London?s oil sector welcomed a new addition on Thursday as Xplorer (LON:XPL) made a premium debut.
It is the latest shell to join the market and investors may be forgiven for overlooking this debutant which is valued in the market at just ?1.97mln.
Raising just ?1mln the new entrant?s float barely made a splash, but, a closer look shows there may be more to this company than initially meets the eye.
The fact that it has jumped straight on London?s main board rather than AIM, the typical home of cash shells, could be taken as a statement of intent.
Delving through the group?s prospectus and associated marketing reveals an ambition to quickly put together a firm of some stature.
The group?s pockets are deeper than the float suggests. It is backed by Hong Kong based private equity group Sprint Capital, currently owning 17% of the shell, and it has several institutional investors in tow.
Xplorer?s upfront ?1mln is merely pocket-money to allow the group to complete negotiations and due diligence over a significant transaction.
Through a reverse takeover and another funding the group is expected to take its true form within a matter of months.
It is understood that assets currently in Xplorer?s sights are located in Kyrgyzstan and Georgia and the plan, once a reverse is sealed, is to bring in major partners for drilling.
Together the assets? reserves will be in the multi-billion barrel bracket and it is thought the enlarged company could in short order be propelled among the established exploration and production companies in the FTSE 350.
In a stock market statement today Xplorer chairman John Davies said: ?This is the start of an exciting journey in the creation of substantial value for our shareholders.?
?Our sights are set on a significant transaction which will be supported by Sprint Capital. Accordingly, we consider a listing on London's Official List, rather than a junior market as appropriate to our ambitions for building a substantial oil and gas business."
On Thursday Xplorer shares were changing hands at 18p each on the ? the ?1mln share placing was priced at 16p.
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