Wessex upbeat about new UK licence

AIM-listed oil and gas group Wessex Exploration has secured a new 243.6 square kilometre-licence off the Hampshire and Isle of Wight coasts and appears very optimistic about its potential.

The signature of licence P1928, which was provisionally awarded to Wessex in January, was effective from February 1st. It is located between the company's existing onshore licences PEDL's 238 and 239, just east of the giant Wytch Farm oil field.

The area contains the "very interesting" Steelhead and Beluga leads and is easily accessible to explore the slightly deviated exploratory wells based onshore.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

"Technical work done to date ('back-stripping') before the application for the area was filed in the 26th Seaward Round, suggests that a large volume of generated oil previously trapped in the Wytch Farm structure, could have re-migrated a short distance into the area of the Steelhead and Beluga leads," Wessex said.

Wessex's Managing Director Frederik Dekker said: "P1928 is an area we have studied for several years and which we consider has great potential for hydrocarbon accumulations similar to, but smaller than the giant Wytch Farm. We fully intend to pursue an aggressive exploration programme on the acreage in a conventional manner, and alive to the fact that much of P1928 sits within areas of outstanding natural beauty."

Wessex has a 35% equity and working interest in P1928, while a subsidiary of Australian stock exchange-listed Norwest Energy NL is the operator of the licence with 65% equity and working interest.

The licence is a 'Promote licence' valid for a period of two years but can be extended into a full traditional licence with a total duration of four years with the commitment to drill an exploratory well.

BC