French billionaires buy into ‘Gatwick Gusher’ oil firm

ONE of France’s richest families has taken a significant stake in UK Oil & Gas – the company that stunned markets after claiming it had found vast oil and gas reserves in South East England.

SCDM Energy, which is controlled by the billionaire Bouygues brothers, snapped up 5.03 per cent of UK Oil and Gas (UKOG), which is looking for oil in the Weald area near Gatwick airport.

Brothers Martin and Olivier are the sons of Francis Bouygues, founder of the Bouygues group which is one France’s largest corporations – with interests in telecoms, construction and real estate.

It was two years ago that UKOG said it had found billions of barrels of oil under Surrey and West Sussex and its find was dubbed ‘the Gatwick Gusher’.

But soon afterwards UKOG had to stress it was not clear whether there is any recoverable oil at all, leading some analysts to pour cold water on UKOG’s prospects.

Australian entrepreneur David Lenigas also stepped down as chairman amid widespread criticism of the company though he still owns 2 per cent of the firm.

The move by the Bouygues brothers prompted Lenigas to speak out. He said: ‘It’s a disgrace that nobody gives a hoot the French have bought a stake in one of the most important strategic projects of the last decade. The French have managed to sneak through the back door and I don’t think they will stop there.

‘What would happen if Rosneft, Gazprom or even the Iranian national oil company bought a stake in UKOG?’

After Lenigas said in 2015 there may be ‘multiple billion barrels’ of oil at the Horse Hill site in Surrey, in which UKOG owns a 30 per cent stake, its shares shot up almost 200 per cent to 3p.

UKOG raised £6.5million in May to develop its sites in the Weald, including at Broadford Bridge in West Sussex. On Friday, UKOG shares closed at 7.87p, giving the company a market capitalisation of £277million and SCDM a stake worth £14million.

Asked why UKOG’s shares had risen, Lenigas said: ‘People have finally clocked on that the Weald basin is real.’

But Malcolm Graham-Wood, an oil analyst at Hydrocarbon Capital, said: ‘The market will only find out about its real value after the current phase of testing and that may take a long time. So, there’s a chance there’s something decent here. It could be worth well more than the current share price but nothing is certain.’