At long last, Algy is getting the returns he so richly deserves

ALGY Cluff, one of the pioneers of the original oil discoveries in the North Sea a ge n e r a t i o n a go, received an OBE last weekend in the Queen’s Birthday honours list for his contributions to business, of course, but also to his substantial but unsung charity work.

Then, yesterday, he received a further present in the shape of a broker’s report singing the praises of his venture, AIMlisted Cluff Natural Resources, which is at present trading at around 2.5p having been as high as 5.8p and as low as 1.07p in the past 12 months.

Remarkably, however, the broker Allenby Capital reckons that the shares could be worth 12.5p, five times as much as they are now, albeit the caveats which surround any mining and exploration venture.

This column does not tip shares for the good reason that it normally gets it wrong but Cluff deserves a break. At an age when most people would long since have retired from the scene he has had the energy and nerve to assemble a small bundle of properties in the southern North Sea, at a time when with the collapse in energy prices scared off most of the competition.

In late April the petroleum engineering company Xodus released a report which said that if gas stayed within the price range predicted for it in the next few years then the Cluff properties had the potential to make significant money. It has been established that there is certainly gas there, but the question is whether Cluff can persuade someone else to come and drill it for him, in return for a slice of the profits, because he does not have the money to do it himself.

Obviously landing this kind of deal is harder than it might be because of the squeeze on energy prices has reduced

‘The question is whether Cluff can get someone to do the drilling, in return for a slice of the profits’

the appetite in the industry for drilling yet more holes, even when the prospects are good. But Allenby is excited because BP is drilling nearby at the moment in similar geology, and if they get good results then clearly that will kickstart interest in Cluff ’s assets.

Nothing is ever certain but the brokers clearly think he has a good chance of finding a partner and, if he does, on the basis of what they think is down there, the shares could take off. And one has to say that if they do, it is no more than Cluff deserves.