Dana rolls out the barrel

The Investment Column

The former Soviet Union has been labelled as the new Wild West for investors as companies compete to take advantage of the region's vast oil, gas and mineral reserves. Dana Petroleum, which yesterday announced plans to seek a full stock market listing, is one that might attract the bolder investor.

Formerly known as Dana Exploration, the company now concentrates on the development and production of oil from fields in western Siberia.

Currently listed on the Exploration Securities Market in Ireland, the move to the main market will raise up to pounds 16m through a placing and open offer.

The shares are being priced at 7p which would value the company at around pounds 24m. The last date for applications is 22 January with dealings expected to start a few days later.

The net proceeds of the offer are expected to be almost pounds 10m which the company will use to accelerate its two main projects in Siberia and build relations with its two main Russian partners, Lukoil and Yukos.

Having moved into the Russian market early the company is keen to consolidate its position.

It has a 50 per cent stake in the South Yoganskoye field which has proven and probable reserves of 34 million barrels. It also has a 30 per cent share in another field with reserves of 57 million barrels.

Oil sales started in August but shareholders will have to be patient for their returns.

No profits or dividends are expected until 1997 but cash flow should be positive two years later.

Dana has come along way since last year when it was taken over by Tom Cross of TM Oil and the shares stood 1p. Even so, the shares are not for the faint-hearted.