Heritage Oil PLC (LON:HOIL) shares have leapt higher on Wednesday morning; HOIL was boosted following an update to investors.
However, quick to comment on the update is the analyst team at SP Angel who note the update, "only really provides some further information on OML 30’s tax position, which to date has been in question."
Nevertheless analysts note Heritage Oil PLC (LON:HOIL) remains in a strong position and its interest in OML 30 provides a stable backdrop against which it can expand its operations further, not just in country, but globally too.
"The one cloud on the horizon that we see is the pending licence renewal, which although at the time of acquisition was still 7 years away, needs to start to be negotiated now to save a last minute rush and legal squeeze," say SP Angel.
Meanwhile, XCITE ENERGY LIMITED (LON:XEL) are also in focus, following a reserves Update.
The reason that the XEL share price has been relatively static today gives away the fact that the update revealed little else for investors.
"Today’s update disclosing reserves has only reflected minor adjustments to the reserves position that the Company has had in effect for a period of time now. It seems to us that the Company is waiting for something, and with all of the advisors on board, we can’t help but think it to be acquired," say SP Angel.
There has to be a point at which the Company’s “wait and see” comes to an end and the Company goes it alone.
"Still, with all of the work that the Company has undertaken in the year, the development plan will be almost complete," say analysts.
Morning market review
The FTSE 100 is under pressure today thanks to poor sentiment feeding through from the US and Asia overnight.
Commenting on some market happenings of note today is Jonathan Sudaria at Capital Spreads who says:
"A surprise drop in the US consumer confidence dented investors’ optimism keeping any attempt to move higher in close check. On the other hand, home prices rose at a slower pace than initially predicted which also invited a cautious approach going forward. So, the Dow Jones ended just 12 ticks higher at 16,216 but this morning bulls are again in the driving seat.
"An economic forecast done in Brussels sees the eurozone doing slightly better in the near future but lagging competitors like the US and China. However, the latest economic results in the US were a mixed bag which kept the shared currency and the greenback on an equal footing for more than a week. The EUR/USD pair finished at 1.3745, 10 points up for the day.
"The opening of the southern part of Keystone pipeline eased some supply pressure at Cushing. Nevertheless the US energy complex expects a builds in weekly crude inventories which will be released later today by the Department of Energy.
"Concerned investors did not want to take a risk and took profits yesterday, sending the WTI crude prices 75 cents down to $102.05 a barrel."