Float to fund Mercantile expansion

THE City's burgeoning oil and gas sector will have a new addition this July when a former Shell geologist floats an exploration firm he saved from bankruptcy just two years ago.

Rudolph Berends, who worked with Shell chairman Sir Philip Watts in Indonesia 30 years ago, wants to raise cash to fund a drilling programme and seek a merger for his business, Mercantile International.

He hopes the £20m AIM-listing, through Seymour Pierce, will also attract UK investors who want an exposure to the fast-growing oil and gas markets in Columbia and Peru. Columbia is seen as having an increasingly important role in supplying the thirsty US market with black gold, given industry strikes in Venezuela and ongoing supply problems in Iraq.

Berends joined Mercantile two years ago and pushed through a $40m (£21m) debt-for-equity swap that saw institutional investors, led by UBS, take an 87% stake. Some 25% of the business will now be floated.

Berends said: 'We have built the company from bankruptcy right up to flotation, but I still think there is a lot of upside potential.'

The Cayman-Islands-based group's current reserves across Columbia and Peru total 8.8m barrels.