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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)
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To: Greywolf who wrote (1560)3/23/2000 7:58:00 PM
From: Tomas   of 2742
 
High Oil Price Hits Small E&P Company Plans
Financial Times FT.com site, 23 March

Soco, the London-based oil and gas group, on Thursday said the high world oil price was preventing small exploration and production companies from buying new assets.

Last year the group sold its UK assets and acquired Torobex, an investment vehicle, to pursue new assets in the Middle East and North and West Africa. Despite an aggressive approach the company has been unable to close any deals to date.

Roger Cagle, chief financial officer, said: "The high oil price cannot harm us because it adds to our bottom line. But it is becoming more difficult for us to pursue interesting opportunities because there is more competition."

Soco specialises in exploration and production in developing and politically sensitive countries including North Korea, Vietnam and Mongolia. It is seeking new licenses in Libya, Iraq, Iran and the Congo.

Mr Cagle added: "At low oil prices, if you have low production costs, a company like ours can be very successful. But at the moment a lot of companies are moving into areas they wouldn't previously have looked at and are paying unjustified premiums on assets."

Oil industry commentators said the high oil price was leading to a general stagnation in asset deals and mergers and acquisitions at the smaller end of the market.

Bruce Evers of Investec Henderson Crosthwaite said: "There are plenty of assets around but a gap between buyers and sellers is opening up as people are beginning to wonder what will happen if the price starts to go down again."
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