Gold Oil, renamed Baron Oil in July 2013, is an Oil and Gas E&P (exploration and production) company which is both registered and headquartered in the United Kingdom. The company’s shares are currently listed and tradeable on London Stock Exchange via its AIM – Alternative Investment Market.
The company recently changed direction, shifting away from the higher-risk and very capital-intensive deep-water exploration an effort to concentrate more on lower/ medium-risk exploration prospects, especially in areas that one develop and monetise quickly, and relatively cheaply.
At present, live projects include the UK North Sea, Peru and South-East Asia. Interests/stakes range from 8-100%. For UK Offshore (Wick, Colter) it’s the lower end of the range (8-15%), rising to 25% for a joint venture with SundaGas of Singapore in SE Asia to the full 100% for Peru offshore (El Barco).
When Gold Oil was founded back in April 2004, it sold shares publicly in a July initial public offering (IPO) for the equivalent of 4.25p a share. This allowed the company raise a shade more than £400K which valued the company just north of £10m. Around 2 years later the shares hit a 17.8p peak and a rather more impressive £42m.
Management last raised money from the financial markets in Aug 2014, selling another 200m new shares (15% capital increase) at a price of 1.45p/share, in order to raise £3m to pay for general working capital purposes.
The Oil and Gas exploration business is expensive, especially when deep-water environments are involved, which requires very specialist equipment. Those who operate in the sector are constantly scouting for new possibilities, however, the business model still relies on succeeding in converting and developing existing projects into cash generators, in order to fund the next once. Keeping the ball in the air, cash-wise, until you strike it lucky.