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.
Wessex Exploration: Further work at Guyane is justified, says WH Ireland
Today's statement from Wessex Exploration (LON:WSX), which cites the update from the operator of the Guyane Maritime block off the coast of French Guiana, suggests further work in the promising frontier basin is justified, says WH Ireland.
The update came from Tullow Oil (LON:TLW), which was the operator of the block, but is handing that responsibility over to partner Shell (LON:RDSA).
Tullow revealed that a comprehensive follow-up exploration programme will be carried out on the potentially world class oil basin - slated to begin in the middle of this year.
It comes after Tullow last September announced that the Zaedyus exploration well made a 'significant' oil discovery with 72 metres of oil pay in two turbidite fans.
It proved the extension of the Jubilee play across the Atlantic and opened up a new oil basin. Wessex Exploration owns a 1.25 per cent stake in this potentially major new oil area.
"This project update would indicate all is ‘on track’ for the Zaedyus discovery - that appraisal work will confirm the initial discovery prognosis," said analyst Tom Elder at WH Ireland, which maintains its 'buy' rating.
The broker estimates that further wells will have an ‘all in’ cost of around $160million translating to a $2mln per well commitment for Wessex.
"Therefore Wessex’s recent capital raising ($17.9million) ensures the company is fully funded for exploration and appraisal participation in both the near term and beyond," said Elder.
The analyst added: "WH Ireland expects to update its valuation of Wessex’s interest in the Guyane licence area as additional substantive information flows from the operator. It is expected this additional data could underpin a substantial uplift in our valuation."
