British-Borneo `tar' find puts skids under oil sector; MARKET REPORT

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The Independent Online
Oils, after a gushing performance, are under pressure as crude prices hit a nine month low. With high-flying British- Borneo Petroleum Syndicate coming to grief after a disappointing drilling report, the sector suddenly looks vulnerable.

British Petroleum, riding at 748.5p earlier this year, fell 13p to 670.5p and Shell lost 8p to 1,033.5p. Oils underperformed the rest of the stock market with most in ragged retreat.

It was all so different from the heady days when the crude price pushed relentlessly higher and takeover speculation engulfed the sector.

Although there was a sprinkling of takeover activity - Gulf Canada's successful pounds 494m strike for Clyde Petroleum was the main event - the bid talk has died down as a host of rumoured foreign predators have resolutely stayed at home.

Lasmo, where some analysts have signalled a 300p target, fell 6p to 218.5p; it hit 262.5p in January.

British-Borneo tumbled 148.5p to 1,391.5p after revealing one of its Gulf of Mexico prospects had produced poor returns - oil, in the words of one analyst, "like tar".

The group's meteoric ascent lifted the shares from 483p in the past year and from 103.5p over five years.

The only leading group to make progress was Enterprise Oil, up 4.5p to 620p despite sell advise from Merrill Lynch.

The rest of the market spent another day waiting and watching New York. The unpredictable non-farm payroll figures for once had little impact but the Dow Jones Average, during London opening, had another bumpy ride as sentiment was undermined by earnings downgrades for blue chip IBM.

After scoring a 33-points advance Footsie settled for a 22 gain to 4,236.6 in rather lacklustre trading.

BG, once British Gas, was the best-performing blue chip with a 6.5p gain to 173.5p. The shares have blazed 15p this week on reports, first in the Independent, that the Monopolies and Mergers Commission may back the company rather than regulator Ofgas.

The MMC is due to report on the controversial Ofgas pricing proposals later this month.

The gas group was also drawn into the current euphoria for utilities as the threat of the proposed Labour windfall tax is submerged by suggestions it will not be too draconian and is already factored into prices.

National Power gained a further 9p to 505.5p and PowerGen 7.5p to 616p. Thames Water rose 10p to 676.5p and Yorkshire Water splashed 19p higher to 350p.

The Rolls-Royce engine deal with Delta Airlines and hopes it is near to selling its Parsons side lifted the shares 8p to 245p. Tomkins, the buns to guns conglomerate, added 5p to 274p as SBC Warburg suggested a 316p a target.

Sears, the struggling retailer, was again briskly traded with break-up bid stories still going the rounds. The shares put on 1.5p to 75.5p.

The latest twists and turns in the Thomson-CSF affair lowered General Electric Co 4p to 382.5p.

Drew Scientific had another upbeat day, gaining 32.5p to 195p after touching 240p. The slowdown was prompted by cautious noises from stockbroker Wise Speke. Drew has surged from 20p this year, prompting the company to reveal it is seeking to use its technology for heart disease.

The stampede to find the next health high-flier lifted Tepnel Life 16p to 76.5p and even touched struggling Haemocell, up 0.5p to 5.75p.

NFC, the old National Freight Corporation, had a bumpy ride, falling 7.5p to 153.5p as BZW said sell. Inchcape, the international trader, gained 10p to 262.5p as UBS turned positive.

Bickerton, a builder, arrived on AIM at 42p from a 40p placing. Torch, an insurance group. also made its debut via an introduction, trading at 107.5p. In November stockbroker Raphael Zorn Hemsley placed shares at 100p. Oxford Technology, placed at 100p, ended at 95p.

Cementone, the paint group, was again brushed by the arrival of the founder of Blenheim Exhibitions, Laurie Lewis who has a near-30 per cent interest. The shares rose 8p to 68.5p and the warrants 2.5p to 22.5p. At the start of the year the shares were 25p and the warrants stuck at 4.5p until last month.

Pathfinder Properties turned in another robust performance, up 8p at 50p. But SR Gent, as some grew tired of waiting for the long mooted bid, fell 7p to 57.5p.

Brewer Gibbs Mew frothed 14p higher to 250p on director buying and Flying Flowers put on 17p to 272.5p following a positive statement.

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