Hopes of an offshore oil find that would solve all the country’s economic problems persisted throughout the 1970s and led to frequent booms and busts in the share prices of the small Irish exploration companies involved in the search. Ken O’Brien charted the latest boom around an exploratory well in the Porcupine Bank off the Aran Islands in 1979.
THE INTEREST of Dublin’s financial community in monetary aggregates, the exchange rate, interest rates, pay developments has diminished in favour of a more immediate obsession: Irish oil.
The excitement has centred on the shares of Aran Energy, which has participating interests in three offshore consortia and 17 blocks in Irish waters. Silvermines, the publicly quoted holding company with a 17% stake in Aran, has been caught up in the excitement too, as have the shares of Bank of Ireland, another shareholder in Aran, and the Petroleum Royalties of Ireland, whose shares have moved in sympathy, not as a result of any direct connection with the Aran/BP well, but as a reflection of the new air of optimism.
Aran was publicly launched three years ago at 125p to punters willing to take a gamble. Prior to the latest summer exploration season, the shares have languished at about this price. They tended to firm up in the summer and hibernate in the winter.
Last December, the shares had faded to 65p and by the middle of last month had moved up by less than 10p to 73p – no more than a reflection of the summer fever the shares are subject to.
Then, reports of encouraging results from the Aran/BP drillhole 120 miles due west of the Aran Island began to circulate. The well was spudded-in in the northwest corner of block 26/28 on June 12th last in 354 metres of water. Five weeks [later] . . . the shares began to move. On Tuesday, July 17th, the first small spurt occurred, with Aran advancing 5p to 78p But then, after the initial few days of insider nibbling, the floodgates opened.
On the Friday, Aran’s shares rocketed from 85p to 140p. Silvermines, following on Aran’s coat tails, put on 11p to reach 60p. The Bank of Ireland even put on 7p.When the stock exchange opened the following Monday (July 23rd), Aran advanced a further 10p to 150p. In the meantime, shares in Petroleum Royalties of Ireland added 23p to reach 190p.
But then new insider “stories” began to be put out. BP was supposed to have found some encouraging oil traces, but it had decided to pull up its drill and was not returning. This, experts were supposed to believe, was a “negative” sign. The Aran shares fell 20p in the next two days and Silvermines lost 2p in sympathy.
On July 26th (Thursday), a new bout of buying developed The new “evidence” was Aran/BP had come up with something big. The previous week’s discouraging rumours were interpreted as a deliberate deflation of the optimism by the consortium.
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