Bottom Line: Lasmo over a barrel

WHEN Lasmo bought its rival Ultramar in 1991, oil was trading at dollars 20 a barrel and the two companies were worth pounds 1bn apiece.

Brent crude now changes hands at dollars 14 a barrel, the merged pair are valued at scarcely pounds 1bn, Lasmo has written a cumulative pounds 250m off the value of its assets and after a passed final is planning to pay a nominal 1p dividend in future, compared with 8.5p at the peak.

A reshaped management has cut gearing through disposals and worked hard at the cost base to make Lasmo a viable business at dollars 17 a barrel.

Further cost-cutting to cope with a dollars 14 oil price is hard to see. Lasmo employs hundreds, not thousands, of people so the opportunities to trim fat are limited.

As a play on the oil price, Lasmo at 126p is as good a bet as any, but there is no other reason to invest.