A bit more on Encore Oil

Summary of today’s update:

• A Market Capital graph with significant RNS’s plotted & some observations (since May 2010)
• An update concerning Cladhan
• An update concerning Spaniards and Tudor Rose prospect
• A chart of upcoming drill result date expectations

Market Capital History & RNS’s

I’ve put a really rough chart of Encore’s market capital against time (share prices used to generate market cap from www.shareprice.co.uk). The significant RNS’s are marked on the chart, so you can see what impact they had on the market cap. The numbers I’ve put on for impact are best estimates.. Clearly the SP fluctuates a lot before and after news, so I’ve done my best to choose reasonable prices before and after to assess the RNS actual impact on company value.

Encore Market Cap vs RNS

If we do use these numbers, you’ll see that about £124m was priced in for Catcher (not the whole block, just Catcher E & N (North being risked)).. Then around £70m was wiped off with the Catcher N result. That leaves around £54m for Catcher priced in, whereas it should be more like £80m (as per my previous Encore post).

Clearly this is no exact science, but I thought that it was interesting.

Cladhan

Valiant Petroleum released an RNS (here) this morning saying they’re farming out 70% of their interest in the ‘Cladhan South’ blocks [Block 210/29c and 210/30b] to Sterling Resources and Wintershall. This is great news… as it demonstrates Sterling (who are operator on Cladhan) have some real confidence in the geology of the block, and its adjacent block. Possibly good things for current Cladhan drill, as they’re still searching for the OWC.

Spaniards & Tudor Rose

Nautical Petroleum, who are partnered with Encore on the Spaniards and Tudor Rose prospect, put together a presentation (found here). In it, they state that there are plans to drill both the Spaniards and Tudor Rose prospect. The decision on whether these drills would take place or not has not been made public by Encore. But I wouldn’t imagine Nautical could publicise this intent if it weren’t true. Both of these are big prospects for Encore. Encore has 40%, and is operator on both prospects. Spaniards appears to be part of a large accumulation, which was discovered in the block beneath. All info contained within the NPE presentation.

The implications of this, in my opinion only, are that Encore are perhaps not at the finish line yet (company sale), as if they plan on drilling these prospects, there’s some legs left in this share before they sell up. Perhaps an asset sale on the cards instead.. We’ll see.

Chart of Upcoming drills

Dates given on these charts are as per Encore’s RNS estimates for drill times. Clearly drills could take more or less time than stated.

Encore’s current drill schedule

The Small Print

Please note that I am not a financial adviser or even employed in the financial sector and am not providing financial advice. The contents of this blog are from my own research of publicly available data, and any opinions expressed are my own. I trust that you enjoy reading them but you must do your own research or obtain financial advice before making any investment. Naturally, I do everything I can to ensure that the information posted by me is entirely accurate, however, any information provided is subject to the possibility of error, both in fact and interpretation, on my part and for that I can not be held accountable.