Investors on the London and Dublin exchanges were given another channel into the unconventional energy segment last week through the admission of Falcon Oil & Gas (FOG) , a company chaired by 35-year industry veteran John Craven. Mr Craven has previously played key roles in the successful development of companies like Dana Petroleum, Petroceltic (PCI) and former IC favourite Cove Energy.
The pedigree of someone like John Craven, or indeed that of Falcon chief executive Philip O'Quigley - previously with highly promising Irish offshore driller Providence Resources (PVR) - can go a long way towards establishing a viable secondary market in a resource company's shares, something that's not always a given on London's Alternative Investment Market (Aim). Early signs are encouraging for Falcon, with the shares trading 11 per cent in advance of the placing price of 14p. The company raised $25m (£16.5m) in total - 40 per cent of which will be used to repay debentures due in June.
A speculative investment in Falcon provides exposure to the value locked in prospects covering some 14.75m acres in Australia, South Africa and Hungary. As with any junior resource company, execution and cash management are critical, but Falcon already has a long-standing heavyweight joint-venture partner in the form of US major Hess Corp (NYSE: HES). Again, the presence of Messrs Craven and O'Quigley must surely add to the allure of Falcon's acreage in the eyes of potential farm-in partners.
