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Bowleven agrees new deadline for Cameroon deal

BOWLEVEN has said the deadline for completion of the $250 million (£150m) Cameroon stake sale it agreed in June has been put back by two months as it awaits official approval for the deal.

The Edinburgh-based oil and gas firm said the long stop date by which all the conditions have to be fulfilled has been moved from Sunday, August 31, to October 31.

The deal that Bowleven has agreed with Russia's LUKOIL and New Age of Cameroon will lapse if it is not completed by the revised deadline unless the parties agree a further extension.

News of the delay comes three weeks after Bowleven said it expected the Government to favour speedy approval of the deal.

Yesterday the Aim-listed company said: "The principal condition still to be met is approval by the Cameroon government of the transfer of the equity interest and operatorship.

"The approval process by the Cameroon authorities has commenced and the longstop extension provides additional time to enable logistical arrangements to be made for this requisite step."

Chief executive Kevin Hart said Bowleven had made significant progress towards completion of the farm-out, concerning the Etinde permit.

Bowleven said all parties to the farm-out had agreed to the extension to the longstop date.

In June Mr Hart said the deal with LUKOIL and New Age provided a valuable endorsement of the company's acreage in Cameroon along with cash it could use to fund activity in the country and exploration in Kenya and Zambia.

Bowleven has faced funding challenges following delays with its plan to start production from Etinde.

On completion of the deal, New Age will increase its holding in Etinde to 37.5 per cent from 25 per cent. Its Camop operation will take over from Bowleven as operator.

LUKOIL will acquire 37.5 per cent. Bowleven's holding in Etinde will fall from 75 per cent to 25 per cent.

Bowleven shareholders approved the deal in July.

That month Bowleven agreed to pay $9m to end a strategic alliance agreement covering Etinde it reached with Petrofac in 2012, to allow the farm-out to proceed.

On August 4 the company announced that Cameroon's President Biya had approved an exploitation authorisation allowing it to bring finds on Etinde into production. It had applied for the exploitation authorisation in January.

Shares in Bowleven closed down 1p at 34p yesterday, giving it a market capitalisation of around £113m.

They closed at 42p the day the farm-out was announced.

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