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Wessex Exploration PLC (WSX.LN) shares slumped 14% Thursday after Total S.A. (FP.FR) pulled out of a 10 pence a share offer for the oil company, which Wessex's shareholders had continued to snub.
Wessex's shares had risen by around 30% after the Total offer was confirmed last month. Wessex however, dismissed the GBP71.9 million offer as undervaluing the company, following talks with major shareholders.
The company's key asset is its 1.25% stake in the high-profile and potentially large Zaedyus discovery offshore French Guiana. Total has a 25% stake in the project.
In response to Total dropping the bid, Wessex confirmed that having raised GBP12 million in November, it is fully funded for all current requirements for Zaedyus, including participation in a further appraisal well and at least one additional well.
Drilling is expected to start in mid 2012 to follow up on the oil discovery in late 2011. To undertake these operations Royal Dutch Shell PLC (RDSA.LN), the operator with a 45% stake, has contracted a drilling ship, which is expected to start operations mid-year, subject to government consents.
Other stakeholders in Zaedyus include former operator Tullow Oil PLC (TLW.LN) with a 27.5% stake, Northpet Investments Ltd. with a 2.5% stake and Northern Petroleum PLC (NOP.LN) with a 1.25% stake.
The excitement in Zaedyus centers over its geological similarity to Tullow's large Jubilee field on the other side of the Atlantic in Ghana, West Africa. The Zaedyus discovery, which occurred in the very first exploration well, could open up a new hydrocarbon basin in the region.
At 0925 GMT, Wessex shares were down 1.25 pence, or 14% at 7.75 pence.
-By Iain Packham, Dow Jones Newswires; 44-20-7842-9269; email@example.com