No Pain, No Gain: It's worth a gamble on Britain's own oil potential
Saturday 24 September 2005
The sky-high crude price is bound to intensify the search for oil with more exploration ventures arriving on the stock market. Some investors will benefit; others will, as so many black gold enthusiasts before them, end up with little or nothing to show for their speculation.
There is no doubt, unless other fuels are successfully developed, that more oil must be found. With Britain's economic growth predicted to falter because of the runaway price, Chancellor Gordon Brown has urged oilmen to greater efforts. And, ever willing to get involved in popular crusades, Sir Richard Branson has let it be known that he is exploring the possibility of joining the oil rush and may even build refineries.
The major groups, British Petroleum and the rest, are already enjoying a veritable bonanza from the continuing high price. So are many smaller players. Shares of Burren Energy, with interests in such out-of-the-way countries as the Congo and Turkmenistan, have climbed more than sixfold from December's flotation price. It is producing oil and enjoying spiralling profits. But there have been casualties. One that has failed to cover itself in glory is Regal Petroleum .
I'm afraid many of the minor oil (and mining) shares that have cascaded onto the junior Alternative Investment Market (AIM) in the past year or so will be huge disappointments. So will many of those that take up the call to oil in the coming months. Indeed, it is worth remembering that some exploration shares have been drifting around for years, with their success measured by the number of times they have tapped shareholders for more cash.
As readers know, I am not a fan of smallcap exploration companies. Too risky, I feel. Often, only the nimble-footed investor achieves satisfaction. For every prosperous vehicle, there is a clutch of cash-absorbing no-hoppers. However, in the present highly charged climate surrounding oil shares, investors will be tempted to chance their arm. I am, therefore, offering a share for their consideration.
The company is called Oil Quest. In an international business that seems to specialise in the back and beyond, it has the distinction of concentrating its endeavours in and around Britain. David Bramhill, a resources man who has been round the block a few times, is the guiding light. The shares have been as high as 31.25p this year; they are now 16.5p, capitalising the operation at £7.3m.
Bramhill first felt the attraction of the oil industry as a 16-year-old apprentice with Rotork, the engineer. But it was not until 15 years ago that he became directly involved in an oil exploration enterprise, joining the board of Pan Andean, one of the companies in the orbit of Irish entrepreneur John Teeling.
Pan Andean, which produced a £1.2m profit last year, has its own distinct place in recent oil history. Some years ago its shares romped ahead to 138p, as excitement mounted that it had made a rich strike in deepest Bolivia. But the oil had "migrated" and in a few hours the shares crashed to around 30p. The current price is 11.5p.
Later, Bramhill was behind the development of two mining companies - Cambridge Mineral Resources and Hereward Ventures. He has also been involved in resources developments in and around the Falkland Islands. Now Oil Quest, a transmogrified Hereward, is his baby.
So far, it has not found any oil. Indeed, an Isle of Wight venture has just been abandoned. But it has other promising investments in the South (some not far from the highly successful Wytch Farm oil field) and the North-east, as well as a 30 per cent interest in a North Sea block. The Oil Quest policy is to take minority stakes in exploration ventures. Ideally, it likes to become involved when much of the groundwork is completed - thereby reducing costs. In addition to the North Sea block, the company has interests ranging from 5 to 20 per cent in 13 British locations.
It has some £3.2m in the bank and, as a legacy of its gold exploration days, a 7 per cent interest in Cambridge (worth some £500,000). It is a slow-cash-burning and tightly run operation, and could well hit oil long before it is forced to tap shareholders.
Its chairman, Michael Thomsen, also head of Cambridge, describes Oil Quest as a "solid, no-frills junior oil company". One day it should add production to exploration.
With high crude prices likely to be a long-term influence, more home-grown oil would be a bonus for Britain. There could be much more lurking in and around this country, surely one of the safest areas on earth for intrepid explorers. Oil Quest is, I believe, one of the most promising players in this volatile industry and is worth a modest flutter.
Debt in Britain: Numbers seeking help on how to cope with mounting bills goes up by more than half in three years
Bargain Hunter: BT improves its mobile reception with 'incredibly competitive' deals
Questions of Cash: Why was my case ignored by My Civil Service Pension?
Offset your mortgage and save thousands
Women to lose benefits from contracted-out pension scheme
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Yorkshire man to win £10,000 off a £1 bet placed six years ago if Dan Jarvis becomes Labour Party leader
- 3 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 4 Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
- 5 The West has it totally wrong on Lee Kuan Yew
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
The West has it totally wrong on Lee Kuan Yew
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...
Day In a Page
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station