- Tower Resources [LON:TRP] was down in late trading after the Africa-focussed oil and gas explorer said it was taking steps to adjust to the current adverse oil sector market conditions.

The company says it believes that underlying market conditions will improve over the next couple of years, and sentiment will follow.

It says the question is how best to position the company for this environment, not merely to manage through it but also to take advantage of the opportunities it creates.

Tower says it has a good portfolio of licence interests in hand and in the pipeline, in several promising areas.

The company says its strategy is as follows:

· To maintain and even expand our license portfolio while minimising forward commitments and costs

· To seek opportunities through asset or corporate transactions in order to optimise the portfolio and further reduce overall costs

· To farm-out where appropriate some of the costs of those commitments that cannot be deferred

Chairman Jeremy Asher said: "Our portfolio now has limited financial exposure with no drilling commitments. Our discretionary work programs have been cut and focused onto work related to farming out when conditions are favourable or on post-well analysis.

"Group costs are adjusting accordingly. Our current cash balance remains in excess of US$4 million even after paying in full for the Kenya well.

"The board fully recognises the current adverse sentiment towards the sector and to exploration in particular. We are fully aligned with other shareholders, most of us having personally made large cash investments in the company. The pre-drill potential of the high-risk prospects drilled in Namibia in 2014 and Kenya in 2015 were validated in both cases by the entry into those blocks of large, well-respected and successful international companies with strong exploration track records, and offered enormous potential upside to shareholders. They were not successful, but we are reviewing the implications of these results for those blocks, where untested targets still remain.

"With the current devaluation of exploration assets in the market, we are all suffering substantial losses and discounts to asset values. However, we also know that exploration is a long-term activity and rarely lacks painful moments. We will continue to work our way through this downturn to achieve success.

"We have been through cycles before, and we are confident that the sector sentiment will change in due course. This is a time of especially rapid change and volatility, which we think has, led to a short-term undervaluation of exploration assets. We are very alive to the opportunities for consolidation, as well as the attractiveness of building a wider low-cost, low-commitment, high-impact exploration portfolio at this time. Our team has already proved its deal-making abilities and I believe these will allow our company to deliver a better outcome for shareholders looking forward."

* * *

Dragon Oil [LON:DGO] has set up an independent committee to evaluate the approach by Emirates National Oil Company.

ENOC confirmed earlier this week that it had made an approach about a potential offer for the Dragon Oil shares that it does not already own.

Goldman Sachs has removed Dragon Oil [LON:DGO] from its much heralded conviction list, given the relative outperformance of the shares.

While maintaining a 'buy' rating, the City heavyweight pointed out that the stock is up 24.4 per cent (versus the FTSE World Europe's 7.3% rise) since being added to the list, on 2 January 2015.

The broker said: "Recent outperformance has been driven by the announcement that the Emirates National Oil Company (ENOC) has made an approach for Dragon.

"According to news reports, ENOC confirmed an approach was made on March 15, 2015 and that the approach was at a premium to the closing share price of £5.09 on March 13, 2015."

Analysts have increased their 12 month price target to 665 pence per share (from 621 pence), implying 9 per cent upside.

Separately, Citigroup repeated its 'buy' recommendation (target price left unchanged at 659 pence a share) in a note to investors, yesterday, stating that ENOC's approach highlights DGO's attractiveness as an asset.

The broker also put forward a number of arguments to back up its opinion that ENOC is likely to proceed with a firm offer this time around.

* * *

Falkland Islands Holdings [LON:FKL], the international services group which owns essential services businesses focused on transport and logistics, has sold 7.825m shares in Falkland Oil & Gas ("FOGL" ) for £2.3m.

This has generated a profit of £0.7m for the Group and following the sale, FIH owns 5m shares in FOGL, representing 1% of FOGL's issued share capital.

The funds generated by the share sale will be available for the development of the Group's businesses.

Chairman, Edmund Rowland, said: "In the past five years the Group has directly invested over £8m in the Falkland Islands and remains committed to the development of its Falklands business. We look forward to a successful exploration drilling programme in 2015 and to the development of oil production in the Islands in due course, which will transform the value of the Falkland Islands Company.

"This latest sale of shares in FOGL will augment the Group's cash resources for further investment in its future growth."

* * *

Range Resources [LON:RRL] has issued a Trinidad operational update. Range said production increased by 23% from the previous month and testing on two wells in the South Quarry field is currently ongoing. One further well is drilling ahead in the South Quarry field.

The company said the sale of Range Resources Drilling Services Limited is on track to complete before the end of the month.

At 4:06pm:

[LON:AUR] Aurum Mining PLC share price was 0p at 0.95p

[LON:BOR] Borders Southern Petroleum PLC share price was +0.15p at 5.9p

[LON:CHAR] Chariot Oil Gas Ltd share price was -0.18p at 8.2p

[LON:DGO] Dragon Oil PLC share price was -12.5p at 590.5p

[LON:ENQ] EnQuest Plc share price was +6.25p at 40.25p

[LON:FKL] Falkland Islands Holdings PLC share price was 0p at 292.5p

[LON:FOGL] Falkland Oil Gas Ltd share price was +0.13p at 27.38p

[LON:GKP] Gulf Keystone Petroleum share price was -9.12p at 33.88p

[LON:GPX] Gulfsands Petroleum PLC share price was 0p at 27.5p

[LON:INDI] Indus Gas Ltd share price was 0p at 85p

[LON:PET] Petrel Resources PLC share price was +0.01p at 3.38p

[LON:RKH] Rockhopper Exploration PLC share price was +3.5p at 59.25p

[LON:RPT] Regal Petroleum PLC share price was -0.15p at 4.1p

[LON:TRP] Tower Resources PLC share price was -0.01p at 0.12p

[LON:XEL] Xcite Energy Ltd share price was +0.25p at 28.75p

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