Westmount Energy Limited (AIM:WTE, OTCQB:WMELF) told investors its exploration results have provided encouragement, though they are yet to deliver a standalone commercial discovery.
Moreover, the company said that it is heartened by the industry's continuing appetite for exploration acreage in the Guyana-Suriname basin – highlighting investments by Hess, Chevron, TotalEnergies, Qatar Petroleum and ExxonMobil.
Exxon remains the leader in the basin, with its prolific run of well successes at the Stabroek block in recent years, and it is the operator of the Canje and Kaieteur blocks in which Westmount owns indirect interests.
Westmount added that applications for environmental authorisation submitted to the Guyanese EPA by ExxonMobil augurs well for potentially extensive new drilling programs on these blocks after the re-evaluation groundwork is completed.
In Tuesday’s interim results statement, the company said: “Drilling activity in the Guyana-Suriname basin continues to accelerate driven by the industry's focus on 'advantaged barrels' as a result of the unique combination of prospect sizes, reservoir quality, low carbon intensity and low breakeven metrics ($25/bbl-$35/bbl), that is available offshore Guyana.
“While the initial drilling outcomes from the Westmount portfolio have yet to deliver a standalone commercial discovery, the results to date provide encouragement and must be viewed in the context of initial 'large step-out' wells evaluating giant stratigraphic prospects while seeking to establish the perimeter of the multiple play fairways both to the northeast and southwest of the prolific Stabroek block.”
“Westmount's strategy remains one of offering shareholders exposure to high impact drilling outcomes,” it highlighted.
Westmount’s investees are described in the statement as being well funded for participation in near-term drilling opportunities, and the company highlighted that consolidation manoeuvres may bring book value realignment while offering risk diversification and exposure to multiple additional high impact drilling events.
It added: “Your board remains focused on investment opportunities and deployment of capital that gives additional exposure to drilling in emerging basins. There are likely to be more consolidation opportunities amongst the junior players within the Guyana-Suriname Basin, as exploration matures and in response to risk management demands of investor capital.”
Earlier this month Eco (Atlantic) Oil & Gas Ltd (AIM:ECO, TSX-V:EOG) struck a deal to acquire JHI Associates Inc, an exploration company in which Westmount owns a 7.16% interest, for US$52mln in shares.
Prior to the transaction Westmount also had 1.5mln Eco shares in its portfolio, representing a 0.74% interest in the AIM-quoted explorer.
Westmount holds 5.65mln JHI shares and under the terms agreed between Eco and JHI it will, as a shareholder, receive 1.1994 Eco shares for every JHI share it owns.