Premier Oil remains burdened by the tag of the stock market’s “unlucky” explorer. Unlike Cairn Energy, Tullow Oil, or the now-acquired Burren Energy, Premier has become stuck in the second division, lacking the sort of transformational discovery that would multiply its reserves and seize investors’ imagination. But on the basis of yesterday’s half-year trading update, there are reasonable grounds to assume that Premier’s luck could be about to change.

For a start, in May’s acquisition of the North Sea interests of Oilexco, the company has shown its dexterity in picking up cast-off assets on the cheap. Aided by the disinterest of the oil majors in what might be considered peripheral fields and the inability of smaller rivals to obtain finance, Premier acquired Oilexco for a modest $505 million. Not bad for a company with 60 million barrels of oil equivalent reserves and tax losses of $1.1 billion. The deal, which took only three months to complete, doubled Premier’s production from the North Sea — Oilexco added 13,000 barrels of oil per day — and trebled its reserve base in an area adjacent to its existing acreage. It also brought much-needed balance to Premier’s portfolio, previously dominated by its interests in Indonesia and Vietnam.

Second, a period of relative inactivity has enabled Premier to take advantage of the fall in operating costs that have accompanied the slide in crude from last summer’s $147-a-barrel high. This is most evident in its Gajah Baru field in Indonesia’s Natuna Sea. The engineering and procurement contract for the platform, which is scheduled to begin supplying gas to Singapore in 2011, was re-tendered and came in $100 million cheaper than originally forecast. Similarly, the daily rate for renting rigs in the region has collapsed from about $230,000 to $130,000 over the same period.

Third, and most compelling, Premier’s near-term exploration schedule is busier than at any other time since its current management assumed control four years ago. Drilling at its Frida prospect offshore of Congo Brazzaville will begin within a fortnight, with further wells planned in Indonesia, Norway and Pakistan in short order. Indeed, Premier’s three material discoveries in the first half of this year, including Ca Rong Do in Vietnam and Grosbeak in Norway, raise hopes for more of the same.

With production of 50,000 barrels a day providing steady cashflow, a strong balance sheet, and scope for more opportunistic deals in the North Sea and Asia akin to Oilexco, the shares, at £10.50, or a 25 per cent discount to most estimates of net asset value, are a buy.

Begbies Traynor

Owning shares in an insolvency practitioner might sound like a one-way bet amid the worst recession since the Second World War.

Not in the case of Begbies Traynor, which, somewhat counterintuitively, has halved in value since last summer’s high. Not that there was much wrong with yesterday’s figures. Full-year revenues up 29 per cent, pre-tax profits ahead 40 per cent and the dividend raised 12 per cent.

True, Begbies’s non-insolvency activities, tax services and corporate finance, which account for one fifth of sales, were weak and are expected to remain so. Begbies advises on deals in the £2 million to £20 million range but capital constraints mean that M&A activity there is as moribund as farther up the scale.

That also applies to tax work, the discretionary side of which tends to be driven by deals.

In insolvency, all is going to plan. Begbies was appointed to 1,800 corporate cases over the year, which, combined with better economies of scale, helped divisional profits up 51 per cent.

The problem is that the insolvency work is not coming in as fast as last summer’s share price, a forward rating of 22 earnings, would suggest. But history tells that insolvency work keeps flowing long after a recession has ended. The average case duration — about three years — also indicates that Begbies will be busy for some years to come. At 99½p, or 11 times earnings, hold on.

Computacenter

Profit warnings supposedly come in threes. So, on the evidence of Computacenter, do profit upgrades. Yesterday the IT reseller increased its earnings forecasts for the third time in six months. Strong growth in contracted services and better than expected cost savings mean that full-year pre-tax profits are expected to be in the region of £48 million, £10 million higher than at the start of the year.

The shares have responded accordingly, gaining 131 per cent since January (when Tempus advised “buy”) and regaining the company its place in the FTSE 250. Part of that rerating reflects the transformation of Computacenter’s business: a shift away from its traditional low-margin niche of reselling computer hardware towards the provision of higher-margin services — managing companies’ desktop PC networks, telecoms infrastructure and IT helpdesks. This year, for the first time in its 28-year history, the company’s gross margins from services will exceed those from hardware.

But that switch has coincided with a recession that has pushed more companies in Computacenter’s direction. Whereas the sort of annual savings that managed services can offer might appear marginal in better times, they become key to preserving profitability when trading gets tough.

So it is that Computacenter’s contracted revenues from such services have risen 10 per cent on the year to £510 million, helped by wins from Hays and Nationwide. At nine times earnings, and yielding 4 per cent, the shares remain inexpensive. But on the principle that big profits should be taken where they fall, 206½p looks a good point to sell.

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