Nice Rns...23 Apr 2014 16:50
"Wessex is pleased to inform shareholders that it is now in advanced discussions with the vendors of a company holding an interest in a prospective offshore asset in the Far East, which the Directors believe is capable of near-term production. The acquisition, to be paid for by way of shares, will hold sufficient cash to cover its contractual drilling obligation and will bring with it a highly experienced, well-known and successful board level management team.
Further details of the intended acquisition will be announced when the Heads of Terms are signed.
However, completion of the transaction is conditional, inter alia, on shareholders voting against all seven resolutions in the forthcoming General Meeting."
Or put another way, they have a mystery deal, which is so amazing and that they are only going to tell you this big secret if you do what they want.
Without providing any serious details about their proposal for transforming Wessex, how on earth are shareholders meant to trust and evaluate such a vague announcement?
We contacted the Chairman for further details regarding the transaction having volunteered to sign a confidentiality agreement, and for the counter-party to remain anonymous not least because the proposed board is very capable of assessing any proposed global oil and gas acquisitionhaving extensive experience in Canada, USA, UK, Europe, Russia, Central Asia, Africa, Australia, Indonesia, Malaysia and Thailand and so could assist the Company.
The Chairman replied that he would not provide these details.
As such we cannot comment on the transaction's commercial terms, and on the basis of the Company's reply we can only conclude that the purported deal is designed solely to encourage shareholders to vote against our proposals at the forthcoming shareholders meeting. What is clear from the limited amount disclosed is that a transaction of this nature would almost certainly constitute a reverse takeover, and result in enormous dilution for all shareholders at the current low share price of .52 p.
Also we cannot tell you what the current management stand to gain, financially or otherwise from the transaction, or whether the counter-party is related to the current management.
History of Key Costs, Financial Performance, and Operating Cash flow
Over the three financial years from 2010 to 2013 including the December 31 2013 interim accounts your current board reported:
Revenue: Nil
Cash inflow: Nil
Administration Cash Costs (including directors' remuneration) : GBP4.5 million (GBP260,000 for 3 months 2014)
Operating losses: GBP12.6 million
Proven Producing Reserves: Nil
The Chairman and board has presided over the destruction of a cash reserve of GBP15 million, reducing it to GBP2 million in less than 2 1/2 years with no tangible value creation to show for it.
The April 4 2014 Wessex news release-"Update on South of England Strategy" confirms that the current board ha