Small Talk: 'Big Daddy' of oil wells is resurrected
Monday 04 August 2008
In Texas, they are calling it the "Big Daddy". Aim-listed Energy XXI, an oil and gas exploration company in the Gulf of Mexico, is set to drill the world's deepest ever well, at 35,000 feet. The whole operation seems to be potentially expensive, but Energy XXI is adept at utilising what others have left behind. The company, with its partners McMoran Exploration and Plains Exploration and Production, is picking up where Exxon left it, drilled at 32,500 feet several years ago. Now that oil is rocketing again, even if it has dropped off a little in the last few weeks, such abandoned sites are suddenly becoming economically viable again, even if the fields require 35,000ft wells.
West Virginia deal may be a steal as coal comes back into fashion
Much like David Hasselhoff, big hair and white wine spritzers, coal was an indelible part of the 1980s. Now it is back in fashion.
As the price of energy soars, so power companies are increasingly becoming tempted to start burning more coal to generate electricity. While this will infuriate and frustrate those who are forever telling us all to switch to greener energy sources, for some it could soon be once again time to start oiling the drills.
This makes coal mining companies attractive as buyout targets, especially as their assets are set to become more valuable.
Quick out of the blocks is Cambrian Mining, which on Friday finalised the takeover of the Alternative Investment Market (Aim) listed Coal International, both of which have the majority of their interests in West Virginia, in the US. The deal, worth £56m, offers Cambrian, which already owned 34 per cent of the Aim-listed group before the deal, "increased direct ownership of coal reserves and production", they say.
The opinion of the environmental lobby aside, this may end up being seen as a shrewd bit of business by Cambrian. If energy prices stay high, coal will become very popular again. That could make the deal for Coal International look like a steal.
Dermatology specialist York offers investors a safer haven
Pharmaceutical companies have been going through the wringer in recent years as the search for new blockbuster drugs has yielded little that can be considered fruitful, while the generics firms have started to eat away at existing patents.
However, to the average terrified investor, the sector now offers something of a safe haven, away from the horrors of the retail and financial markets, to name just a couple.
That is maybe why investors were happy to stump up the cash for the Aim-listed dermatology group York Pharma when it said last month that it wanted £3.9m to help buy Flammazine and Flammacerium, two dermatology and wound-care products developed by Solvay Pharmaceuticals. The placing was completed last Friday, and the total cost of the deal is €28.5m (£18.5m).
A lot of smaller pharmaceutical groups have struggled to get investors interested in recent years, especially as the majority tend to raise huge amounts of money for early stage trials only to get the whole thing wrong, burning the fingers of subsequently reluctant backers. York, which was only formed in 2003, seems to have avoided these pitfalls so far: good news for a company that has ambitions to break into the global $10bn ($5.1bn) dermatology market.
Toluna balloons with democratic values
In the UK, Toluna is considered a French company. In France, it is seen as being more English than French. It does not really matter to the chief executive, Frederic-Charles Petit, who incidentally describes the Aim-listed online market research group as an "international" firm. Indeed, M. Petit is more concerned with running Toluna, which has made dramatic progress in recent years.
The group was last month named as the fastest-growing company in France by business magazine L'Entreprise, after recording revenue growth of 970 per cent since 2004.
All this is good news for the company, which reckons it happened upon a clever idea when it was formed in 2000. Toluna manages what M. Petit describes as communities, currently totalling more than 2.5 million members, which discuss events and issues. The likes of the biggest online market research firm, YouGov, pay Toluna to use its communities as panellists for polls, or to collect the data the communities generate. As membership of a community is voluntary,M. Petit describes the process as the "democratisation of research".
The group, which reckons that being listed on Aim is "good for discipline," is 50 per cent owned by fellow Aim-listed company Eurovestech, a technology investment group led by a former Schroders analyst, Richard Bernstein.
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