Shares in African oil minnow surge on market debut

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The Independent Online

Shares in the latest speculative resources venture to join the AIM market almost tripled from their placing price yesterday, as the boom in commodities prices enticed private investors into the sector.

Afren, a small west African oil firm with a former Opec secretary general as a director, leapt to 56.5p in busy trading, having raised £8m in a placing at 20p per share. The company's value surged to £73m.

More than 70 oil and mining firms have listing on AIM in the past year, compared with about 20 in the previous 12 months.

Afren is a shell company whose first acquisition, of an interest in a Nigerian oil field, is due to be completed soon. The company has agreed terms with Energy Equity Resources (EER) of Norway that will give Afren a share in the profits from EER's stake in an offshore Gulf of Guinea oil block, in return for helping to finance the development of the field. ExxonMobil and ChevronTexaco have large stakes in the block, which sits in a zone controlled by Nigeria and Sao Tome.

Afren said the positive market sentiment toward the natural resources sectors was part of the reason why it chose London, and also for the success of its listing, but it added the share gain also reflected market faith in the quality of its sole oil interest and management.

Bert Cooper, a director and long-standing Liberian entrepreneur, said: "We believe we have brought together one of the most experienced oil and gas teams within Africa which, combined with an excellent first asset opportunity, positions Afren to become a leading pan-African oil and gas exploration and production company."

Other directors include Egbert Imomoh, a former deputy managing director of Shell in Nigeria, and as a non-executive director, Rilwanu Lukman, a former chairman and secretary general of Opec.