EnCore Oil outlines subsidiary spin-off plans
AIM-listed EnCore Oil () is set to spin off its exploration assets into a separately listed subsidiary, with a fundraising offer to follow, it announced on Monday.
The move will allow EnCore to concentrate on the Catcher and Cladhan prospects - its two main assets in the UK North Sea.
The new company will be called XEO Exploration and is expected to list on AIM towards the end of next month, providing it gets the necessary regulatory approval and completes a successful institutional placing.
It first floated the idea of a subsidiary in March, in a bid to fund its exploration drilling programme and hailed the move as one that would "maximise the potential value of our portfolio and avoid undue further dilution".
EnCore is aiming to transfer the Holylake, Tudor Rose/Buffalo, Spaniards and Merrow prospects to XEO. Among its partners for these prospects are Nautical Petroleum (NPE) and EnQuest (ENQ).
With regards to the impact on investors, EnCore said: "The board did not wish to dilute shareholders' exposure to these assets by an EnCore fundraising for a high-impact exploration programme covering the Exploration Assets with the attendant risks."
On completion, EnCore's current chief financial officer and company secretary, Eugene Whyms, will take up the role of chief executive officer at XEO, with EnCore's chief executive officer, Alan Booth, assuming the additional role of non-executive director on the XEO board.
The news comes hot on the heels of last week's announcement that EnCore had struck oil in the Cladhan field.
