Genel, the oil investment firm headed by Tony Hayward, the ex-chief executive of BP, has been unloved by the stock market.
Since its purchase of Turkish oil group Genel Enerji, which owns producing and exploration assets in Kurdistan, Iraq, the shares have plunged by a third. It is also backed by financier Nathaniel Rothschild and its finance director is Julian Metherell, a former Goldman Sachs partner.
Genel had £1.15billion of cash when it gave its last trading update. Last week, it spent £153million buying an additional 21% interest in a Kurdish oilfield called Bina Bawi to bring its stake to 44%. This means that about 78% of its market capitalisation is backed by cash in the bank.
Indeed, part of the reason for the under-performance has been the “cash drag”. Money sitting in a bank earns little return at the moment and the market has been waiting for a big acquisition.
Last month, Genel spent £32million buying Barrus Energy, giving it oilfields in Morocco and Ivory Coast.
The Sunday Times says shares are 695p and are a speculative buy.