Oil and gas companies listed on the Alternative Investment Market (AIM) have seen an upturn in their fortunes for the second quarter in a row.
Ernst & Young’s oil and gas eye index made gains of 24% in the second quarter of 2009.
The index has now risen by 57% since the start of the year, but still remains 58% down compared with this time last year.
Alec Carstairs, oil and gas partner at Ernst & Young, said: “The steady but cautious recovery in the performance of the oil and gas eye index in the last six months is, in part, supported by higher oil prices but working capital constraints and access to affordable financing cannot be ignored.
“Future prospects for oil prices stabilising at higher levels depend on the speed and strength of global economic recovery and investor confidence may not return to every company in the sector.”
The oil and gas partner continued: “Amidst the economic gloom and volatility in oil prices, opportunities have emerged.
“This trend will continue for some well-capitalised oil and gas companies to position themselves for the upturn, for example, through acquisitions of distressed targets, or falling costs.
“The future outlook, although not certain, is becoming more positive.”
Jon Clark, oil and gas director at Ernst & Young, said: “Many of the companies that were successful in raising funds through the secondary placing of shares reported strong interest from existing shareholders and new institutional investors.”
Mr Clark added: “For a third consecutive quarter, no new oil and gas companies joined AIM.
“However, in the second quarter of 2009, there were no exits from the AIM oil and gas universe – bringing a halt to a recent trend where we saw in the first quarter of 2009 when three companies de-listing from AIM as a result of market conditions.”
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