Small Talk: Drilling for information on Falklands oil

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The Independent Online

Like night follows day, one of life's great certainties is that exploration groups listed on the Alternative Investment Market (Aim) will talk to you all day long about what they are up to. With many lacking actual oil and gas-producing assets, news flow is often the only way to bump up the old share price, you see.

That was until it all kicked off in the South Atlantic. All of sudden, there is radio silence from each of the companies planning to drill for oil around the Falklands, which has caused an almighty diplomatic spat between Argentina and the UK.

Desire Petroleum, the first to start drilling, refuses to talk at all, which is rather odd. In October 2008, the company was more than happy to tell anyone that would listen that it had contracted for the rig to be shipped down to the Falklands after penning a deal with Arcadia, a drilling outfit. It was also happy to point out the 10 per cent hike in its share price.

It is not just Desire that is monetarily mute. Falkland Oil and Gas was also unprepared to put its head above the parapet, agreeing only to speak about its planned drilling programme off the record, while Rockhopper, the company that will use the rig when Desire has finished with it, were too worried about saying anything "political".

Howard Obee, the chief executive of Borders & Southern, another Aim-listed company that is also set to begin drilling soon, did not return calls.

Desire raised £42m last September for its drilling campaign, before Rockhopper asked investors for £50m – the same amount as Falkland Oil and Gas. Borders & Southern, raised the very large amount of £113.1m to fund a three-well programme.

Desire is expected to announce the results of its efforts in about a month's time. Analysts put its chances of finding any oil at about 20 per cent.

£250m float on AIM Squarestone Brasil

*There was some good news on the economy on Friday, when the fourth-quarter GDP figures for last year were revised up from a very anaemic 0.1 per cent, to a slightly less anaemic 0.3.

Earlier last week came a sign that the economy was on the mend when Squarestone Brasil, while operates shopping centres in Sao Paulo, announced plans to float on Aim. It hopes to raise £250m, making the float the biggest on Aim for more than a year.

Squarestone's chairman, Tony Campbell, is a former deputy chief executive of Asda, leaving in 2001 when the supermarket group was bought by Walmart. He was also the man lined up to take over as the chief executive of Sainsbury's, had Delta Two, the Qatari private equity fund, taken the grocer private in 2007.

"We are delighted to be announcing this next step in the Squarestone story, which will provide a fantastic platform to exploit the compelling economic, demographic, consumer and real-estate dynamics in Brazil. A listing will allow us to continue to capitalise on the attractive opportunities already presented by the Brazilian shopping mall sector by enabling access to a broader capital base," Mr Campbell said.

CareTech is a small cap with plans to grow bigger

After taking a battering for 18 months or so, the valuation of many small caps is in the bargain basement.

For those that have emerged from the downturn with little more than financial cuts and bruises, the sniff of a good deal is increasingly tempting, especially if they can persuade shareholders to fund a war chest.

Investors in CareTech, which provides residential care for those with learning difficulties last week tapped investors for £15m to fund acquisitions. Backers are impressed with the group's recent performance, says executive chairman, Farouq Sheikh.

CareTech has grown from having 435 beds when it first listed in 2005, to more than 1,400 today. Mr Sheikh says that 64 per cent are rated "good" by the Care Quality Commission, with 18 per cent, rated "excellent".

"We are seeing more corporate opportunities at sensible prices than at any time since flotation and believe the company has a strong platform to take advantage of these at the earliest opportunity," he added. "We are delighted to welcome the support of investors for our strategy and look forward to the next phase in the development of the company."

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