Will White Nile investors get that sinking feeling?

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The Independent Online

Today's long-awaited return from suspension of White Nile is without doubt going to be the event of the week for those who follow the world of smaller companies. Most market professionals predict that shares in the oil explorer will tumble this morning, probably to about the 60p level. They note that since trading in the group's stock was halted in March, investors have lost their ardour for oil and gas exploration plays.

Also, White Nile's cause has not been helped by last week's disaster at Regal Petroleum, where the failure of a drilling programme in Greece left the company nursing a 60 per cent drop in its share price.

General market sentiment aside, merely reading through the document White Nile published last week in relation to its acquisition in South Sudan it is not difficult to conclude that it is among the most risky enterprises listed on AIM. Now that the deal is complete, White Nile owns 60 per cent of Block Ba, which contains part of the Muglad Basin in southern Sudan and is believed, by the company, to be rich in oil. In return, the newly formed government of South Sudan will control 50 per cent of White Nile via its national oil company Nile Petroleum.

So far so good. Now for the risky stuff. First, South Sudan is, to put it mildly, a fledgling state, the product of an uneasy peace accord which was signed in January of this year and ended years of bitter civil war. But the peace can collapse at any time. Second, the country's national oil company, Nile Petroleum, which is now White Nile's majority shareholder, is incorporated in the South Sudanese town of Yei and it is very debatable whether the local legal system is advanced enough to govern it.

Third, there is the issue of Total's claim over Block Ba. Last week's document from White Nile not only highlights the danger that the French oil giant might start legal proceedings against White Nile, but also raises the possibility that "there may be over parties who will also seek to make claims over Block Ba".

Finally, there is the key question of how White Nile plans to finance the costly process of getting the oil out of the ground and taking it to market. The group has only £9m of cash while analysts estimate that to build a pipeline to the nearest port (Mombasa in Kenya) will cost more than £1bn alone.

Should White Nile, which was suspended at 138.5p, see its shares drop to 60p, the company will still be worth around £190m. However, given the above risks, even this may prove to be too rich a valuation.

BioProgress chief

Word has it that BioProgress will today appoint Richard Trevillion as its chief executive. The group named him interim CEO following the resignation of Graham Hind in April.

BioProgress shareholders will hope that Mr Trevillion can bring some stability to the company. Since the start of the year the stock has pretty much halved. It was knocked at the start of April, when the group launched a strategic review and complained of poor trading and increasing overheads.

Ceres powers up

Finally, readers should keep an eye on CeresPower today. The group will boast of a further breakthrough in the development of its fuel cell technology. Ceres can now produce fuel cells four times bigger than before, which dramatically reduces manufacturing costs but boosts their power output. These cells are designed to go into home boilers to produce electricity as well as heat.

Batteries developer poised to plug into AIM

Jumpit, a Norwegian developer of disposable and rechargeable batteries for use in mobile phones, iPods and other handheld devices, will this week announce plans to float on AIM. The group hopes to be listed by June. It plans to raise £3m of new money and allow some of its existing shareholders to cash in on their holdings.

Jumpit has developed innovative battery products for mobile phones and iPods. It intends to focus on managing the intellectual property rights to this portfolio. Manufacturing, marketing and distribution are all to be outsourced to long-term partners. Globally, the mobile phone market is expected to boast 2 billion subscribers by 2006, while the number of iPods shipped in the first quarter of this year stood at 5.3 million.

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