This past week I was in London for a partner. Over the years I have noticed that in the US small public companies in the oil and gas sector have a difficult time raising monies. The US markets typically are not the place to be for small companies that need funds. Where to go. Well its usually the Canadian markets. The Canadians have always been geared toward small and mid cap companies, raising large amounts of monies with little problem in boom times. Recent changes in the laws involving trusts and now Alberta increasing royalties has just all but killed the equity markets. Trudeau did a similar thing in the early 80s driving the Canuks south to Denver, Dallas and Houston. Its happening again.
Also we have to consider how our northerly neighbors look at US markets. Over the past 20 years its easier for Canadian companies, whether based in the US and Canada to raise monies on properties in Canada or International. The US typically is treated as the last place to go. Partly because of the lititagous nature of the US and partly because it requires economic and political adeptness that is not necessary in the rest of the world. The Canadian Oil & Gas sector tends to be all in Calgry, more polite and do not understand how to deal with private landowners or good old boys.
So where to go. The market that is now taking its place as the funding center for the oil and gas sector is the AIM in London. With good properties and management, plus a good contact there is a boat load of money can be raised. The AIM is like the wild west or Vancouver was ten or more years ago. In comparison its actually easier to have an oil company on the OTC then on the TSX. The SEC allows to many OTC companies to get away with noncomplaince. But because of that its difficult to raise money with small caps on the OTC. But the AIM is somewhat more transparent.
Unless Canada comes back to the equity market the place to be is AIM for the next few months. If we remember, the railroads were built by the British and Scots when no one in the US would put up the cash. They are back and rebuilding the US oil industry.