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Roxi Petroleum has had a somewhat confused start to life on Aim. When the Kazakhstan-focused oil exploration company floated in May 2007, it raised some $78m (£40m), principally to acquire and develop two assets - Ravninnoe and Beibars. The acquisition of a third asset, North Karamandybas, remains, as at IPO, the subject of a legal challenge.
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The subsequent acquisition of Eragon for up to $250m constituted a reverse takeover and resulted in Roxi's shares being suspended. The purchase of an option to acquire 50 per cent of the ADA Group for $425m - potentially another reverse takeover - saw the shares suspended for almost five-and-a-half months.
The lengthy suspension hit the shares badly, obscuring the potential in the business. Ravninnoe is a proven oil discovery, and exploration is under way at Beibars. The Eragon acquisition added new territory and reserves, significant exploration prospects and production from the Galaz and Munaily contract areas is expected in 2009.
Total reserves stand at 40m barrels of C1 (based on geological exploration and production drilling) and C2 (based on geological and geophysical research) under the Commonwealth of Independent States classification. Roxi has until September to exercise its ADA option, and positive early analysis of ADA's assets suggest the acquisition will happen.
Prior to these results, Daniel Stewart forecast a loss per share of -13¢.
| ROXI PETROLEUM (RXP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 14p | MARKET VALUE: | £45.6m | |
| TOUCH: | 14-15p | 12-MONTH HIGH: | 74p | LOW: 12p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 26¢ | NET CASH: | $26.2m | |
| Period to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2007* | nil | -10.47 | -9.90 | nil |
*13 Oct 2006 to 31 Dec 2007 £1=$1.9517 |
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Roxi needs a substantial capital-raising to fund its work programme. The shares are risky as a result, but raising such funds could herald the release of significant value from the assets. Fairly priced.
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