Empyrean Energy PLC (AIM:EME, FRA:E1E) is a small oil and gas explorer with interests spread across Australia, Indonesia and the United States.
For years its big prize has been Mako, a gas field off Indonesia, but the nagging fear was how a minnow like Empyrean would ever fund its share of the development.
This week that worry lifted. The field's operator has completed the sale of a 75% stake to an Indonesian partner, and crucially that deal means Mako is now fully funded, with first gas targeted for the end of 2027. No need for Empyrean to tap shareholders for more cash.
Better still, Empyrean keeps a back-door stake, entitling it to 8.5% of the cash flowing from gas sales once production starts. It also pockets a $4 million payment now, with $7 million more to come.
In short, the risk has shrunk while the potential reward remains, and the shares have doubled.
Market mood
Turning to the wider market, it was another grim week for the AIM All-Share, which dropped 1.5% as investors continue to retreat from this riskier end of the market. It mirrored the decline of the FTSE 100, which fell 1.6% amid an escalation in hostilities between the US and Iran.
The UK continues to be the bargain aisle for private equity. Eleco PLC (AIM:ELCO), a maker of software for the construction industry, is the latest small-cap to be added to the basket. Accel-KKR is paying just under £208 million for the business, a huge premium to the price before the recommended deal was announced, prompting a 70% jump in the share price.
Rubber stamp for MESH
EnergyPathways PLC (AIM:EPP) is a small energy transition company whose big idea is MESH, a huge long-duration storage project in the Irish Sea deemed nationally significant by the government.
This week it hired Jacobs, a heavyweight engineering firm, to steer the planning and regulatory work, including a crucial bid for a government scheme that would guarantee MESH a minimum revenue. That stamp of credibility, and the funding path it hints at, helped lift the shares 20%.
Dianomi defies the slump
Dianomi PLC (AIM:DNM), the digital advertising firm, has been defying the traffic slump hurting rivals. Revenue growth sped up to 14% in July and August, helped by new publishers and busier clients. Broker Panmure Liberum stuck by its 'buy' rating, and investors piled in, sending the shares up 42%.
Down 42%, Kefi Gold and Copper was the week's biggest faller after it was touched by a tragedy. The company has suspended work on the Tulu Kapi gold project in Ethiopia after an attack at the site that resulted in the death of one of its employees.
Beowulf's race against the clock
Beowulf Mining PLC (AIM:BEM) needs its £4.3 million financing to survive, but the key investment hinges on Swedish regulators, who could take up to six months to rule. With the deadline looming and cash so tight that staff are deferring their own pay, the money is needed within a month. Investors took fright, and the shares slid 32%.
Cambridge Nutritional Sciences, a maker of food-sensitivity testing kits, served up a far from pretty set of full-year figures. Revenue slipped to £7 million from £8.3 million, and the company sank to a £4.4 million loss after writing £3 million off the value of past deals. The cash pile also shrank, and the shares fell 24%.
Recruiter with a crypto twist
Connecting Excellence Group Plc (AQSE:XCE, OTCQB:XCELF), or XCE, is an unusual beast: an executive recruitment firm that also runs a Bitcoin treasury on the side. Recent news flow gives investors two reasons to warm to it.
First, it has struck its debut deal, agreeing to snap up a construction and engineering recruiter that turns over £1.79 million. Cleverly, the target comes with 8.2 Bitcoin attached, so once you strip out the crypto changing hands, the net cash cost is a mere £150,000. Boss Scott Ellam reckons it is the template for hoovering up the many profitable, family-run recruiters with no obvious buyer.
Second, the flagship arm, Spencer Riley, grew revenue by 20.6%, and the group's Bitcoin pile has swelled to almost 73 coins, worth £4.2 million.
The shares have edged 31% higher over the month, yet still sit some 38% below their year high, suggesting the market is not seeing the full picture.
