share consolidation

  1. 1,747 Posts.
    This is not good news for the shareholders in the short term.

    Once consolidated the share value will probably halve again.

    Regards M.

    WEST OIL NL 2003-05-26 ASX-SIGNAL-G

    HOMEX - Perth

    Following recent changes to the Board of West Oil the Directors have
    now concluded a review of the Companys exploration assets together
    with its financial position.

    Since it was founded West Oil has had a strategy to provide
    potentially high reward drilling activity for its shareholders.
    Although it has recently diversified geographically into the
    Carnarvon Basin historically, the Companys main exploration focus
    has been the Timor Sea where it has participated in a number of high
    reward wells. Unfortunately, despite the encouraging 9.4 meter oil
    column discovered at Puffin5 in AC/P 22 and a number of successful
    farmouts, the Timor Sea focus has to date failed to prove up
    sufficient oil reserves to commercialise a prospect.

    The Board of West Oil remains committed to the strategy of high
    potential, high reward exploration. However the Board believes it is
    now appropriate to rationalise and reduce the exposure to the Timor
    Sea and consider other opportunities in the oil and gas sector. The
    aim will be to give the Company a broader and more diverse asset base
    and it is intended to look at both Australian and International
    exploration and production opportunities.

    In order to expand the asset base the Company will need to raise
    further capital as it currently has only limited cash reserves. The
    Board is currently considering a number of alternatives to raise
    funds but the existing capital structure with approximately 363
    million shares on issue is restrictive. Hence the Board has decided
    to recommend a 1 for 10 consolidation of capital to shareholders
    thereby reducing the number of shares on issue to 36.3 million. A
    General Meeting of shareholders will be called to consider this
    recommendation. The Board will advise shareholders once a decision
    has been made on an alternative to raise capital.

    An independent corporate advisory firm, Argonaut Capital Limited has
    been mandated to assist in the orderly rationalistion of the Timor
    Sea assets.

    The Board believes that these initiatives will benefit the Company
    and will facilitate the process of restoring shareholder value.

    For more information please contact:
    Mr Mark Pearce, Company Secretary
    Ph: 08 9322 6322 Fax: 08 9322 6558
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