Aim-listed shell company Deo Petroleum has featured in a couple of recent Markets Live sessions here on FT Alphaville.
The reasoning behind its multiple appearances: its moon-bound share price, which left a company with just £200,000 of cash valued at more than £15m.
We had put it down to a small free float (around 8 per cent) following a recent fund raising and consolidation that saw two former Oilexco executives take control of the company.
But we were wrong.
It seems rumours have been swirling on the interwebs.
On Monday afternoon Deo, formerly known as Microcap Equities, made the following the statement:
The directors of the Company (“Directors”) note recent speculation, including the posting of a fictitious announcement on the bulletin boards.
The Directors confirm that there is no material information relating to the Company which was not previously announced on 8 December 2009 and 30 December 2009 when the recent capital reorganisation and subscription at 0.065p per share were announced and completed, respectively.
For enquiries: Deo Petroleum plc 020 7247 9691 Nicolas Greenstone
Merchant John East Securities Limited 020 7628 2200 Bidhi Bhoma / Virginia Bull
So what could this fictitious speculation be?
We think it might be the following, which was sent in by reader Foxcub. Emphasis ours:
13 January 2010
DEO Petroleum plc. (‘DEO Petroleum’ or ‘the Company’)DEO Petroleum plc announce substantial North Sea discovery
DEO Petroleum today announced the discovery of a gas condensate field in the Central North Sea. The discovery straddles blocks P0276 and P0061. DEO Petroleum holds a 100 per cent interest in the discovery.
Following the initial exploration well, which was drilled earlier this year, a sidetrack well has confirmed the presence of a substantial commercial hydrocarbon accumulation. DEO Petroleum estimates recoverable reserves to be between 300 and 500 million barrels. The consortium is targeting early development sanction.
DEO Petroleum directors, said, ‘This is one of the largest recent North Sea discoveries and represents a highly attractive near-term, near-infrastructure project. It once again reinforces the prospects for our UK exploration and production business and shows the continued prospectivity of the North Sea.’
The initial well was drilled in a water depth of 112 meters and is nine kilometers west of the existing development.
There are matters discussed in this media information that are forward looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from the forward looking statements. Company does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Enquiries DEO Petroleoum plc 020 7247 9691 Nicolas Greenstone
Merchant John East Securities Limited 020 7628 2200
Until a few minutes ago the above could have been found here.
Now, on the other side of the pond, the SEC has been quick to clamp down on hoax stories like this. What will the London Stock Exchange, which regulates Aim, and the FSA do?
Surely this falls under Point 6 of the FSA code.
6. Dissemination – giving out information that conveys a false or misleading impression about an investment or the issuer of an investment where the person doing this knows the information to be false or misleading.
For example A person uses an internet bulletin board or chat room to post information about the takeover of a company. The person knows the information to be false or misleading. This could artificially raise or reduce the price of a share and lead to people making the wrong investment decisions.
Shares in Deo closed 42 per cent lower at 2.8p, valuing the company at £9.5m, which is still an absurd premium to its cash position.
Related link:
Microcap Equities Plc – Proposed Subscription, Capital Reorganisation and directorate change