Junior stock market energy firms 125% up

OIL and gas companies listed on London's junior stock market ended the year on a high, making a collective gain of 125 per cent over the course of 2009, according to research out today.

Ernst & Young's Oil and Gas Eye index, which covers the 100-odd energy firms listed on the Alternative Investment Market (Aim), racked up the impressive gain after a 66 per cent slump in 2008.

The research revealed that almost two-fifths of the companies making up the index enjoyed share price gains last year.

Fundraising was also buoyant, with the total value of secondary issues hitting 1.1 billion, up 62 per cent on 2008's figure. During the final three months of the year, 36 firms secured a total of 547.2 million in additional funds – the highest amount raised in a single quarter since early 2006.

However, today's report confirmed that no oil and gas companies joined Aim in the last 15 months.

And there was a warning that despite the signs of recovery in investor confidence, oil and gas companies – whose fortunes directly relate to the ups and downs of the price of crude – face a turbulent 2010.

Jon Clark, director of E&Y's oil and gas practice, said: "With economic recovery still some way off, there is concern that future bad economic news could destabilise the market, which could lead to a relatively short IPO (initial public offering] window."

The report observed that several companies in the sector were working towards a potential flotation this year.

Alec Carstairs, an Aberdeen-based oil and gas partner at E&Y, added: "Expect more transaction activity in the sector as larger companies take advantage of the strategic opportunities presented by their junior counterparts."