EnCore Oil finance director Eugene Whyms raised £289,000 from the sale of 2m shares in the oil and gas explorer at 14.45p each. That leaves him with 7.4m shares.
Whyms is a founder of EnCore, which reversed into AIM-quoted Oil Quest Resources in March 2006. At that point, Whyms owned just over 8.5m shares. The EnCore share price peaked at 58.5p in the first half of 2008.
EnCore's exploration focus is the UK Continental Shelf but it also has onshore assets in France and one exploration licence offshore of Africa. EnCore is talking to AIM-quoted Egdon Resources about the sale of its onshore assets in France and the UK plus a stake in the Ceres gas field which commenced production this month. EnCore would receive Egdon shares in return for the assets but it would not take a stake that exceeded 29.9% of Egdon. Egdon specialises in onshore oil and gas assets.
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In August, EnCore sold its 15% stake in the Breagh gas discovery to RWE in return for $44.7m and the repayment of inter-company loans of £14.7m. One-fifth of this cash will be held in escrow for one year in order to cover any warranty claims. Including the cash in escrow, house broker Hanson Westhouse reckons that EnCore has cash of around £46m - almost equivalent to EnCore's market value.
EnCore has approval to buy back up to 100m shares, which is nearly one-third of its share capital. That is equivalent to around £15m at the current share price. Earlier this month, EnCore bought back a total of 1.25m shares at 14.5p each.
That still leaves plenty of cash to finance an appraisal well on the Cladhan discovery and an exploration well on the Catcher prospect.
There are also plans for a gas storage project at Esmond in the North Sea. There is a shortage of gas storage capacity in the UK. Esmond produced gas between 1985 and 1995. EnCore wants to find a partner to help finance this development. The total capital expenditure on the project is estimated at £1.1bn, while operating expenses will be £15m a year. Even if everything goes to plan the storage project will not be completed until 2015.
Top Director Buys
Value: £22,500
Value: £22,500
Value: £19,500
Value: £14,492
Value: £12,500
Top Director Sells
Value: £290,000
Value: £83,488
