No Pain, No Gain: Hope of second time lucky for Bolivian bonanza

Some companies, rather like individuals, are born survivors. Take the Dublin-based exploration group Pan Andean Resources (PAR). Once it appeared to be a busted flush. Yet it is now profitable and last week disclosed it had encountered "significant gas shows" at a field in Bolivia.

The shares made headway as the stock market applauded the South American strike by the Irish explorer. But longstanding shareholders could be forgiven for hoping history is not about to be repeated.

For PAR has an unenviable distinction. A dozen or so years ago, its shares suffered what must be one of the most spectacular one-day falls in the history of the stock market. One minute they were nudging 140p; the next they were struggling to remain above 30p. It was oil - or rather the lack of it - at a much-trumpeted Bolivian field that did the damage.

All the signs were that PAR was onto a winner. For months, investors had become increasingly excited about the potential of its Bolivian adventure. Rumours filtered from the jungle indicating a rich discovery. The shares made inexorable progress. Then an investor made an out-of-the-blue telephone call to the oilmen. He hoped to glean the extent of the find. Instead he discovered the well was dry. The company was flabbergasted. It had been awaiting confirmation of a strike. Eventually it issued a statement saying the oil had "migrated". The Bolivian adventure was over and PAR would apparently never explore again. But the chairman, John Teeling, and his team continued to prospect. They also built an income-producing business to go alongside what is an increasingly interesting collection of exploration sites. And in Bolivia these days PAR has a powerful friend: British Petroleum. Profits have hit £1.2m and expansion talks are in progress. The shares have, of course, never returned to their earlier, illogical, peak. They are now about 23p after plumbing 9p.

I am not keen on resource shares;there have been far too many disasters. They have, however, enjoyed a great run recently, with newcomers, most with more hope than substance, receiving warm receptions. I would ignore most of them, except for in-and-out flutters. But any investor seeking a more long-term investment could do worse than descend on PAR.

There is no relationship between PAR and Ofex, except that shares of the company running the eponymous fringe share market have also experienced a dramatic collapse. Like PAR all those years ago, Ofex is in deep trouble. Without a rescue deal, it would have run out of cash next month. Such an event would have been disastrous for investors holding shares in Ofex-traded companies. The City's third market started life when the London Stock Exchange abandoned the old matched-bargains facility, which had existed for decades, to accommodate companies that could not, or would not, join the main share market.

So Ofex (Off Exchange) was born to cater for such businesses. It also set about attracting more adventurous operations that were ill-equipped for a stock market presence. At first it thrived. And when, last year, shares in Ofex itself arrived, paradoxically on the rival Alternative Investment Market (AIM), it looked as though the third tier was set to become a significant share platform. A subsequent cash-raising exercise, combined with the arrival of the ex-AIM man Simon Brickles and the serial investor Luke Johnson, seemed to confirm its progress. But when the expected flood of new recruits failed to materialise and many constituents moved to AIM, revenue fell well below target. To add to the discomfort, costs spiralled and Ofex suddenly encountered the pressures many of its less successful constituents had endured.

A cash injection was necessary, not only for the company to survive, but possibly the market as well. It would seem the Jenkins family, which created and managed Ofex, will have to accept a reduced role. When Sid Jenkins started his stock-jobbing firm in 1948 he was a "diamond geezer" in a world dominated by the "old school tie" brigade. He thrived by dealing in out-of-the-way shares - Arsenal FC (an Ofex constituent) was one. His sons, Tony and John, continued the business but sold out at the time of the Big Bang market reforms in 1986. John resurfaced with a share-dealing firm and later created the Ofex market. At one time its capitalisation was £2.5bn. Now it is £1.67bn and companies continue to leave - with few replacements in sight.

I believe, as with PAR, the Ofex story will continue. But the shares, which at the start of the year looked attractive, are now only for brave gamblers.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
News
Jerry Seinfeld Comedians in Cars Getting Coffee
peopleSitcom star urges men to be more supportive of women than ever
Life and Style
Living for the moment: Julianne Moore playing Alzheimer’s sufferer Alice
health
News
Jay Z
businessJay-Z's bid for Spotify rival could be blocked
Sport
footballLouis van Gaal is watching a different Manchester United and Wenger can still spring a surprise
News
The spider makes its break for freedom
VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Evening Administrator

    £8 per hour: Recruitment Genius: This Pension Specialist was established early...

    Guru Careers: Executive Assistant / PA

    £30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

    Ashdown Group: Graduate Application Support Analyst

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Reach Volunteering: External Finance Trustee Needed!

    Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

    Day In a Page

    War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

    Baghdad fights to win back Tikrit from Isis – but then what?

    Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
    Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

    What is it like to live with Alzheimer's?

    Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
    The Internet of Things: Meet the British salesman who gave real-world items a virtual life

    Setting in motion the Internet of Things

    British salesman Kevin Ashton gave real-world items a virtual life
    Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

    Election 2015: A dead heat between Mr Bean and Dick Dastardly!

    Lord Ashcroft reveals latest polling – and which character voters associate with each leader
    Audiences queue up for 'true stories told live' as cult competition The Moth goes global

    Cult competition The Moth goes global

    The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
    Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

    Pakistani women come out fighting

    Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
    Leonora Carrington transcended her stolid background to become an avant garde star

    Surreal deal: Leonora Carrington

    The artist transcended her stolid background to become an avant garde star
    LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

    Education: LGBT History Month

    Pupils have been discussing topics from Sappho to same-sex marriage
    11 best gel eyeliners

    Go bold this season: 11 best gel eyeliners

    Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
    Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

    Cricket World Cup runs riot to make the event more hit than miss...

    The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
    Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

    Katarina Johnson-Thompson: Ready to jump at first major title

    After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot