The Week In Review: Venture's gold puts it in the black

The world's major oil producers are winding down their North Sea operations, but drilling for black gold is still proving lucrative for smaller British players.

One of these is Venture Production. After offloading its fields off Trinidad last year, Venture is now focusing on exploiting isolated patches of oil and gas left in the North Sea.

These are too tiny to make drilling cost-effective for the big players. But Venture's costs are much lower, giving it financial elbow room in which to work.

Impressive interim results this week showed that surging production and tighter cost control helped Venture into the black in the first six months of this year.

Venture has yet to pay a dividend, but its shares have climbed from less than 150p at the start of 2003.

Trading at seven times expected 2007 earnings, they look startlingly cheap compared with the other five oil and gas companies in the FTSE 250, which trade at an average of 13.5 times. Buy.

CABLE & WIRELESS

Cable & Wireless's assets stretch from Macau to the Maldives, and it has been gaining ground on its local competitors. The group trades at a significant premium to its rivals, but the shares could edge higher if C&W wins broadband deals to justify its investment in the network. High-risk, but worth buying.

ELEKSEN GROUP

Eleksen, founded in 1998 and floated on the Alternative Investment Market in May, has developed a cloth of coated fibres that conducts electricity. The technology is exciting - one project is a suit that enables the wearer to control an iPod simply by touching the lining of the jacket - and the shares may be worth a look. But this is one for adventurous investors only.

ARDANA

This drug firm focuses on human reproductive health. It has Striant, a testosterone-replacement tablet, on the market. It is also in talks with pharmaceutical groups that are interested in licensing Teverelix, its lead product, which is being developed to treat prostate cancer, prostate enlargement and endometriosis - it has big potential. Ardana is one of The Independent's stock tips of the year. Given its promising prospects, it remains a buy.

MARYLEBONE WARWICK

Marylebone Warwick Balfour plans to return £30m to investors after a 40 per cent rise in its shares this year and the sale of its West India Quay hotel. MWB has also had strong growth in its business-exchange business, and it has stabilised sales at Liberty, which plans to create a global luxury-goods brand based on Liberty of London. MWB has three lines of business and £158m of debts, so investors should hold on for more gains.

OASIS HEALTHCARE

The dental practice group has won tenders for four practices - comprising 16 surgeries - which are expected to create £2.1m of annual revenues. It is also making good progress with the new NHS contracts introduced in April. After several months of bid speculation, a takeover is now unlikely, but its prospects look good. Buy.

PETROFAC

A near doubling of interim profits sent Petrofac shares surging this week as analysts scrabbled to lift forecasts for the full year. Shares are now trading at 15 times' expected 2007 earnings, and are cheap compared to its rivals. With the firm set to benefit from higher global capital spending by the oil industry, the shares are still a buy.

REAL GOOD FOOD

This upmarket catering supplier has grown fast. It recently took over Five Star Fish, Haydens Bakeries and Napier Brown Foods. Trading at 6.6 times forward earnings, the stock is cheap and, with the sugar market stabilising, worth a look.

WILMINGTON

The business-to-business publisher and training group was set for a 50/50 merger with Metal Bulletin this summer, but in the end Euromoney snapped up the merger partner. However, full-year results are good, and the break-fee will cover the £1.2m merger costs. Wilmington seems a decent little media company, with defensive qualities. Hold.

LUMINAR

Things are looking up for Luminar, Britain's biggest nightclub operator. Its key dancing division delivered higher sales in August and the first three weeks of September, although group sales are still falling. Core businesses suffered a 2.4 per cent drop, an improvement on the 8 per cent fall Luminar suffered in the spring. Luminar should weather next year's nationwide smoking ban better than the pub and bar chains. Smokers may drink at home, but Luminar hopes they will still want to dance. Hold.

LONDON CAPITAL GROUP

Turbulent stock markets may have given private investors sleepless nights recently, but spread-betting companies, which thrive on volatility, love them. Take London Capital Group, owner of Capital Spreads - it has unveiled a 52 per cent rise in sales to £3.5m in the first six months of this year. Profits before tax surged 385 per cent to £1.7m, although this startling improvement is flattered by a £400,000 dividend paid to the company's previous owner last May that depressed interim profits in 2005. Buy.

INVU

Invu, the document management software developer, has signed a distribution agreement with Sage. It has endorsed Invu's latest product and will sell the software into its large accountancy customer base and potentially to its 600,000 UK customers. Alongside similar deals in Southeast Asia, the partnership could kickstart serious sales growth. Buy.

The above recommendations are taken from the daily Investment Column.