White Nile, the controversial company run by former England Test cricketer Phil Edmonds, has given up its ambition to be an oil company because of the political situation in southern Sudan.
Instead, it plans to move into the African agricultural business, it announced today.
Since listing in 2005, the company has assembled a portfolio of early stage exploration licences in southern Sudan, Ethiopia, Kenya and Nigeria. But it has run into several problems in Sudan over licences there, including a dispute with France's Total. So with Sudan uncertain and the global economy slumping, it has decided to put its money - it has about £5m of cash - elsewhere.
The oil projects are being mothballed until there is more clarity on the situation, said sources close to the company. "They could spend the money on proving up [reserves] but they would then have to invest a lot to get to full production."
Analysts at Fox Davis Capital said:
"This confirms our view the most defensive exploration and production companies are those with material commercial and sub commercial resources and profitable production at current oil prices."
As for the move into agricultural, the White Nile team already have some interests in the area. For example, one of Edmonds' other companies, Camec, has a food processing operation in Mozambique.
It is possible some of the team's other agricultural businesses could now be injected into White Nile, which will change its name to Agriterra.
In the market, the reaction was hardly positive: White Nile's shares are now down 0.73p at 1.9p. At their peak in April 2006 they stood at 180.5p.
