Greg Scott, Head of Corporate, at Memery Crystal LLP in London talks about his recent trip to Houston, Texas to explain the merits of the AIM market to US domestic oil and gas companies.

“I gave a presentation on AIM, on Thursday, 14 June at a seminar in Houston organised by Noble-Wood Roberts. This is a joint venture set up recently between Noble & Co Limited in London, nominated advisers and brokers to AIM companies and Wood Roberts LLC, a Houston based consultancy specialising in raising finance for oil and gas companies. The seminar also featured presentations from the structured finance team of Royal Bank of Scotland plc and Netherland Sewell & Associates Inc., geologists/engineers to the oil and gas sector. The seminar also heard of the experiences of Energy XXI PLC a special purpose acquisition company floated on AIM in 2005 to pursue oil and gas interests.

AIM is the alternative investment market of the London Stock Exchange. Its combination of “light touch” regulatory approach allied to the quality of analysis in and fundraising power of London has led to many overseas companies, particularly natural resource businesses, seeking a listing on this market. AIM provides an attractive opportunity for fast growing companies to raise money from UK and other investors over a number of financing rounds and to grow by acquisition in an environment which provides a high degree of investor protection but without the onerous compliance procedures and costs demanded by Sarbanes Oxley in the US. A particular attraction for oil and gas companies is the readiness of UK investors to value probable and possible reserves as well as proven assets.

The seminar itself was attended by some 70 delegates. In my brief three day stop-over in Houston, I also met representatives of a number of different companies operating in the oil and gas exploration, production and services sectors. I was pleasantly surprised at how well informed directors were of the advantages and indeed some of the perceived disadvantages of an AIM listing. Despite some residual concerns over liquidity and short-term trading/settlement difficulties that can be experienced by US investors under the US Securities Act, the fact remains that for companies seeking to raise (typically) US$50 to 100 million and with ambitious growth programmes, AIM represents a very attractive opportunity. One of the companies which I met and which has onshore US oil and gas exploration and production, is actively seeking an IPO on AIM and it will be interesting to see how this progresses.”

If you wish to find out more about the possibilities of floating a US or indeed any non UK business on AIM, please contact Greg Scott at Memery Crystal LLP. Memery Crystal LLP are one of the leading legal advisers to the AIM sector, having acted on well over 200 AIM transactions since the inception of the market in 1995.