Westmount Energy Limited (AIM:WTE, OTCQB:WMELF) has noted the proposed acquisition of Argos Resources’ licence in the Falklands by JHI Associates, a privately-owned explorer in which Westmount holds 7.16%.
It sees the explorer take 100% ownership and control of acreage that in the North Falkland basin, adjacent to the undeveloped Sea Lion oil field., adding to its existing portfolio which includes prospective projects offshore Guyana.
The transaction will be part shares, part cash.
Argos chair Ian Thomson in a statement described it as an attractive transaction.
“JHI has ample cash reserves which are more than sufficient to cover the investments required to advance the exploration activities on Licence PL001 and to meet the financial capability criteria to support a licence extension to 31 December 2024,” said
“In addition to the North Falkland Basin Licence PL001, the transaction gives ARL shareholders access to potential upside in the Canje licence, offshore Guyana, in a basin that has been the highlight of the oil industry for several years, enjoying prolific success from numerous giant oil discoveries."
For Westmount, it adds an additional indirect potential for value accretion.