Azonto, dual listed on the Australian Securities Exchange and the AIM market, has been described as an "eight-year-old start-up", having recently restructured after facing extinction with a well commitment on the Ivory Coast it could not afford to fund due to misinterpreted seismic data.

It has now re-tailored its strategy from elephant hunting to refitting the project size to the resource, and is now focused on a gas to power development - an increasingly common theme in Africa.

While Azonto having major Vitol E&P in its corner in Ivory Coast and Ghana is likely to help debt funding, along with the World Bank group's International Finance Corporation, the market for small-cap oil and gas players in the UK remains "tough" and "very selective", executive director Andrew Rose told Energy News during a brief visit to Perth this week.

Juniors are struggling in the third year of a generally down, soft market in London, with many of the generalist funds having exited the sector altogether. He said the funds were burnt by the lack of exploration success, with companies raising money for one or two-shot wells which were not successful.

"Also, particularly the case in the North Sea and generally elsewhere, projects have come in over budget and late, so there has been a continual dribble of disappointment compared with expectations, and a lot of investors have simply had enough, and can no longer justify being in the game," Rose said.

"The flipside is that, on a fundamental basis, everything is looking very cheap. Virtually everything in analyst research is a buy, standing at a 40% discount to fundamental value, yet at the moment the catalyst is not there to move investors into it."

Aside from the investor exodus, things are suddenly looking a bit rocky with the weakening oil price combining with increasingly skittish markets generally around global geopolitical issues and the question of the US withdrawing quantitative easing support, which isn't helping the small end of town.

In such a tough market to raise money, Rose maintains that the old chestnut - a good story and management with credibility that has delivered before - is what investors demand, at the very least. While both Azonto CEO Rob Shepherd and Rose have experience turning businesses around and sold them within the sector, good assets are still essential.

"The profile that everybody wants to buy is nice, safe, steady production coming from a non-controversial area," Rose said.

The impact of the US shale story has also been enormous on the junior oil and gas sector, even in the UK, as both companies and investors chase what looks like steady production - despite the rapid drop-off rate that those who actually operate shale wells experience - in a politically safe country like the US.

"That has been a big factor in the ‘risk-off' nature of investors," Rose said.

"Big oil has said it will put its marginal investment dollar into US shale. There has been quite a big asset turnover, particularly in places like Nigeria where there has been a big divestment by the majors for onshore stuff.

"People are generally hanging onto the offshore stuff which is bigger and has better critical mass."

Nigeria also has an active indigenisation program whereby gives tax breaks to indigenous companies taking on assets divested by the international players - which Rose said was not really "forced nationalisation", rather "a government incentive scheme to facilitate the transition of assets that aren't getting the investment and attention and going fallow".

On the asset side, this throws up opportunities as there is movement in the oil and gas space, but equally companies need to be well funded to play - hence Azonto's strategy as a small company to partner with bigger ones.

"We have Vitol but we are also talking to one or two large African finance institutions about partnering with them in developing oil and gas fields in Africa," Rose said.

"So we're bringing the expertise and they're bringing the money, doing it as a JV at the asset level rather than trying to raise the money yourself if you're starting off the size of Azonto, which is quite a big dilutive ask."