Westmount Energy buys another 250,000 JHI shares

Westmount Energy has purchased 250,000 shares in JHI Associates for $0.4m (£0.3m), it announced on Tuesday.

The AIM-traded firm described JHI as a private, Ontario-registered company established in 2014, focussed on oil exploration opportunities in the emerging Guyana-Suriname Basin.

It said the company's main asset was a 17.5% carried interest in the Canje Block covering more than 4,800 square kilometres, offshore Guyana.

The block is located adjacent to, and in the same geologic basin as, the Stabroek Block, which had delivered 18 substantial oil discoveries since 2015, with reported discovered recoverable resources of around nine billion oil-equivalent barrels to date.

“ExxonMobil, which is the operator of both blocks, acquired in excess of 6,100 square kilometres of 3D seismic on the Canje Block in 2016,” the Westmount board said in its statement.

“Subsequent processing and interpretation of this dataset has been used to define a substantial prospect inventory on the block with three prospects - Bulletwood, Jabillo, and Sapote = high-graded as potential targets for the initial drilling campaign.

“As a result of a 2018 farm-out to Total, JHI is carried for the drilling of up to four wells and is funded for the drilling of additional wells.”

It was expected that the first well in the Canje drilling campaign, Bulletwood-1, would be spudded before the end of the year or soon thereafter, with additional wells to follow-on in the first half of 2021.

Following the purchase, Westmount said it held a total of 5,363,770 shares in JHI, representing 7.2% of its issued common shares as at 13 November 2019.

At 2020 weighted average JHI transaction costs, Westmount's holding in JHI equated to approximately 67% of the value of Westmount's gross assets as at 30 June.

Westmount reported a loss for the year ended 30 June of £0.1m, whereas JHI reported a profit before tax of $43.3m for the year ended 31 December 2018.

“This investment is consistent with Westmount's strategy of seeking exposure to opportunities in the prolific Guyana-Suriname Basin, which the board considers to be a major emerging hydrocarbon province,” the board added.

At 1452 GMT, shares in Westmount Energy were up 6.67% at 16p.