Gatwick Gusher may just be pipe dream

The Gatwick Gusher - a report from Aim tiddler UK Oil & Gas Investments of a big oil find near the airport - was one of those stories that is too good to disbelieve for some reporters. It therefore received hefty, credulous coverage on TV and radio last Thursday. Chairman David Lenigas - a veteran of businesses such as Lonrho in its tiny, post-Tiny Rowland incarnation - told the BBC there was "50-100bn barrels of oil in the ground".

That might not be technically inaccurate. But some broadcasters failed to stress a point made on the second page of UKOG's release - the page harassed news reporters do not always read. Here, chief executive Stephen Sanderson said 3-15 per cent of reserves had been recovered in similar US oilfields.

At the low end, that is equivalent to 260m barrels from UKOG's acreage. Extrapolating that tenuously for the whole Weald Basin, you get to a figure of 5.2bn barrels.

Lombard remarked at the time that UKOG appeared to be more hat than cattle. The London Stock Exchange shared that opinion, requiring the group to issue a statement highlighting the difficulty of recovering oil. But this should have been published on Thursday, as the shares spiked, not three working days later. The appropriateness of a bourse operator regulating one of its own markets is once again open to question.

[email protected]

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation