Private investors in small- to mid-cap oil and gas firms have had a tough few years during the downturn.
They have bought shares in up-and-coming businesses that harboured ambitions of becoming the next North Sea oil major and appeared to promise healthy returns.
But in many cases individual investors have had to look on as those same companies restructure their finances and dilute the value of their shares with new placings.
Or, in the worst-case scenario, liquidators have been appointed, leaving shareholders facing the prospect of incurring heavy losses.
With industry chiefs warning of a dire need for investment to spur exploration, it begs the question: Why would anyone take the risk?
Barry O’Neill, the Aberdeen-based investment director at Carbon Financial Partners, said investing in smaller oil companies could be perilous.
But all available evidence shows smaller firms have potential to yield higher returns than majors who can access capital more cheaply, he said.
In essence, people are increasingly willing to take a speculative punt because they hope to strike it rich.
“If you take a bigger risk, you deserve a higher return,” Mr O’Neill said.
But he said the only people who should take the risk are those who can afford to take “big hits” without their standard of living being affected.
He said it would not be advisable to invest in a group of small oil companies because they are all susceptible to the same sector issues, unless an investor needs to take the risk and is comfortable doing so.
Mr O’Neill said portfolios that have been put together for more cautious investors tend to spread money across a range of companies in different sectors.
Smaller oil companies would only form part of the mix, if they are included at all.
He said: “Most people do not need a high level of risk because they do not need that level of return. Now it’s possible to get rid of those risks through diversification.
“Who needs a higher level of return than 11% a year? I don’t think there is anyone.
“The number one rule is to take the minimum amount of risk necessary to achieve your investment aims.”
Mr O’Neill also said there was an expectation among investors for company directors to buy new shares when they enter the market, as was the case with EnQuest late in 2016.
He said: “Investors want those in charge to have skin in the game. They want them to feel the pain, or enjoy the spoils if it goes well.”