That's rather a nice way of putting it.THERE'S a popular ball of conversation being tossed around trading floors at the moment, and it goes something like this: "How could anyone have been fooled by those cowboys?"
It refers, of course, to Regal Petroleum, the hapless oil & gas firm that has admitted that one of its supposedly oil-rich wells in Greece is in fact dry. Since it made the confession on 18 May, Regal has been on a roller-coaster ride of bad publicity. The shares have crashed from over 500p in March to 73.5p, while chairman Frank Timis has been outed as a former indulger in hard drugs. He resigned on Tuesday.
The company has come to embody the investor frenzy that has pervaded the industry, making it by far the most vibrant sector on the stock exchange. There has been a swelling tide of speculative exploration firms seeking a place on AIM - the little sister of the London Stock Exchange - many without any genuine prospects of finding anything.
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IN JUST 12 months to the end of March 2005, 52 oil & gas companies have joined AIM - the UK's junior stock exchange.
The sector now accounts for about a fifth of all the companies on the minnows' market, which now boasts over 1,000 businesses.
Panmure Gordon estimates that almost £5.7 billion has been invested in resources companies that have failed to produce a single barrel of oil, or indeed any other commodity.
Analyst Tim Heeley said: "We believe that AIM's oil & gas sector is overheated, and cooling could occur in the near future."
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