Leni Gas & Oil to buy back its own shares on the cheap following the credit crunch

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The Independent Online

Leni Gas & Oil, the AIM-listed energy producer, is planning to buy back one-fifth of its shares next year.

The buyback is expected to start soon after Leni confirms that production capacity in northern Spain's Ayoluengo Oilfield, the company's key asset, has risen by 13 per cent to 15 million barrels. Market sources believe an announcement could be made within the next two weeks.

David Lenigas, the executive chairman, is expected to announce that this will increase production from 104 barrels a day to 1,000 by the end of 2009. The five-year ambition is for Leni to be a 10,000 barrels a day producer across all its assets, which also include operations in the Gulf of Mexico, Trinidad and Hungary.

A leading investor said: "If Spain gets reasonable oil returns, a share buyback scheme becomes favourable."

Like other listed energy companies, Leni's share price has been badly hit by the credit crunch. A buyback would cost around $6bn-7bn now, compared with $30bn before the market collapse.