the end

par mareva , Barjac, mardi 19 septembre 2006, 18:25 (il y a 6632 jours) @ mareva

Small and medium-size oil companies fall into two main categories, industry analysts say.

Some specialize in secondary recovery, buying depleted fields from the major companies as their output declines and applying specialized technology to glean oil that is not plentiful enough to interest the original owners. For such companies, the reserves are known, but the price of oil can make a huge difference to their revenue, and value.

Others are discoverers. Like 19th- century prospectors, they stake a claim in an exploration permit and start drilling.

Maurel & Prom started with three prospects. A Vietnam natural gas play was unsuccessful and was written off in 2002. An attempt in Cuba was little better. The venture in Congo, acquired from an oil major that had found oil but decided the potential was too small compared with offshore prospects, turned up the M'Boundi field, holding now-proven reserves of 258 million barrels - for a company like Maurel & Prom, liquid gold.

Maurel's net profit this year could rise to €140 million, or $177 million, from €100.3 million in 2005, said Antoine Leurent, an oil analyst with KBC Securities in Paris.

Jean-Jacques Limage of Fideuram Wargny forecasts an even higher rise, to €250 million this year.

Yet, in July, the stock price plummeted to €13.75. Investors felt that potential extraction costs at M'Boundi were high, Limage said, and the company needed to seek new sources of growth.

Hénin did not disagree. "The M'Boundi situation was like a dream," he said, "and the dream was also supported by rumors of a takeover."

"The period of dreaming has come to an end - we know the size of the field - and the speculation has also turned out to be a legend."

Discoveries can be bought and sold, and discoverers too. The lot of many independent oil companies is to acquire permits, find significant reserves - and be gobbled up by a major.

"This will probably be Maurel & Prom's final destiny, though maybe not right away, " said Leurent of KBC Securities.
This year, the company denied reports of a €2.3 billion bid by Indian Oil Corp. and Oil India for a 40 percent stake.

Deal speculation continues, however, and in August, Maurel confirmed that it was in talks with ENI in Italy about a possible acquisition of assets.

"The rumor is that it will sell part or of the M'Boundi deposit," Limage said.

Meanwhile, the company continues about its business. "We will spend €100 million this year on pure exploration," Hénin said. "That is between 10 and 13 percent of Total's program, when the company is a fiftieth the size of Total."

"We have a risk profile, in the good sense of risk," he said.

Brian Childs contributed reporting.

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mareva