When it comes to the London AIM market, everyone in Houston is an expert.

"The reality is, most of them have no idea what they're talking about," West Griffin, chief financial officer of Houston-based Energy XXI said at a recent program about the stock exchange. "They probably know someone who knew someone who listed. Living things is very different than being told about them."

Griffin spoke at a seminar in Houston sponsored by Noble & Co. Ltd. Energy XXI started as a special purpose acquisition company (SPAC), which is basically private equity with a public ticker, Griffin said. It did an IPO in October 2005 and raised $300 million. Since then, the Gulf of Mexico-focused company has completed three acquisitions, including a package of assets from Houston-based Pogo Producing Co.

"AIM has been critical to Energy XXI's rapid growth," Griffin said. "We evaluated using the SPAC format in the U.S. and we had two fundamental issues; you must use 80% of your funds in your first deal and there is a long delay between announcing the deal and closing."

To deal with these issues, Griffin and team developed a "Euro SPAC," which accommodates multiple draws, facilitates rapid shareholder approval and allows the company to list on AIM, so it has limited dealings with the SEC.

"Dealing with the SEC is like dealing by letter with someone in Europe in the 1800s," he said. "The fastest the SEC had ever approved a SPAC in the U.S. was four months. The only way to hold a deal for four months was to pay more than anyone would ever reasonably pay, put down a huge deposit, or buy the properties from our mothers, who didn't own any properties."

Listing Energy XXI on AIM allowed the company to get started with acquisitions much faster, Griffin said. He also disagrees with the notion that because the AIM disclosure process is different from that of the U.S. exchanges, the companies listed on AIM are not of the same caliber as the companies listed in the U.S.

"I could not disagree more," he said. "The disclosure process on AIM is more thorough and better than anything in the U.S. because of the competent person."

The competent person (CP) must be a registered professional firm with five years of experience in hydrocarbon reserve estimation. Their role is to provide comfort as to the assets held by a company and their underlying value. As part of the listing process on AIM, the CP prepares a CP report, which is included in the offering document when the company does its IPO.

"The CP provides a full reserve report on AIM that covers P1 and P2 reserves," Griffin said. "It's very hard to develop a model of how a company will do based on what is disclosed through the SEC. It's easy to do with the companies listed on AIM."

The AIM listing process also involves a nominated advisor, or "Nomad," which offers assistance on an ongoing basis to every company listing on AIM.

"We refer to our Nomad as the 'benevolent nanny,'" Griffin said. "We speak to him every two or three days at least. We're in constant communication. They hold your hand through the whole process and make sure you don't stub your toe."

Griffin said another difference between listing on AIM and listing in the U.S. is the verification process, which he says doesn't really exist in the U.S. and is primarily done through third parties.

"On AIM, it gets personal," he said. "We had to sit down for six hours with some directors from AIM and we had to personally verify each fact about the company through a Q&A. On top of that, they require personal indemnity by directors for misstatements during the verification process. So if you say you're good for $750,000 and your disclosure ends up being incorrect, they just ask, 'Will that be check or wire transfer?' It's very straightforward."

Other benefits of listing on AIM include the advantage of not having to have a proxy statement if the target acquisition is smaller than the company; the ease of a one-page form to register small equity issuances; and AIM's generally quick response time.

"AIM is structured to facilitate rapid growth," Griffin said. "You can get a response from AIM within about two days. Has anyone ever heard of that response time from the SEC?"

Although Griffin and Energy XXI have benefited from listing on AIM, the exchange isn't without its downfalls. "If you've raised most of your money from U.S. investors, you have to have a certificated deal with them, it can't be electronic," he said. "This hampers your trading. It's a pain to actually clear a trade on a certificated deal, which takes about two weeks.

"This also means all trades pass the CFO's desk and we have final approval. This means you end up trading by appointment only, so it's not the volume of trades you would normally hope for."

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