WHILE West Oil shares are struggling to reach five cents, the company has been far from lethargic during the past three months.
The company has achieved full subscription on a $1.6 million non-renounceable rights issue, has held two farmins to Carnarvon Basin permits and has announced a proposed deal to be part of two Timor Sea wells early next year.
The new agreement, with Daytona Energy Corporation, will require $700,000 from West Oil, which it intends to raise in a new $800,000 placement.
One big negative, however, is that Andarko Petroleum, which will fund and drill the Timor Sea wells, holds rights of first refusal over Daytona’s interests in the two separate permits. West Oil managing director Charles Morgan believes the market is probably acting correctly, waiting on Andarko’s decision, as well as showing the effects of some of the new issued stock hitting this market.
But if Andarko waives its rights, West Oil can boast a list of seven wells to be drilled within the next 18 months and interests in AC/P27 and AC/P25, to complement its other Timor Sea holdings, in AC/P22, AC/P26, AC/P28 and ZOCA 96-16.
The new placement comprises 20 million four-cent shares, each with a June 30 2003 10-cent option. Forty per cent of the shares and options on issue will be subject to shareholder approval, as is a $150,000 advance to Daytona, to be converted into Daytona shares and attached options.
