27 Oct 2014 07:00
WESSEX EXPLORATION PLC
(AIM: WSX)
Completion of Acquisition of
Hague and London Oil BV
Wessex Exploration PLC ("Wessex" or the "Company"), the hydrocarbon exploration company, is pleased to announce the successful acquisition of Hague and London Oil BV ("HALO"), following the announcement of the exchange of Heads of Agreement on 12 May 2014. HALO is led by an established management team with significant public market experience and a proven track-record in successfully developing international oil and gas exploration companies. Completion is conditional on admission to trading on AIM of the new ordinary shares being issued as consideration for the acquisition.
HALO brings US$1 million in cash and a 15% interest in the highly prospective Service Contract 54A ("SC54A") in the Northwest Palawan Basin, offshore Philippines. The licence block contains a number of existing discoveries in shallow water, along with further exploration potential. A retention licence was recently awarded to the SC54A partners for a period of three years. During this time, the partners will evaluate the data from existing 3D seismic and prior discoveries in order to determine an appropriate future work programme. On the expiration of this period, the partners can decide to move into the next exploration phase which would require one well to be drilled in 2018.
The partners in SC54A are NIDO Petroleum Ltd (operator, 42.4%, recently acquired by Bangchak Petroleum), Kairiki Energy (30.1%) and TG World (BV) Corp. (12.5%).
Consideration
Consideration for the acquisition will be satisfied by the issue to the vendors of HALO of 241,000,000 new ordinary shares in the Company, equivalent to approximately 25% of the enlarged issued share capital. Application has been made for those shares to be admitted to trading on AIM which is expected to take place on 31 October 2014.
Board Changes
As a result of the transaction, the principals of HALO, Andrew Cochran and William Phelps, will join the board of Wessex. Mr Cochran is to be appointed Chairman of Wessex and Mr Phelps a non-executive director. Both Mr Cochran and Mr Phelps were formerly executive directors of Coastal Energy Company ("Coastal"), and were involved in the sale of Coastal to Compania Espanola de Petroleos, S.A.U. ("CEPSA") for approximately C$2.3 billion in November 2013. Prior to Coastal, Mr Cochran was the CEO of Dominion Petroleum Ltd ("Dominion"), which was sold to Ophir Energy Plc in 2011 in an approximately $250mm transaction. Before Dominion, Mr Cochran was a founding Director of Salamander Energy Plc; having served as Business Development Director and member of the Board from 2005-2009. Both Mr Cochran and Mr Phelps have recent, and relevant, experience in the South-East Asian upstream sector as well as oil and gas transactions and corporate finance globally.
Mr. Malcolm Butler will step back from his previous role as Chairman and interim Technical Director to become a non-executive director.
Final Results
Wessex expects to report its Final Results for the year to 30 June 2014 in November.
Malcolm Butler commented:
"We are delighted to have delivered a transformational transaction to our shareholders that we hope will create value over the long term. The acquisition of HALO brings a number of benefits to Wessex which include a prospective offshore block in the Philippines that we believe is capable of early production, a sizeable cash contribution, the addition of two highly experienced new directors and support from new shareholders."
Andrew Cochran commented:
"We are excited by our investment here and the opportunity to grow the Company through its next stages. We look forward to working with our fellow shareholders and, with their support, expanding further while continuing to actively develop the portfolio in order to maximize value for all."
For further information please contact:
Wessex Exploration PLC +44 (0)20 7960 0267
Malcolm Butler, Chairman
Andy Yeo, Chief Financial Officer
HALO
Andrew Cochran, CEO
Natalia Erikssen, IR / PR enquiries +44 (0)7809 44 0929
WH Ireland, Broker & Nomad +44 (0)117 945 3470
John Wakefield (Corporate Finance)
Yellow Jersey PR +44 (0)7799 003220
Kelsey Traynor