Oil industry veteran David Bramhill has summarised in typical style what he described as significant progress for Wessex Exploration, the Bristol-based hydrocarbon exploration company. He said in his chairman's annual statement for the year to June 30: "There is no in-between status in the speculative world of oil exploration – it is a make or break situation."
And Mr Bramhill is very definitely in the 'make' category on the back of a potential billion-barrel oil bonanza.
It follows Tullow Oil's confirmation earlier this year of vast oil reserves known as the Zaedyus discovery off the coast of South America. Wessex has a 1.25% stake – a share worth at least $60m (£37.5m), according to industry analysts.
WH Ireland analyst Tom Elder said following the discovery that even without drilling another well he reckons Tullow could increase its resource estimates for the discovery. And this would in turn make the Wessex interest more valuable.
“Our $60m assessment of the Guyane assets is, in our view, the base case as it cannot capture, at this juncture, the possible fruits of the re-interpretation program that will likely follow completion of Zaedyus,” Elder said.
He added: “This valuation also does not include value from other Wessex assets including Wytch Farm and the Mozambique Channel.”
Mr Bramhill said: "I am very pleased for the shareholders who have supported us during the drilling of the Zaedyus well," adding that he had taken immense pleasure in the success of Wessex Exploration to date.
He said Wessex's AIM admission on the London Stock Exchange in March, accompanied by a £3m institutional placing facilitated the funding of the company's share of the well in Guyane and the advancement of its other projects' interests in Juan de Nova Est located in the Mozambique Channel, Southern England and Western Sahara.
He added: "The exploration portfolio and strategy put together in the early days of the formation of Wessex Exploration are set on firm foundations and I am confident that further good news on our projects, in particular Guyane, will be forthcoming in the future."
Meanwhile Wessex is evaluating its next step at Juan de Nova, an island in the Mozambique Channel which is an overseas territory of France. Wessex holds a 70% stake in an area comprising 9,100 square kilometres. The terms of its permit require substantial investment. A farm-out campaign, commissioned by Wessex Exploration and managed by ENVOI – a company offering specialist marketing and advisory services to the oil and gas industry – is showing promise, said Mr Bramhill.
Elsewhere Wessex Exploration and Australian partner NWE Mirrabooka have applied to explore an extensive area of Bournemouth Bay, to the east of the Wytch Farm oilfield. The results of these applications are expected in late 2011 or early 2012.
Mr Bramhill said Wessex – which also holds exploration interests in a remote area of the Western Sahara – has enough money to fund the initial Guyane drilling programme and to progress other exploration activities. In addition, the company is debt free.
The company's losses before tax were up from £388,895 to £1,336,845.
