Bula shares suspended in wake of volatility

STOCK EXCHANGE: Heavy trading over the past week and massive volatility in the share price was the trigger for yesterday's suspension of trading in Bula Resources shares, according to informed sources. Bula shares were suspended on the Dublin and London markets first thing yesterday morning.

Over the past week, the shares have traded as low as 17 cents (for a basket of 10 shares) and as high as 29 cents. At the time of their suspension, they were trading at 25 cents.

Turnover peaked last Friday when some five million shares traded. The shares were suspended "pending clarification of the company's financial position" - the traditional stock exchange jargon in these sort of situations.

A spokesperson for Bula, which is chaired by former Taoiseach Mr Albert Reynolds TD, declined to elaborate on the suspension of the shares but said that a statement would be issued "in due course". The stock exchange does not favour lengthy suspensions and it is thought clarification of Bula's situation may come as early as today.

Bula's position is complicated by the fact that it has had no sponsoring stockbroker since Davy resigned as broker last January. A sponsoring stockbroker is a requirement of the stock exchange and Bula has only been able to continue trading on the market since January under a special dispensation from the exchange.

Market sources said Bula would have to address this situation urgently and pointed out that it was more than two months since managing director Mr Tom Kelly told shareholders that "discussions with a short list of candidates are in progress".

Davy never disclosed why it quit as Bula's brokers but it is understood that the broker was unhappy with both the quality and quantity of information from the company.

Market sources said that Bula would also need to address a number of issues relating to the company's finances, including:

the renegotiations on the price of US oil assets that the company agreed to buy last year;

the status of the $1.5 million (€1.7 million) deposit that the firm paid for an asset in Bahrain that Bula insists is "refundable";

an update on the company's plans for exploration in Iraq and Libya.

The company will also need to update the boardroom situation where there are just two directors, Mr Reynolds and Mr Kelly.