In a year where the UK news has been dominated by Brexit, the Oil & Gas sector has been quietly (and successfully) raising funds in the UK, continuing to develop a broad portfolio of assets.
New IPOs across most sectors have been limited in the year to date, with only seven companies joining AIM in the period to the end of August. The same cannot be said however, for companies raising additional funds. One hot sector has been Oil & Gas.
Between January and August 2019, Oil & Gas companies have raised £408m on AIM through additional fundraisings, a significant outperformance when compared to the other industry sectors in terms of value raised and the number of transactions completed. The nearest comparable sectors were Financial Services, perhaps predictably, and less so, Software and Computer Services.
The near £0.4bn of funds was raised from 61 transactions across 43 different companies, exceeding the amount raised in the equivalent period in 2018, in terms of value and volume falling just short of the comparable, in the equivalent prior period, when viewed by amount raised per transaction average.
The oil price may seemingly have become less volatile since the lows of 2016 although prices do still tend to react very quickly to a wide range of influences. However, overall prices are, on average, more consistent and, by 2020, oil prices are predicted to flatten out at around $60 per barrel mark.
At these sort of prices the sector can continue to explore and innovate and put the funds raised to good use for future shareholder return. Despite the current uncertainties that surround Brexit, it is good to see that the UK AIM market has continued to show that its doors are open for companies to raise money for projects from a savvy investor base.
If you are interested in finding out more about the AIM market or discuss a potential fundraising in the UK, please do get in touch.