3 Legs, the company that is applying for the Cahors and Valence permits in France, will be listing on the Alternative Investment Market (AIM) in London next week.
As we understand it…a loss-making company that was valued at £10.2 million in 2007 is apparently now worth £161 million (according to its brokers) on the basis of drilling two-and-a-half test wells in Poland, partly funded by a third-party. It’s a little hard to get one’s head around, particularly when the shale gas industry is coming under increasing scrutiny in Europe (drilling in Blackpool is currently suspended and the French Government appears to have banned hydraulic fracturing for the time being). What’s altogether easier to understand is that the main beneficiaries of this exercise will be the Jeffcock family, who are likely to pick up a handy £4 million in the offering, or £10 million if the over-allotment is exercised.
AIM investors may have short memories, but some of them may remember that the Jeffcocks were also behind Cadogan Petroleum (temporarily suspended from trading shortly after listing in 2008), which has now lost over 80% of its listing value, and Vane Minerals (75% loss of value to date). Investors with even longer memories may also remember Authoriszor, the gold mining venture that became an Internet company, in which Mr Jeffcock and Mr Williams (another 3Legs shareholder who is selling shares in the float) were involved… It will be interesting to see how the listing (Pathfinder) document handles all this.
Caveat emptor…, or should that be watch out for a “load of hot air” as their Chairman, Tim Eggar, might say?