The Board also considers it important to present an alternative vision for the Company to that proposed by Crown Ocean and, in doing so, demonstrate the positive case for preserving value for the benefit of all Shareholders.
Vision and Strategy
Bowleven’s original vision remains: to build an African focussed exploration and production company focussed on creating and realising material value through exploration-led organic growth and niche acquisitions.
Read more about our vision and strategy here
A firm financial foundation
Bowleven has a strong balance sheet with approximately US$95 million cash and no debt as at 31 December 2016 or outstanding work programme commitments. In addition, and by virtue of the deferred consideration due to the Company under the Etinde farmout to Lukoil and NewAge, the Company is entitled to a further US$40 million net drilling carry for two appraisal wells on Etinde and a US$25 million cash receipt on Etinde development FID. If for any reason the appraisal wells are not drilled by 2020, the Company is entitled to receive the US$40 million net carry in cash.
A key objective of the Board is to ensure that the Group retains financial flexibility to enable the investment necessary to realise maximum value from its Cameroon assets. The precise funding requirements for Etinde will be shaped by the ultimate development plans. As these plans are still under discussion by the Etinde stakeholders, it is critical that the Group retains adequate financial flexibility for its share of expenditure to avoid compromising its influence and negotiating position.
A Board with decades of industry experience
The current Board has significant experience and an established track record in the upstream oil and gas industry. Each director has many years of management and direct industry experience, ranging from 20 years to over 40 years.
Further details of the background and experience of all of the Directors are available here
A Board and management with extensive experience and strong relationships in Cameroon
The Group has operated in Cameroon for nearly 20 years, with the award of the original Etinde exploration licence to Euroil in 1998. In that time, its management and staff have acquired substantial knowledge and expertise of the legislative, regulatory and operating environment, and established long-standing working relationships with key in-country stakeholders. Given the length and extent of the Group’s involvement in Etinde, Bowleven’s management and technical team are highly familiar with the asset. This, coupled with the extensive industry experience described above, enables active and meaningful participation in, and contribution to, Etinde joint venture discussions with its partners Lukoil and NewAge, in the interests of all Shareholders.
The Group’s asset base and progress towards key deliverables
Etinde (20%; operator NewAge)
The Etinde Permit lies in shallow water adjacent to the Cameroon coast. A number of hydrocarbon discoveries including oil, condensate and gas have been made. The Group’s net P50 contingent resource volumes are 58 mmboe. In addition, considerable exploration/appraisal upside remains throughout the Permit with appraisal drilling of the Intra Isongo reservoir interval targeting un-risked P90 in-place volumes of up to 2 tcf of gas and associated liquids.
Find out more about the Etinde Asset here
Bomono (100% and operator)
The Bomono Permit, frontier acreage located in the onshore extension of the Douala basin, an emerging hydrocarbon province, was acquired by the Group under an exploration PSC in late 2007. Having completed exploration activities on two sites in early 2016 the Group’s focus has most recently been on development and production activity which requires an exploitation authorisiation. In early 2017, formal resolutions for the state’s support for the award of a two-year extension to the exploration phase of the Bomono PSC (to 12 December 2018) and a provisional exploitation authorisation (PEA) were signed. Ministerial approval for the PSC extension has been received and, as stipulated by the Cameroon authorities, the PEA approval process will now follow.
Find out more about the Bomono Asset here
Kenya & Zambia
Against the market backdrop of prolonged low oil prices, the Group carried out a strategic review of its asset base during 2016, in particular the higher risk, early stage exploration acreage in Kenya and Zambia. After consideration, it was decided that against this backdrop neither asset would be further pursued.
Given the absence of exploration within the Group’s current portfolio, the Board intends to continue identifying and evaluating opportunities that have the ability to create material shareholder value through the drill-bit, leveraging on our technical skills whilst ensuring the responsible and prudent use of capital. Oil and gas exploration is, by its nature, high risk-high reward, therefore opportunities screened need to have the potential to move the dial significantly for shareholders, recognising the inherent risks involved with such activities.
The current downturn in the industry has created an opening for debt-free companies with cash, such as Bowleven, seeking new venture opportunities. The active screening of new venture opportunities that have near-term production with upside and infrastructure-led exploration to facilitate monetisation in the event of exploration success is ongoing. During 2016, the Company screened and evaluated over 50 potential asset or corporate transactions and detailed due diligence was undertaken on a number of opportunities. The Company continues to exert rigour in the evaluation of potential transactions to ensure value is created for Shareholders whilst protecting balance sheet strength.