Market round-up: Fracking firm hit by falling oil price

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Shares in the only London-listed fracking firm, which has licences in the North-West and Midlands, fell 1.75p or 5.5% to 30p after it revealed a slump in revenues as a result of the oil-price collapse.

Revenues were down to £58.2 million from £75.9 million the year before, while it swung to a loss of £18.5 million against a profit of £2.3 million in the previous year.

Production from conventional wells — not using the controversial method of extracting shale gas — dipped slightly to just under 1 million barrels of oil equivalent.

Private peer Cuadrilla is awaiting a decision on its application to frack in Lancashire, which could be the first major shale-gas extraction programme in the UK. The decision has been delayed until Monday.

IGas has teamed up with some major players including France’s GDF Suez and Total. A farm-out deal with chemicals giant Ineos boosted its bank balance to £46.4 million by the end of May.

The company is now worth just  £94 million after a 75% dive in the share price. It said restructuring, including paying off former chief executive Andrew Austin, who left in May, will cost it £2.8 million this year.

Austin still owns 3.69% of the company following a controversial share dealing scheme. Any possible dilutive fundraising to bolster the balance sheet is likely to leave Austin with less than 3% of the company, at which point he is no longer required to inform the stock exchange of his dealings.

The FTSE 100 dropped 62.47 points to 6745.35 with talks between Greece and its creditors reaching their climax.

Investors hung up on iPhone chipmaker ARM Holdings, down 39p to 1109p after a downgrade to underperform from Bernstein. The broker reckons the smartphone slowdown seen in the first quarter of 2015 could be the start of a pattern.

On AIM, small-cap broker WH Ireland rose 1.5p to 105p after an improvement in business during the first six months of 2015.

Zimbabwe-focused miner Mwana Africa tanked 20% to 1.42p as Peel Hunt handed in its notice as broker and nominated adviser. The company has until July 25 to find a replacement or its shares will be cancelled from AIM.

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June 27, 2015 |
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