Bowleven spreads its bets to Kenya in hunt for oil and gas

Group Business Correspondent

Tuesday 18 September 2012

WEST Africa-focused Bowleven is spreading its bets by joining the hunt for oil and gas on the other side of the continent.

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MARK WILLIAMSON

Edinburgh-based Bowleven has agreed to acquire a 50% stake in a sprawling block in north-west Kenya from privately owned Adamantine Energy, in return for around $10 million (£6.2m) exploration costs.

Chief executive Kevin Hart said Bowleven was delighted to add what he called a significant acreage position in Kenya to its operations in Cameroon, where the company has made discoveries that it hopes to bring into production.

"This new acreage affords the company exposure to an exciting new hydrocarbon province for a minimal capital commitment," said Mr Hart.Bowleven has agreed to farm in to the 14,000 square kilometre square block 11B in north-west Kenya, six months after Tullow highlighted the potential of the under-explored country by making the Ngamia light oil discovery.The find helped encourage increased interest in an area in which exploration activity has been limited because of assumptions the territory is likely to contain gas rather than oil. AIM-listed Bowleven said the acreage it is moving into contains several basins north of the Lokichar basin, in which Tullow made the Ngamia find.It has agreed to fund an initial two-year work programme on the block, which will include an airborne geophysical survey and the acquisition of 2D seismic data. The company, which had $140m cash at the end of August, expects to be able to fund the work from existing resources.Mr Hart said Bowleven had been making good progress in its efforts to establish that the finds it has made offshore Cameroon were commercially viable. Analysts at joint house broker Barclays Capital said Bowleven was funded for a planned four-well drilling campaign, assuming an average well-cost of $40m to £45m. The company has started drilling an appraisal well on block MLHP 7.Bowleven said it was in the advanced stages of negotiating the terms of a 10-year agreement to supply gas to a proposed fertiliser plant in Cameroon."A final investment decision is targeted by the end of 2013 with first oil in 2015, although 2016 appears more likely to us," Barclays Capital told clients.Bowleven is in negotiations to farm out a stake in the Bomono permit onshore in Cameroon.

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Bowleven spreads its bets to Kenya in hunt for oil and gas

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