MARKET REPORT: Fracking Soars After Truss Lifts Drilling Ban

Shares of fracking companies soared after the prime minister lifted a ban on drilling shale gas onshore.

During her second day in office, Liz Truss lifted a moratorium that went into effect in November 2019 over fears fracking could cause minor earthquakes or tremors.

Companies can now apply for planning permission to fracture what are believed to be huge shale gas reserves beneath the UK.

Green light: Workers at the Cuadrilla fracking site in Lancashire. Liz Truss has lifted a drilling ban that came into effect in 2019 over fears fracking could cause minor earthquakes or tremors

Investors have anticipated the move as shares of AIM-listed Egdon have more than doubled since the start of August.

Chief Executive Mark Abbott hailed the Prime Minister’s decision as the “logical and pragmatic response to the new geopolitical reality”.

“With Egdon’s material position in shale gas, we look forward to working positively with government and local communities to deliver this nationally important resource in a timely manner,” he said.

IGas Energy, meanwhile, which was founded in 2003, said the UK’s “world-class shale gas resource” is now a “strategic national asset” given the current energy crisis.

Boss Stephen Bowler said the decision would improve UK energy security, increase tax levies and provide a means to level the economy.

Charles McAllister, director of UK Onshore Oil and Gas, which represents the onshore oil and gas industry, also praised the government for its “reasonable foresight” in lifting the moratorium as shares in Egdon jumped 16%, or from 1.2p to 8.7p and IGas gained 12.1%, or 11.5p, to 106.5p.

Stock Watch – War Paint

war paint London shares jumped on a positive trading update.

Ahead of half-year results later this month, the AIM-listed skincare and makeup company expects to beat market expectations for the year after “heavy trading”.

Warpaint, which sells products like Boots, Asda and Matalan, expects 12-month sales to be at least £61m and profits over £9m.

The shares jumped 17.7%, or 19.5p, to 130p.

As financial markets digested the Government’s exceptional energy package – including freezing energy bills to £2,500 a year from October, the FTSE 100 rose 0.3% or 24.23 points at 7262.06 and the FTSE 250 rose 0.4% or 66.81 points to 18878.29.

Shares of Energean rose after the oil and gas group raised its annual revenue and profit targets.

Rising gas prices in Egypt as well as Israel, where its Karish project is due to start production in weeks, helped Energean post a 65% increase in revenue to £296m ($339m). ) in the six months to the end of June.

And profits soared 165% to £173m ($198.2m).

Despite the strong performance, Energean, which is valued at around £2.2bn, has been hit by a windfall tax on windfall profits in Italy.

The group said it had already paid 40% of the £25.5m charge and expects to pay the rest by the end of November.

Energean hailed its “strong cash flow” after declaring a first quarter dividend of 30 US cents per share.

He also reiterated his desire to return at least £870m to shareholders by the end of 2025, sending shares up 13.3%, or 166p, to 1,411p.

In a bad day for retail investors, Primark owner AB Foods fell 7.6%, or 110p, to 1345p after warning on profits.

The dismal results swept across the sector as Next shares fell 3.8%, or 232p, to 5,816p, B&M fell 5%, or 18.2p, to 344.1p and B&Q owner Kingfisher fell 1.4%, or 3.3p, to 237.4p. .

Marks & Spencer has faced additional pressure on its shares, which have fallen to the lowest level since November 2020. After JP Morgan earlier this week, RBC analysts lowered the target share price to 140p from 160p .

Taking its losses this year to more than 50%, shares of the retailer, which are valued at around £2.4bn, fell 4.2%, or 5.15p, to 116.85p.

Healthcare group DCC sealed the biggest acquisition in the company’s history – but shares still fell 0.3%, or 12p, to 4,790p

The group has bought the medical devices business Medi-Globe Technologies – which employs around 600 people – for £213m, with the deal due to close in the final quarter of this year.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.

Comments are closed.