The chairman of Bula Resources says that the past year has been a turning point, a new start.
The new chairman happens to be Albert Reynolds, the former Taoiseach (prime minister). The much troubled company has also found a new chief executive in the form of the highly respected Tony Peart and raised £1.6m in a placing.
It is still involved in litigation wih the former chairman, Jim Stanley and its legal representatives and there is an Irish government enquiry outstanding against it. However, its gross operating losses have been reduced from £12.9m in 1997 to £1.2m in 1998 meaning the loss before tax was £411,000 compared to £405,000, but this was after exceptional items.
Moreover, it is waxing lyrical about its acreage in Libya and Iraq. It says there are 33m billion barrels of oil in Libya, and that the country’s gas resources have hardly been exploited. It has, it says, acreage ‘under active’ negotiation consisting of 42,000 sq kms in Libya and 12,.600 sq kms in Iraq. Now that sanctions have been lifted against Libya the prospects for its light sweet crude are good.
This is all very welcome news, one assumes, but not that good that the shares should have increased almost sevenfold from 1p last November to nearly 7p this week. Acreage under discussion does not mean the same thing as actually finding oil.
No, the reason the shares have lifted is that the London Daily Mirror said the company had made a 151m barrel oil find in Libya. This seemed unlikely given that only last October the company said it was in talks with Oilinvest, a Malaysian concern with interests in Libya.
Tony Peart has said he does not comment on press speculation but the report did not come from him. The National Oil Company of Libya has categorically denied that Bula Resources currently holds an oil concession in the country or that it made an oil discovery. It would be interesting to know who thought it worth their while to punt such a story. Time will tell.