Small Talk: Oil company sets its sights high in New Zealand

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The Independent Online

There is nothing quite like ambition, and the Alternative Investment Market (Aim) is brimming with it. Last week, Kea Petroleum, a group based in New Zealand, said that it had bought a 10 per cent stake in an Australian- listed group, AWE, which gives it an interest in its first offshore asset, known as Tuatara-1.

The group has also raised £7m through its backers at the Canadian bank RBC to further fund development of its three onshore fields.

Admittedly, this is all pretty run-of-the-mill for an Aim-listed exploration outfit, but Kea has only been on the public markets for three months and argues that the deal with AWE is something of a game changer.

Kea's onshore assets are predicted to land as many as 200 barrels a day, assuming that all the guesswork is correct. AWE reckons that it is sitting on a pool of the black stuff that could yield as much as 80 million barrels a year, giving Kea 8 million barrels of its own. Of course, it is very early days and all sorts if things could go wrong, but so far, so good for the group.

"We are very pleased to enter into this joint venture with AWE, [which has] demonstrated [its] technical and commercial expertise by developing and operating the Tui oil field, which recently reported passing the milestone of 1,000 days of strong production, with some $3.5bn of revenues generated in that time," said Ian Gowrie-Smith, Kea's chairman.

"In the event that Tuatara-1 is successful, we have high confidence in their ability to bring a discovery into development in an expeditious and commercially effective manner and we look forward to partnering with them in this and other exploration ventures in the future."



Plus awards

For the last two or three years, the world of small caps has suffered, possibly more than ever before. Much ink has been spilt on the market's trials and tribulations, not least in this column.

But no measure of woe will ever prevent the great and the good of the small-cap sector having a good old knees-up, however, as it did last Wednesday night at the Plus awards.

Plus, the rival market to Aim, has been making great efforts, especially under its new chief executive, Cyril Theret, to market itself as an alternative to the major small-cap index. The group has been touring the country drumming up support among investors and looking out for potential new clients.

So to the awards: it was a good evening for Juliet Davenport, the chief executive of Good Energy Group, picked up the gong for best chief executive of the year for the second consecutive time, while the title of chairman of the year was bestowed on Graham Whitworth, of Sprue Aegis.

Plus's drive for more clients is needed if the nominations are anything to go by. Ms Davenport and Mr Whitworth's companies were multiple nominees, as was Chemistry Communications. Without taking anything away from these companies, there must be a wider pool of talent on the Plus market.



Brainspark

Aim-listed Brainspark has wasted no time in taking advantage of a thawing in economic conditions.

The investment group last week announced that it has put £2.1m into Cogeme, an Italian automotive parts maker, giving Brainspark a 6 per cent stake in the company. The news is interesting in itself: Cogeme, which makes the likes of turbochargers and fuel injections systems, made a profit of €3m last year, all with assets of €63m.

However, it is the speed with which Brainspark is throwing its money about that has interested small-cap investors, who have sent the group's shares up by about 130 per cent in the last 12 months.

The investment in Cogeme comes hot on the heels of Brainspark's £140,000 backing last month of another Aim-listed outfit, Indian Restaurants Group, and two months after it ploughed £1.5m into the Italian second division football club Ancona, an investment it has since increased.

Brainspark says that it pursuing a "dynamic strategy" to create a portfolio of media, leisure and entertainment companies, largely in Italy.

Despite the recent investments that have been covered in this column, the group regards its biggest asset as its stake in Mediapolis Investments, the Italian group that owns a site in northern Italy, which it plans for the development of a large theme park. Brainspark says that it "may be either a passive or active investor and [that its] investment rationale ranges from acquiring minority positions with strategic influence through to larger controlling positions."

So nothing ruled out really, then.

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