IS an acquisition frenzy about to engulf Britain’s independent oil and gas companies? Italian giant Eni’s £1.5 billion bid for Burren Energy certainly makes it more likely.

One argument is that Eni’s bid is asset-specific – the strategic fit is compelling because Eni is a fellow shareholder in the M’Boundi field in the Congo, one of Burren’s biggest assets. A more convincing view is that the bid is part of a dash for assets by oil giants and national oil companies.

The last wave of consolidation kicked off seven years ago and British Borneo, Enterprise Oil and Lasmo were hoovered up over two years. Doubters will argue that the industry was very different in 2000 – oil prices were recovering after collapsing to $10 a barrel. Today they are hitting new highs of more than $80 a barrel.

However, as Morgan Stanley’s analysts point out, there are key similarities. In 2000, many oil groups were more bullish about oil prices than equity investors. Today that’s also true. Just look at the hikes in capital spending and mutterings about deals involving big integrated groups for evidence of optimism.

The new element in the mix is the emergence of cash-rich national oil companies and Middle East groups desperate to snap up assets. It is a potent cocktail that makes a deal frenzy look almost certain.

There have been mid-sized and smaller deals in the past 12 months – Tullow’s takeover of Hardman Resources, two smaller acquisitions by Cairn and Dana Petroleum buying Devon Energy’s Egyptian assets. Now the focus is shifting to taking out the larger independents.

Burren has so far rejected Eni’s bid, but its future as an independent will probably be over if a counter-bidder or higher offer emerges. Other companies must be on bid alert, including Premier Oil, which received a takeover approach almost a year ago. The pick of the bunch are probably Dana, Soco and Tullow. The bidding battles will be fierce, and it is time to buy in.

Air Partner

TWO YEARS AGO this column congratulated itself on having tipped Air Partner, the aircraft broker, noting that the shares had broken through 500p, and telling readers to hang on in there. Last week, that confidence was repaid in spades.

The company reported ripping results (including a total dividend payment of 80p a share). The shares, which have risen inexorably in the intervening period, perked up again, closing the week at £12.85.

Some might now be tempted to take profits, arguing that we are at the top of the cycle, and that the demand for private jets from tycoons and football stars can only go in one direction – down.

This misses the point that Air Partner is not reliant on high-rollers. A third of its business comes from governments, two-thirds from companies, and it is geographically diversified, covering 15 countries. The strength of the results also indicates there is more to come – again the advice is hang on in there.

grant.ringshaw@sunday-times.co.uk

Times Recommends

• Barclays writedowns rise to £1.7bn
• Bank chief raises spectre of British recession
• EDF's offer for British Energy faces opposition