ABERDEEN, UK --Venture Production has made a cash/shares offer for UK independent Wham Energy. The offer values the company's existing share capital at around $28.61 million.
Wham was founded in 2003 to focus on exploration in the UK southern North Sea gas basin. Its exploration portfolio comprises 11 licenses covering 23 blocks and part-blocks, with potential resources of 88 bcf net to Wham.
The directors' strategy has been to acquire acreage mainly via the UK's "promote" initiative. This provides reduced upfront costs for smaller companies to help them develop prospects before promoting them to potential partners for drilling. Two of its successes in this regard are the Prometheus and Morpheus prospects, but the board were unwilling to risk the company's financial base on one or two wells.
Prometheus, in fact, was drilled, but the result was a dry hole. Although Wham bore none of the capital costs, its share prices suffered. Venture has a much bigger capital base, and expects to drill other Wham-identified prospects more quickly. The acreage lies close to Venture's gas production infrastructure in this area, which should assist development of any commercial discoveries.