White Nile raises £12 mln to test Sudan
Dec 1, 2006 (LONDON) — White Nile, the Aim-listed oil explorer , has raised £12m to finance an appraisal drilling programme in Sudan, in spite of a dispute over the area with Total of France.
The Guernsey-registered company, which is run by Phil Edmonds, the former cricketer, and business partner Andrew Groves, raised the funds from a mix of new and existing institutional investors via a placement at 100p per share, a 12.5 per cent discount to the previous closing price.
The willingness of investors to help finance the initial drilling programme in a disputed licence area, known as Block Ba in oil-rich southern Sudan, suggests they believe Total has little hope of ousting White Nile.
The positive sentiment was echoed in the market as the shares edged up ¾p at 115p.
"We firmly believe we have got the rights," Mr Groves, White Nile’s chief executive, said. He added that the company had won an appeal against an earlier High Court ruling in favour of Total, which had ordered White Nile to hand over documents regarding its licence. Total has appealed that decision and a ruling is expected in February.
The French oil company claims it still has rights over the block, citing an agreement with the government in Khartoum in the north. Total looked for oil there in the early 1980s but pulled out in 1985 after the outbreak of civil war.
White Nile was granted the rights by Sudan People’s Liberation Army two years ago. The SPLA then set up an semi-autonomous government in the south following a peace accord with Khartoum in early 2005.
The explorer is in effect an extension of the SPLA-backed regime, which controls 46 per cent of White Nile through a vehicle called Nile Petroleum, which did not take part in yesterday’s fund-raising.
The new funds will be used to drill three prospects, starting in early 2007 in the Mugland basin where the White Nile flows north. The programme coincides with the start of the dry season, which runs from December to July, when the river is not in flood.
The rig is coming from neighbouring Uganda and it is expected to take one month to drill each well.
Investors also took heart from the announcement that the company is extending its seismic survey to the east of the licence area to target Melut Basin, another oil-producing area.
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