Westmount takes 12.7pc stake in JHI Associates

Westmount has purchased 1,550,000 common shares in JHI Associates, it announced on Thursday, by issuing 18,290,000 new ordinary shares, representing 12.7% of its enlarged issued share capital.

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.

Its main asset is a 17.5% carried interest in the Canje Block covering more than 4,800 square kilometres, offshore Guyana.

Westmount said the block is located adjacent to, and in the same geologic basin as, the Stabroek Block, which delivered 16 substantial oil discoveries since 2015, with reported discovered recoverable resources of more than eight billion oil-equivalent barrels to date.

ExxonMobil, which is the operator of both blocks, acquired more than 6,100 square kilometres of 3D seismic on the Canje Block in 2016.

Subsequent processing and interpretation of that dataset had 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.

Subject to Guyanese government approvals, drillship availability and the impact of the Covid-19 pandemic, it was expected that the first well on the Canje Block, Bulletwood-1, would be spudded in the fourth quarter of 2020, with the possibility of additional drilling by the end of the year.

“Following the purchase, Westmount holds a total of 5,113,770 shares in JHI, representing approximately 6.9% of the issued common shares in JHI as at 13 November 2019,” the board said in its statement.

At cost, Westmount's holding in JHI equals 61.8% of the value of Westmount's gross assets as at 31 December 2019.

Westmount reported a profit for the year ended 30 June 2019 of £2m, 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.”

At 1316 BST, shares in Westmount Energy were up 5% at 21p.