pounds 55m Ramco bid for JKX frees Horton from second fiasco

Sir Robert Horton, the Railtrack chairman and former chief executive of BP, was yesterday bailed out of a second fiasco in the oil sector when JKX Oil & Gas, a more recent oil venture of his, succumbed to a pounds 55m bid from rivals Ramco Energy.

The all-paper offer of one of Ramco's shares, listed on the Alternative Investment Market, for every 25 in JKX values the latter at 47.5p a share. Shares in JKX jumped 3.5p to match the bid terms yesterday, while Ramco moved ahead 30p to pounds 11.875.

The agreed bid marks the end of an unhappy stock market career for the group chaired by Sir Robert, ousted from BP in 1992. It was launched at 190p a share two years ago and the price initially soared to 226p on euphoria that JKX would cash in on existing oil and gas reserves in the Ukraine and Georgia.

In the event, the group was dogged by disaster, including the revelation that Peter Young, the disgraced former fund manager at Morgan Grenfell, had acquired a 19 per cent stake for his funds.

More fundamentally, it took much longer than expected to build a profitable business in the politically-troubled south-western corner of the old USSR. Production, currently close to 11,200 barrels of oil equivalent a day, has not lived up to initial expectations and the failure of a large customer to pay for gas meant most production had to stored last year.

Yesterday it emerged that the group's joint venture with the Ukrainian government, the Poltava Petroleum Company, had suspended oil and gas supplies to another customer which had been overdue with payments in March and has still not paid up.

The Ramco deal, accepted by holders of 26 per cent of the shares, comes after a rescue rights issue raised pounds 14.2m in March at 34p a share mounted by new management. In February, the then chief executive, David Robson, was replaced by Bob McCrackin, formerly with Mobil. The group also revealed that pre-tax losses had risen from pounds 2m to pounds 2.4m last year, despite a jump in turnover from pounds 2.1m to pounds 15m.

In June, JKX announced that it had signed a new deal to deliver gas to six regional gas distributors in the Ukraine, which has resulted in payments totalling some $746,000. However, the directors said yesterday that "further political and economic change in Ukraine could continue to make operations in Ukraine difficult for JKX and place considerable demands on its resources in the long term". As a result, they had entered the discussions with Ramco.

The takeover is unlikely to lead to a bonanza for the JKX board, which collectively owns just 92,700 shares.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power