Small Talk: Britain's SocialGo hopes to take a leaf out of Facebook

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The Independent Online

Social networks have transformed the way that we interact with each other. From Facebook to LinkedIn to Twitter, they have brought millions of people new ways of making friends, finding jobs – or just spreading gossip in 140 characters. In the process, they have also made their founders and early investors very, very rich. Thus far, however, the big winners have sprung from the other side of the Atlantic. The US has led the way, building on years of experience in spawning high-tech start-ups and easier access to venture funding.

But last week, investors in London got the chance to back a British horse, the aptly named SocialGo, which announced a placing to raise around £1.3m on Thursday. The firm, quoted on the London-based, Alternative Investment Market (Aim), is a bespoke Facebook. Sign up, and it allows you to set up your own social network, giving you the chance to pick everything from the look and the features to the all-important privacy options. SocialGo pitches itself as flexible enough for its service to work for everyone from a business looking to strengthen bonds with its customers, to a novice seeking to start up a private network to bring together a book club.

The company has some high-profile users. There is the leading commercial casting agency in the US, which uses SocialGo to spread the word about new opportunities and allows recruiters and candidates to communicate via blogs, forums and similar. There is Villepincom.net, the campaign site for the former French Prime Minister Dominique de Villepin's bid to win the presidency in next year's elections. And there are household names such as Levi's and Random House.

The company generates its revenues via subscriptions. Paying removes adverts and brings users a whole host of features beyond the basics available in the free version, including the option of running their own advertising. The extra twist is that, while the platform can be used to set up self-contained sites, SocialGo also allows customers to tap into their Facebook and Twitter accounts, syncing information and giving users the chance to combine the benefits of customised private networks with the opportunities of vast public networks. Take-up has been promising, the company says. So far, more than 7,000 sites are being set up each month. In revenue terms, the US accounts for some 60 per cent of the business, while the UK makes up for 20 per cent. Fittingly for a tech start-up, SocialGo's chief executive, Alex Halliday, is still in his twenties. But the firm also boasts some experienced hands in the form of chairman Dominic Wheatley, the co-founder of Domark, the video games company that he later reversed into Eidos. Vikrant Bhargava, co-founder of Party- Gaming, is a non-exec director.

The funds from the placing will be invested in the launch of a new version of the SocialGo platform, which is out in the middle of this year. This is clearly one to watch.



Nighthawk Energy

The first ever reserves and resources study of Nighthawk Energy's much-trumpeted Jolly Ranch shale oil project in Colorado could be published as early as next month, putting a formal valuation on the key asset of a company rocked by share-price falls and management changes.

The Jolly Ranch reservoir simulation study from Schlumberger, from which Houston-based Gaffney Cline will develop the reserves and resources estimates, was submitted in late January.

The Gaffney Cline report will be a major milestone for Nighthawk, which saw founder David Bramhill step down last September amid a storm of vitriol on investor bulletin boards. Mr Bramhill's successor as chief executive, Tim Healey, set about streamlining operations, selling out of non-core projects and announcing a £65m writedown in November, to be included in the group's interim results in March.

Without the distractions of other projects, Nighthawk can focus all its energies on Jolly Ranch – a vast, 410,000-acre tract equivalent to the area inside London's M25 ring road. There are already 19 wells on the site. But the key to extracting shale oil is to establish the details of the "fracking" process needed in each particular geology.

There are early estimates of the quantity of oil at Jolly Ranch. The Schlumberger report sent to Gaffney Cline estimates 32,000 barrels of oil in place, with a recovery rate of 7.5 per cent – 14 times higher than previous estimates.

The Schlumberger model is based on only a very small area of the acreage but, assuming broadly uniform distribution, the report implies in the region of 13 billion barrels of oil in place across the whole Jolly Ranch project, of which something like 975 million could be recoverable, the company says.

That said, the reserve figure from Gaffney Cline is likely to be small, given the low level of production. The "contingent resource" number is the one to watch, because it will give the first formal clue as to what could be unlocked, contingent on enough capital to do it.

"It's a very important milestone on the way to consolidating the value in Jolly Ranch," Tim Healey said. "It's also an important step in the development of the company, allowing a line to be drawn in the sand and setting a benchmark from which we can grow."



Manroy

It has been quite a week for Britain's only maker of machine guns. Manroy raised £6m when it listed on Aim just before Christmas. The value of the company then shot up by a fifth in a single day last week, with the publication of a first set of annual results showing pre-tax profits of £2.8m in the year to the end of September, slightly ahead of warranted profit estimates of £2.5m.

Manroy has expansion in its sights. The flotation was the brainchild of chief executive Glyn Bottomley, a former soldier with 25 years' experience in the defence industry. Mr Bottomley bought a 51 per cent stake from Manroy founders Madeleine and Roy Swainbank for £1.5m in 2008. With him, he brought design innovation – in the form of a quick-change barrel system to deal with the problem of overheating – and a major growth plan.

The listing is just the start. The group can already assemble up to 100 weapons each month at its East Sussex factory – including both the Heavy Machine Gun (HMG) that is its signature product and the lighter General Purpose Machine Gun (GPMG) – to fulfil sales contracts of which 90 per cent are with the Ministry of Defence.

Not only has Manroy now acquired space to expand capacity, it is also gunning to boost export sales above 10 per cent and last month signed a new contract to supply a Middle Eastern government.

Given the Coalition Government focus on British manufacturing and export-led growth, Manroy may find itself in a sweet spot. There certainly seems little danger of the world running out of its appetite for guns.

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