Genel, the oil investment vehicle headed by Tony Hayward, the former chief executive of BP, has been unloved by the stock market.
Since its purchase of Turkish oil group Genel Enerji, which owns producing and exploration assets in the Kurdistan region of Iraq, the shares have plunged by a third.
The company is also backed by financier Nathaniel Rothschild and its finance director is Julian Metherell, a former Goldman Sachs partner.
Genel had $1.8bn (£1.15bn) of cash when it gave its last trading update. Last week it spent $240m buying an additional 21pc interest in a Kurdish oilfield called Bina Bawi to bring its stake to 44pc.
This means that about 78pc of its current market capitalisation is backed by cash in the bank. Indeed, part of the reason for the underperformance has been the "cash drag".
Money sitting in a bank earns little return at the moment and the market has been waiting for a big acquisition.Last month, Genel spent £32m buying Barrus Energy, giving it oilfields in Morocco and Ivory Coast.
However, Genel is the largest oil producer in the semi-autonomous region of Iraq. No agreement on an oil law with the Iraq central government has been reached, but there are signs that progress is being made on exporting more oil to Turkey.
Reports suggest discussions with the Kurdish and Turkish governments may result in the construction of a pipeline.
Questor recommended the shares as a speculative play in February when they were at 828p, but they have continued to fall. However, a canny M&A deal will be just the catalyst the share price needs. Genel is a speculative buy.
telegraph.co.uk
Since its purchase of Turkish oil group Genel Enerji, which owns producing and exploration assets in the Kurdistan region of Iraq, the shares have plunged by a third.
The company is also backed by financier Nathaniel Rothschild and its finance director is Julian Metherell, a former Goldman Sachs partner.
Genel had $1.8bn (£1.15bn) of cash when it gave its last trading update. Last week it spent $240m buying an additional 21pc interest in a Kurdish oilfield called Bina Bawi to bring its stake to 44pc.
This means that about 78pc of its current market capitalisation is backed by cash in the bank. Indeed, part of the reason for the underperformance has been the "cash drag".
Money sitting in a bank earns little return at the moment and the market has been waiting for a big acquisition.Last month, Genel spent £32m buying Barrus Energy, giving it oilfields in Morocco and Ivory Coast.
However, Genel is the largest oil producer in the semi-autonomous region of Iraq. No agreement on an oil law with the Iraq central government has been reached, but there are signs that progress is being made on exporting more oil to Turkey.
Reports suggest discussions with the Kurdish and Turkish governments may result in the construction of a pipeline.
Questor recommended the shares as a speculative play in February when they were at 828p, but they have continued to fall. However, a canny M&A deal will be just the catalyst the share price needs. Genel is a speculative buy.
telegraph.co.uk
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