Investors Buck Trend by Ploughing Cash into North Sea Oil
03 July 2015
Crystal Amber has built up a stake of just under 12 per cent in AIM-listed Hurricane Energy and is now its largest shareholder a North Sea business it expects could be worth £17billion.
Hurricane is exploring in the Shetland Basin and has said test data suggests there is potentially at least 400 million barrels of oil.
Hurricane was founded in 2005 by Dr Robert Trice, a specialist in an unusual hydrocarbon geology known as “fractured basement reservoirs”.
Hurricane successfully drilled an appraisal well on such a structure, its 200million barrel Lancaster field west of Shetland last year, but wants to reduce risks further before committing full field development.
It is currently looking for a partner to help fund getting the oil out of the ground.
Crystal Amber bought in at 46p and then sold out last autumn. It then bought in to the company again at 16p a share. Hurricane’s shares are currently 16.75p.
The fund, run by Richard Bernstein, made £7.5million from selling its stake in chocolate company Thorntons when it sold its shares to Italian rival Ferrero Rocher which is taking over the company for around £111.9million.
Crystal Amber also decided to sell its stake in Irish airline Aer Lingus, netting £11million. Aer Lingus is currently being taken over by British Airways owner IAG. The deal is still awaiting full competition approval and still needs to agree a deal with 29.8 per cent shareholder Ryanair.
IAG has offered €2.55 a share and Crystal Amber bought in at €1.36 and sold at €2.42.
Bernstein said: ‘We decided to sell out of Aer Lingus as there is so little upside left for us and we would be better to invest elsewhere.’
Bernstein believes the potential in exploring in the North Sea, despite other bigger players selling out after the collapse in the oil price.
Bernstein said Hurricane can make money as long as the oil price stays above $40 a barrel. The current price of Brent crude is $63 a barrel.
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