SHARES in Bowleven fell 20% after the oil and gas firm said it is raising another £13 million from investors but a decision about whether to proceed with its key project off Africa has been delayed.
The Edinburgh-based company is raising the money at 45p per share eight years after it tapped shareholders for £55m at 650p per share.
Bowleven now expects to make a final decision by mid 2014 on whether to sanction the huge investment required to bring the Etinde asset off Cameroon into production, rather than by the end of this year.
Directors said a further delay to the decision may have implications for the Group's status as a going concern.
Bowleven said the auditor's report in the 2013 annual financial statements includes an emphasis of matter statement about the going concern issue. The statements will be published on November 26.
It added: "The Board believe that additional funds can be raised from any one of a number of sources but notes that as this has not been secured at the date of this report it creates a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern."
Chief executive Kevin Hart emphasised Bowleven still aims to deliver first gas from Etinde in the second half of 2016.
He said the delay in decision-making was caused by issues outside its control.
Bowleven said the funds raised yesterday would give the company valuable flexibility.
The placing was backed by Scottish oil and gas entrepreneur Ian Suttie and City institutions.
But the decision to complete a placing sparked criticism among some private investors, whose holdings may be diluted. It was completed at a 15% discount to Tuesday's closing price of 52.75p.
Retail investors were unable to apply for shares.
Some may have acquired holdings when Bowleven raised funds at 650p per share in October 2005, before it suffered drilling disappointments under previous management.
Mr Hart joined Bowleven from Cairn Energy in 2006.
The company has raised around £275m in the last six years in placings completed at up to 327p per share.
Shares closed down 10.5p at a four year low of 42.25p yesterday.
Bowleven said the latest fund-raising was a notable achievement.
"In some ways it's a vote of confidence that we can raise any money in this market," said Mr Hart.
He said the latest offering could not have been opened up to retail investors unless Bowleven had completed a rights issue. Investors could then have subscribed for shares in proportion to their existing holdings.
Rights issues can be time-consuming and costly.
Mr Hart said the company had raised the minimum amount of new equity possible.
He added: "If they (retail investors) really want to participate they can buy shares in the market at the current price,"
Mr Hart said he could not participate in the placing. He bought 100,000 shares in the market yesterday at 45p.
He said: "I genuinely think that we have made great strides in terms of monetising the value of the assets."
He noted the recent IM-5 well had increased confidence in the size of the Etinde resource base, estimated at 263 million barrels oil equivalent. Bowleven has agreed a memorandum of understanding to supply gas to a fertiliser plant expected to be built in Cameroon.
The company changed the approval timetable for Etinde partly because the parties involved in the fertiliser plant do not expect to make a final decision until next year. Bowleven had expected it to be made this year. The Etinde project is awaiting formal consents from the Cameroon Government.
Bowleven has secured up to $500m development funding for Etinde from the Petrofac oil services firm.
Mr Suttie subscribed for 19,414,103 shares, costing £8.7m in total.
The company said: "The Board recognise a delay to the FID date may have implications on the Group's continued ability to fund its obligations and commitments as they fall due beyond the middle of 2014."
An auditor's emphasis of matter statement highlights important issues without saying the accounts concerned are wrong.
Bowleven cut pre-tax losses to $11.1 m in the year to June, from $13.1m last time.
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