Ex-Tullow Oil employees’ United Oil & Gas starts trading
Energy firm focused on buying unwanted oil and gas licenses in Europe
United Oil & Gas stock jumped as much as 20 per cent to 3p in early trading on the London Stock Exchange but closed unchanged at 2.5p, giving it a market value of £5 million. Photograph: Matthew Lloyd/Bloomberg
Shares in United Oil & Gas, a company led by two former Tullow Oil employees, had a mixed session on their first day of trading after the company carried out a reverse takeover of London-quoted Senterra Energy and raised additional funds through a £3 million (€3.4 million) stock placing.
The stock jumped as much as 20 per cent to 3p in early trading on the London Stock Exchange. However, it closed unchanged at 2.5p, giving it a market value of £5 million.
Dublin-based United Oil & Gas (UOG) was established two years ago by Irishman Brian Larkin, who previously held finance and commercial positions at Tullow Oil, and Briton Jonathan Leather, who worked with the oil group between 2007 and 2015 where his roles included membership of its global exploration leadership team.
The company’s strategy is to buy non-core, or unwanted, oil and gas licences from larger groups, with the goal of being an “active partner to unlock previously untapped value” for its shareholders. It is mainly focused on Europe.
Last year, United Oil & Gas bought a 26.3 per cent stake in a licence in an onshore oil field in the Wessex Basin in southern England, which includes access to what the company calls “significant” exploration opportunities. The company acquired a 20 per cent stake in an oil field licence in the Po Valley region of northern Italy in early May.
“Our work programs are wholly funded and we look forward to drilling our first well in the Selva field in the Po Valley in Italy, in October,” said Mr Larkin. “In addition, we continue to evaluate further potential acquisitions and farm-in opportunities.”
Analysts at Optiva Securities in London estimate that the company’s net asset value is £8.8 million, but “the upside valuation” of the company could be as high as £30.3 million.