Star Energy

GOOD ARTICLE, JUST IN CASE IT HAS NOR BEEN READ.


Published: 08:28 Thursday 25 August 2005 < PREV | 1 | 2 | 3 | NEXT >

PAGES: 3
By: Graeme Davies, Investment Correspondent Printable Version Email A Friend


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The potential of oil and gas production and storage business Star Energy has attracted a host of top investors recently, not least Malaysian oil giant Petronas, which has snapped up almost 20% of the £200 million company.

As well as Petronas the likes of AAA-rated Bob Brown, Artemis' AAA-rated Adrian Frost, AA-rated John Dodd and Derek Stuart and New Star's AA-rated Patrick Evershed have all recently bought Star Energy shares (STAR) as it raised cash to pay for an acquisition.

Star Energy has onshore oil production in the UK but the most exciting element of its potential is its development of gas storage facilities. As the UK becomes a net importer of gas because of the dwindling North Sea gas supplies storage will become a vital and lucrative business.

Already overseas gas companies are trying to snap up storage facilities in the UK so the more cheaply produced gas during the summer months can be stored for sale as the price rises through winter. Its most advanced facility would give the company an 8% share of the UK gas storage capacity. Another company, recently tipped by Citywire, to enter this market is Egdon Resources.

Star's potential was not spotted immediately upon its arrival on the market last year as its shares traded within a narrow band of 168p to 178p during the second half of 2004. However a recent spate of positive news including the £40 million acquisition of rival Pentex Management, which has interests in 11 producing oil fields mainly in the Midlands and Weald Basin in Hampshire, has helped to boost its profile.