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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...
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Wessex Exploration: Principal shareholders snub Total’s £71 mln takeover
March 26 2012, 12:31pm
Wessex Exploration (LON:WSX) shares rose as the junior revealed that its shareholders have turned their noses up at Total’s £71 million takeover bid.
Last week, Total announced it had made an approach to buy Wessex with a 10p a share cash offer.
At that time, it said that the Wessex board ‘would be minded’ to give its recommendation to an offer at that price, subject to shareholder consultation and in the absence of a higher competing offer.
Today, however, Wessex revealed that having consulted its principal shareholders, its directors unanimously believe the current approach undervalues the company.
Wessex shareholders consider the price of 10p a share inadequate to secure their support for any offer which Total might make at this level, the company said in a stock exchange statement.
The company says it is fully funded for all its current requirements including participation in a Zaedyus appraisal well in addition to a further well to explore the scope of the new hydrocarbon frontier which the initial discovery well established.
Total is one of three major oil companies partnered in the Guyane venture that made the large Zaedyus oil discovery last year.
The other partners are Tullow Oil (LON:TLW) and Shell (LON:RDSB). Total is the largest stakeholder with a 45 per cent interest.
Wessex owns a 1.25 per cent interest in the venture, alongside Northern Petroleum (LON:NOP) which also has a 1.25 per cent stake.
Both AIM-quoted shares were on the rise following today’s statement. Northern shares were up 6p, or 7 per cent, trading at 93p each. Meanwhile, Wessex shares edged slightly higher to change hands just below the indicated 10p takeover price.
In September, the exploration well found good quality oil in a turbidite fan system. Analysts believe the discovery has ‘multi-billion barrel’ potential.
The discovery opens up the prospect of a whole new oil region. And it subsequently de-risked the venture’s associated prospect inventory offshore French Guiana, Suriname and Guyana.
Earlier this year, the primary venture partners started planning a follow-up exploration and appraisal programme, which is expected to include 3D seismic acquisition and a drilling programme, scheduled to commence in mid-2012.
