipped as a buy at 572p, the stock closed at 612p. Watch for 620p to be broken to confirm a break-out.
Communisis – Tipped at 23.625p, the stock closed yesterday at 22.5p after briefly touching 26p. A close below 22p would not look good from a charting perspective so keep a close eye on this as a possible stop-loss.
IQE – Tipped at 24.25p, the stock closed yesterday at 34.5p, a handsome gain of 42 per cent. Hold for now, with a view that a dip towards 30p could be a possible topping up opportunity.
Tissue Regenix – Suggested as a buy at 16p, the stock has slipped to 13.75p. Sit tight despite the dip and if you have no position, this might be an opportunity to pick up stock on weakness.
Pursuit Dynamics – Suggested as a buy at 223p: the stock closed yesterday at 377p, a 69 per cent gain. The stock is clearly breaking out to the upside and is trading at unchartered territory. Mirabaud, the Swiss stockbroker, recently hiked its price target to 900p.
United Utilities – Buy idea suggested at 593p: the stock closed yesterday at 573.5p. The stock is worth holding for the six per cent dividend yield alone, but one also might expect some excitement regarding M&A activity within the sector.
Bodycote – Buy Idea suggested on 28 July at 236.4p: the stock closed yesterday at 248.6p. If the stock closes above 260p, add to the position.
The material for this report comes from Alpha Terminal. The writer does not hold any shares or derivatives in the above mentioned companies.
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