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Wessex Exploration

  • BY: Andrew Hore |
  • POSTED: 16/10/2013 |

Oil and gas explorer Wessex Exploration will not fully provide the next round of funding for offshore drilling at Guyane, French Guiana, which means that its 1.25% share in the licence will be diluted. 

Wessex’s main interest is 1.25% of a licence area offshore of Guyane in Africa, which it holds via a 50% stake in Northpet Investments Ltd, the owner of 2.5% of the licence area - Northern Petroleum owns the rest. 

The costs of drilling have been higher than expected and Wessex will not provide up to £1.5m of future funding requests for the licence area. Wessex has cash of £4.4m but much of this cash has already been committed and cash could have run out next year if the £1.5m is paid. Northern will have to finance the shortfall and its stake in Northpet will rise to 56%, with the effective interest in the Guyane licence increasing to 1.4%. Northern recently raised cash from the sale of its interests in the Netherlands.

Wessex is reducing overheads by one-quarter in order to conserve more cash. There was a £5.8m cash outflow in the year to June 2013.

At 0.83p a share, Wessex is valued at £5.7m. Wessex joined Aim in March 2011 when it raised £3m at 3p a share.

At the end of 2011, £12m was raised at 5p a share and the following year a 10p a share bid from Total was rejected. Investors were attracted to Wessex following the 2011 Zaedyus oil discovery in Guyane but the three wells that have been drilled on Wessex’s exploration area were unsuccessful. A fourth well is being drilled and will be completed by the end of 2013. There is unlikely to be any drilling in 2014.

Wessex has other interests in the UK and western Sahara.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFSeptember2013_48.pdf

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