REG - Westmount Energy Ld - Investment in JHI Associates Inc.

Westmount EnergyAnnouncement

27/02/2019 07:05

RNS Number : 2027R
Westmount Energy Limited
27 February 2019
 


The information contained within this announcement (the "Announcement") is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this Announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
 
 
27th February 2019
WESTMOUNT ENERGY LIMITED
("Westmount" or the "Company")
Investment in JHI Associates Inc.
The Board of Westmount is pleased to announce that it has purchased 1,103,770 common shares in JHI Associates Inc. ("JHI"), completing on 26th February 2019, by way of a payment of approximately CAD$1.0 million in cash and the issue of 7,174,505 new ordinary shares of no par value in Westmount ("New Ordinary Shares"). An application has been made for the admission of these New Ordinary Shares to trading on AIM and when admitted these New Ordinary Shares will constitute approximately 13.2% of the enlarged issued share capital of Westmount. The cash payment has been funded from the Company's existing cash resources.
 
JHI is a private, Ontario-registered, company established in 2014 and focused on oil exploration opportunities in the emerging Guyana-Suriname Basin. The company's main asset is a 17.5% carried interest in the Canje Block covering over 6,000 square kilometres, offshore Guyana. This block is located adjacent to and in the same geologic basin as the Stabroek Block which has delivered twelve substantial oil discoveries since 2015, with reported discovered recoverable resources in excess of 5 billion oil-equivalent barrels to date.
 
ExxonMobil, which is the operator of both blocks, acquired in excess of 6,100 km2 of 3D seismic on the Canje Block in 2016 and this dataset is currently undergoing processing and interpretation with a view to evaluation of a future drilling program. 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. Subject to Guyanese government approvals and drillship availability, it is anticipated that the first well in the Canje Block will be drilled in late 2019 or early 2020, with the possibility to drill two or three additional wells by the end of 2020.
 
Following the above purchase, Westmount holds a total of 2,213,770 shares in JHI, representing approximately 3.0% of the issued common shares in JHI as of 21st December 2018. At cost, Westmount's holding in JHI equates to approximately 81.8% of the value of Westmount's gross assets as of 30th June 2018. Westmount reported a profit for the year ended 30th June 2018 of £0.6 million, whereas JHI incurred a loss before tax of USD $5.2 million for the year ended 31st December 2017.
 
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. Further disclosure with respect to JHI is available through SEDAR and their website at www.jhiassociates.com.
 
Related Party Transaction
Mr Gerard Walsh, Chairman of the Company, holds approximately 11.5% of the Company's existing issued ordinary share capital, and is therefore deemed to be a related party pursuant to Rule 13 of the AIM Rules for Companies. Of the total of 1,103,770 common shares in JHI to be acquired by Westmount, 500,000 common shares in JHI currently held by Mr Walsh will be acquired by the Company for cash consideration of CAD$437,500 and the issue of 3,250,000 new ordinary shares of no par value in Westmount, constituting a related party transaction.
 
The independent directors of the Company (namely Thomas O'Gorman, Dermot Corcoran and David King) consider, having consulted with Cenkos Securities plc, the Company's nominated adviser, that the terms of the JHI share purchases from Mr Walsh are fair and reasonable insofar as the Company's shareholders are concerned.
 
Following completion of the transaction, Mr Walsh will hold 8,675,000 ordinary shares in Westmount, representing approximately 16.0% of the enlarged share capital of the Company, and will retain a personal shareholding in JHI. The other JHI shareholders receiving New Ordinary Shares as part of the Consideration are expected to hold a total of 3,924,505 ordinary shares in Westmount, representing approximately 7.2% of the Company's enlarged share capital. Insofar as the Company is aware, Mr Joseph O'Farrell will hold approximately 6.0% of the Company's enlarged share capital following completion of the transaction.
 
Total Voting Rights
An application has been made for admission of the New Ordinary Shares to trading on AIM, which is expected to occur on or around 4th March 2019. Following admission, the Company's issued share capital will comprise 54,322,301 ordinary shares, which may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure Guidance and Transparency Rules.
 

For further information, please contact:
 
Westmount Energy Limited                              www.westmountenergy.com
David King, Director                                            Tel: +44 (0) 1534 823133
Jane Vlahopoulou                                              
 
Cenkos Securities plc (Nomad and Broker      Tel: +44 (0) 20 7397 8900
Nicholas Wells/Harry Hargreaves (Corporate Finance)
 
 
 
 
 
Template for notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them




1


Details of the person discharging managerial responsibilities / person closely associated




a)


Name


Gerard Walsh




2


Reason for the notification




a)


Position/status


Chairman




b)


Initial notification /Amendment


Initial notification




3
 


Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor




a)


Name


Westmount Energy Limited




b)


LEI


213800GJISWVBB5S3L84




4
 


Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted




a)
 


Description of the financial instrument, type of instrument


Ordinary shares of no par value




Identification code


ISIN: GB00B0S5KR31




b)


Nature of the transaction


Issue of consideration shares




c)
 


Price(s) and volume(s)


 


 


 


 




 


 


Price(s)


Volume(s)


 




 


 


CAD$0.135


3,250,000


 




 


 


 


 


 




d)
 


Aggregated information


 




- Aggregated volume


3,250,000




- Price


CAD$437,500




e)


Date of the transaction


26th February 2019




f)


Place of the transaction


Outside of trading venue




 
 




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