Shareholders in Wessex Exploration, the Bristol-based hydrocarbon prospecting company which floated on AIM a year ago, look set to share in a £72m bonanza following a possible cash offer from French oil giant Total for the entire issued and to-be-issued share capital at a price of 10p per ordinary share.
The Wessex board of directors, led by chairman David Bramhill and managing director Frederick Dekker, has confirmed that in the absence of a higher competing offer and subject to shareholder consultation it would "currently be minded to give its recommendation should a firm offer be made at this price by Total".
The company – which also has interests in projects in the Mozambique Channel, Southern England and Western Sahara – has a 1.25% working interest in the Guyane Maritime Exclusive Exploration Licence which includes the area known as the Zaedyus discovery – potentially a billion barrel-plus oil field. Tullow Oil, which announced the Zaedyus discovery in September, is a 27.5% stakeholder in the project. It operates the well along with Shell (45%), Total (25%) and Northpet Investments (2.5%), a 50/50 joint venture company owned by Wessex and Northern Petroleum.
And the fact that discovery stakeholder Total – with its inside knowledge – has bid 10p for Wessex shares suggests that this is a fair price. Observers think it unlikely that any outsiders will step in with a better offer.
Shares in Wessex, whose shares traded as low as 2.3p in August ahead of the oil discovery, stood at 9.5p today. Wessex ended 2011 with net cash of £11.5m after also extending its interests in licences off the southern coast in the English Channel.
Total must decide whether or not to make a formal offer by April 16.
