AIM-LISTED oil companies are increasingly vulnerable to market fluctuations and local political upheaval, according to Ernst & Young's own oil index known as the Oil & Gas Eye, reports the Scotsman .
According to E&Y, the 20 companies currently on the index have outperformed the FTSE Index by 41% since January, and their share values have leapt by 74% and have driven the value of the oil and gas sector on AIM to £6.5bn – which in turn is 16% of the entire AIM index. That said nine of the companies which make up the index are focused purely on exploration, and that could be a problem for future share prices, according to Alec Carstairs, oil and gas partner at E&Y. "While the potential upside may be large, the risks are high with many companies exposed to political and economic risk...
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