As the market continues to creak under the strain of the weakening economy, few sectors have really had much to enjoy about their share price performance. Most private companies have also decided the uncertainty is too much to think about listing. No such worries for anyone connected with the oil sector, and this week the tiddling oil services group Thalassa Energy is preparing to make its debut on AIM.
The group makes seismic equipment for ships run by oil exploration and production companies to monitor their undersea reservoirs. The company, based in the British Virgin Islands, is to raise a modest £3m from its float tomorrow, bringing the market capitalisation to £4m.
It may not be much but the timing couldn't be more opportune. With oil prices hitting records of $147 a barrel this month, companies are desperate to pump oil in places that were previously considered too expensive. Just last week, stories remerged of a race for oil in the Arctic, while others have turned to oil sands.
Those looking undersea might well turn to Thalassa. The group was only established in September by chairman Duncan Soukup, a former Bear Stearns executive, who will end up with a 30 per cent stake in the group. Mr Soukup might be remembered for creating Acquisitor, a Bermuda fund that won an acrimonious battle for former internet star Baltimore Technologies in 2004, as well as his attempts to oust the board of CSS Stellar earlier this year.
DRC mining firm pays off finance chief
News of litigation involving companies that operate in the Democratic Republic of Congo is up there with confirmation of the Pope's religion and the revelation that bears relieve themselves in wooded areas. Just ask Small Talk regulars Central African Mining.
But the AIM-listed Dominion Petroleum has been embroiled in a legal dispute that does not involve its operations in DRC, or indeed in Uganda and Tanzania, but instead a messy divorce with a former employee. It has been fighting a lawsuit after dismissing its finance director, Carlo Seidel, earlier this year. The group will announce today that it has settled all claims and allegations relating to the suit. Mr Seidel will receive a £2.5m pay-off, as well as his shares and share options in the group. The pay-off has already been put in escrow so will not hit the balance sheet.
ITM the alternative pick
Talking of oil, other companies are looking to benefit from the search for alternative fuel sources. Investors in ITM Power will learn a bit more today about some interesting plans the company announced this month. It launched its bi-fuel petrol and hydrogen car and home refuelling system, but was in a close period until now, so provided little more information. Its technology reduces the costs for hydrogen-powered cars, and it has also developed a home refuelling system to answer questions by sceptics of how to keep the wagon topped up. The stock has taken a bit of a hammering this year as the lack of news flow sent its shares plummeting to all-time lows. The news this month should prove good for the company, but as broker Panmure Gordon pointed out, any shareholder has to be in it for the long term; the days of the major car companies producing hydrogen cars – and hence its chance to properly commercialise its technology - could well be some time away.
GTE gets new lease of energy
GTE is hoping to benefit from rising power prices. Its technology aims to enable aircraft systems and industrial turbines to use less energy. The impact of the rising cost of fuel will be evident in the next two weeks as it is airline reporting season, and Steven Zwolinski, GTE's chief executive, and John Bryant, non-executive chairman (above), will be keeping a close eye on results. EasyJet's shares fell 10 per cent after its statement last week. This week, Ryanair, Luft-hansa, and BA report. Broker Cazenove says: "The risk to earnings remains negative, especially with further deterioration in the outlook of global economic growth."
Alizyme takes a hit
News wasn't so good for another British biotech group, Alizyme, whose share price halved on Thursday after one of its key drugs failed to perform. The group's Colal-Pred drug for ulcerative colitis turned out not to work as well as the standard treatment. Although chief executive Tim McCarthy hasn't given up hope on the drug, it looks like the market has other feelings.
Boost for biotechs by Proxi
The Indy's share tip portfolio remains a big victim of the credit crunch but there was some good news for one of its picks from the AIM market this month. Proximagen Neurosciences has suffered with the rest of the biotech sector this year, but some interesting news went pretty much unnoticed in the market on 14 July. The company is trying to develop a drug to tackle Parkinson's disease. After some positive signs from initial tests, it has signed three partnership deals in the past 12 months, and a licensing agreement with Upsher-Smith Laboratories, worth £232m over a series of instalments. The company turned down a £2-a-share offer from an unnamed suitorhis year, so clearly thinks it is on to something, despite the share price being down at 91p on Friday. There is talk of an institutional buyer taking a keen interest.Reuse content