LONDON (ShareCast) - After thinking about it for a few weeks French oil titan Total has decided not to make a bid for Wessex Exploration, much to the relief of the Wessex board which was worried Total would get its hands on the UK oil and gas explorer's assets on the cheap.

Having been obliged by a sharp increase in the share price of Wessex to announce on March 19th that it had approached Wessex with a 10p a share offer for the company, Total said it is no longer contemplating a bid for the AIM-listed explorer.

Initial indications were that the Wessex board would welcome an offer at Total's indicated price, but Wessex changed its tune after consulting with its major shareholders, and said a 10p a share offer would undervalue the company.

Wessex's shares have never traded higher than 10p since the company floated on AIM at the end of March 2011. The shares fell 0.875p to 8.125p in the first hour of trading following Total's announcement, having dipped as low as 7.80p at one point.

Wessex welcomed Total's withdrawal of interest and noted that, having raised £12m (gross) of additional funding in November 2011, the company is fully funded for all current requirements, including participation in a further Zaedyus appraisal well and at least one additional well.

Drilling is expected to commence in mid-2012 to follow up on the Zaedyus oil discovery in late 2011 that demonstrated the prospectivity of this licence area off South America. To undertake these operations Shell, the operator, has contracted the Stena DrillMax ICE drill-ship, which is expected to commence operations mid-year subject to government consents.


JH

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