Max Petroleum is to become the eighth largest AIM quote this year in the ever-growing oil and gas sector when it floats on Wednesday.
The company is raising £26m and expects to reach a market capitalisation of £90m. It is also due to list in Frankfurt on the same day.
The group specialises in oil and gas exploration and production in Kazhakstan, and already owns three blocks covering an area eight times the size of Greater London in the PreCaspian Basin in the former Soviet state. These blocks involve one oil-bearing and two potentially oil-bearing properties.
James A Jeffs, Max chief executive, has also held senior executive positions at Chaparral Resources and at Whittier Energy, while Steve Kappelle, the group’s chief financial officer, has previously worked for both Unioil and Royal Dutch Shell.
Max Petroleum joins a growing list of oil and gas explorers and producers choosing to float on AIM. Out of the 68 quoted on the junior stock market, 26 have floated this year.
This trend is unlikely to change, as oil shares, along with mining stocks, continue to outperform all others, and fuel prices soar. The company with the largest market capitalisation in the sector, Nelson Resources, valued at £1bn, also operates in Kazhakstan.
But investing in them has at times turned out to be a gamble, as was seen with the likes of White Nile and Regal Petroleum. Only recently, BowLeven shares tumbled by almost half after the Edinburgh-based group, which undertakes exploration in West Africa, warned that its attempts at searching for oil in Biafra, Nigeria, had so far proved unsuccessful.