www.wessexexploration.com
Wessex Exploration plc (Wessex) was formed to explore the Wessex and Weald Basins of southern England at a time when the prolific Sherwood Sandstone reservoir had just been discovered in the giant Wytch Farm oil field and smaller oil and gas discoveries were being made in the Weald Basin. Wessex completed a regional geological study of these basins and concluded that the complexity of the stratigraphy, structure and geological history of the basins required a careful, disciplined and highly technical approach to hydrocarbon exploration and that additional significant hydrocarbon potential remained in place.
COMPANY Q&A: Fully funded Wessex primed for 2012
Its shareholding in the potentially world class exploration area of the coast of Guyane has excited a great deal of interest in Wessex Exploration (LON:WSX). But what can we expect from the company in 2012?
Q: It has been quite a year for Wessex Exploration. What have been the highlights?
Wessex Exploration: As your question indicates it has been a successful year for Wessex and there are several highlights in our opinion. The AIM admission in March 2011 was material to us. The board of directors are all supporters of AIM and we are proud to be able to be part of this section of the London Stock Exchange.
It is also good to see that our investors in the main are seeing good returns from their investment at this moment in time. The AIM admission accompanied by a £3 million placing was really the catalyst that enabled Wessex to fund the initial French Guyane drilling programme.
In September, Tullow Oil announced the Zaedyus discovery offshore Guyane, having encountered 72 metres of net oil pay in two turbidite fans. Wessex holds a 1.25 per cent interest in this practically unexplored licence and we believe that there could be more to come in the future. The Zeadyus well was to test whether the Jubilee play offshore Ghana, successfully established in west Africa, was mirrored on the other side of the Atlantic. This theory has now been confirmed by the discovery and indicates the possibility of a new frontier basin in the waters of Guyane.
Another very important highlight was the successful institutional placing in December 2011 of new ordinary shares raising £12 million before expenses. This funding has allowed Wessex to react financially to any further financial requirements of the Guyane project for at least the next eighteen months.
Q: Tell us a little more about the news flow you expect in the coming year. What in particular should we look out for?
Wessex: In general the news flow will focus not only on Guyane but also Juan de Nova in the Mozambique Channel and southern England. As announced the Guyane programme will see an extensive 3-D seismic acquisition programme conducted accompanied also by the drilling of at least two wells – subject to approvals.
Q: Raising £12 million for a company of your size in the current difficult equity markets is no mean feat. What does this tell us about Wessex’s prospects?
Wessex: In these markets we believe it amplifies the interest in Guyane and the potential returns should the ongoing exploration programme be successful.
Q: Guyane is of particular interest and its progress in the next year. What should we expect?
Wessex: As mentioned above, the operator of the project sets the speed of exploration and development. Tullow`s comment: “The Zaedyus discovery marks the start of a significant and potentially transformational long term exploration and appraisal campaign” is a fair enough summing up.
Q: Of course the excitement over Guyane ignores the fact that you have other exploration licences . Tell us a little more about them and what we should expect in the next 12 months.
Wessex: Yes we have a good mix of international projects. Wessex holds 70 per cent of the Juan de Nova project in the Mozambique Channel, with Global Petroleum holding the further 30 per cent.
The atoll of Juan de Nova, an overseas territory of France, lies to the northwest of Madagascar in the Mozambique Channel. The imminent development of hydrocarbon discoveries by other companies in the area has started to focus new industry interest in this underexplored part of the African continent.
A thick stratigraphic section of sedimentary and volcanic rocks ranging from Permian to Tertiary underlies the permit area and the geology suggests the existence of at least two different hydrocarbon systems in the region. A farm out campaign in respect of Juan de Nova, managed by ENVOI, a company offering specialist marketing and advisory services to the oil and gas industry, is showing major promise.
Proposals have been received by the company and management is considering these offers which will assist in the future exploration of this project.
Wessex holds interests of 50 per cent and 25 per cent respectively in two petroleum exploration and development licences (PEDLs) located in southern England - PEDLs 238 and 239. The remaining interests are held by a subsidiary of an Australian listed group, Norwest Energy.
The Wessex Basin of southern England is a well known and proven hydrocarbon province which includes the giant Wytch Farm oilfield which has produced over 400 million barrels of oil to date. Wessex and its partner will continue evaluation of their interests with the objective to prove up existing leads, with a view to drilling over the next two years.
