Traders sell-off New World Oil and Gas



The shares dropped almost 42pc on news of an abandoned well.

Traders aggressively sold-off shares in New World Oil and Gas (Other OTC: NOILF - news) after taking fright following disappointing drilling news from Central America.

The small-cap oil and gas exploration group revealed it had plugged and abandoned its Blue Creek 2A ST (BSE: STCORP.BO - news) onshore well in the Petén Basin in north-west Belize. Although chief executive William Kelleher said the company was “highly confident that the elements required for a working hydrocarbon system are in place”, investors were not reassured.

Shares in the company, which also operates in Denmark, plunged 3.35 almost 42pc to 4.65p, the lowest since October 2011. New World will start drilling its next well in the region, Rio Bravo 1, this quarter.

In the wider market, the FTSE 100 (FTSE: ^FTSE - news) started February strongly and reached a four-and-a-half year high. The index climbed 70.36 points to 6,347.24, helped by the latest US jobs data, which did not contain any unwelcome surprises. It was, then, perfect timing for Citigroup’s latest strategy note to hit traders’ screens. Experts at the bank boosted their year-end forecast for the FTSE 100 from 6,200 to 7,000 the most optimistic of the heavyweight brokers.

BT Group (LSE: BT-A.L - news) led the blue-chips up, bolstered by third-quarter results that beat expectations. The shares rose 16.2 6.5pc to 264.8p.

With a decline of 8½ to 804p, Tate & Lyle (LSE: TATE.L - news) , the maker of the sweetener Splenda, was the laggard among a handful of FTSE 100 fallers. Investors were disappointed by the muted outlook the company gave in a trading update.

On the mid-cap FTSE 250 (FTSE: ^FTMC - news) 245.27 points higher at a record 13,275.76 banknote printer De La Rue (Other OTC: DELRF - news) was among the best performers and jumped 51½ to 953½p. Despite saying it still faces stiff competition from rivals and pressure on prices, the group remained “confident” it would meet its 2013-14 operating profit target of more than £100m. Shares in the company took a hit in November (Xetra: A0Z24E - news) after warning that “significant orders” had been delayed, but yesterday De La Rue said that some of them had now come through.

Communications group KCOM (LSE: KCOM.L - news) also gained 5.1 to 77p. The company reiterated its pledge of 10pc dividend growth for the current financial year.

“We believe that there should be scope to continue with a progressive dividend policy,” said Lawrence Sugarman, analyst at house broker Liberum Capital. “As we have said previously KCOM should be capable of delivering more than £30m of underlying free cash flow in the medium term and that this should be a decent medium term target for the dividend payout.”

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