BOWLEVEN plans to ramp up its exploration activity in Africa over the coming year following a $250m (£160m) stake sale in Cameroon although the oil and gas firm is still awaiting presidential approval for the deal.
Edinburgh-based Bowleven said it expects to drill four wells in Cameroon, which chief executive Kevin Hart described as potentially significant.
It has not drilled any in 2014 so far.
Announcing annual results, the company said drilling of the first of two exploration wells on its Bomono permit onshore Cameroon is expected to start around the end of the year.
Bowleven expects to participate in two appraisal wells on the Etinde block offshore, which it believes could result in further discoveries in the area.
The costs of the Etinde wells will be carried by Lukoil of Russia and Cameroon's New Age under the farm-out deal agreed in June.
The companies will acquire a total of 50 per cent of Etinde in the $250m deal, leaving Bowleven with 25 per cent.
Bowleven expects to use proceeds of the deal to increase activity in Cameroon and elsewhere.
The company hopes to bring Etinde into production with Lukoil and New Age. It did not give an expected start-up date in its results statement.
In the first half of 2015 Bowleven plans to complete seismic surveys on acreage it acquired recently in Kenya. The company has been awarded blocks in Zambia.
The plans reflect a big improvement in the outlook for Bowleven.
Last November the company noted uncertainties at that time about its ability to continue as a going concern following delays in reaching a decision on whether to sanction the investment required to bring Etinde on stream.
Yesterday, Mr Hart said Bowleven will have a strong balance sheet following completion of the Etinde farm-out.
While the Cameroon government has approved the deal, Bowleven can not complete the farm out without an official decree from Cameroon's President Biya. It recently extended the long stop deadline for completion of the farm-out a second time, to December 31 from October 31 while it awaited the decree.
Regarding President Biya's sign off, Mr Hart said yesterday: "It very much is a when as opposed to an if."
The company had $14m cash at October 31 and a $30m undrawn credit facility. It lost $13.6m in the year to June and $11.1m in the preceding year. Shares in the Aim-listed company closed down 0.75p at 31.75p, giving it a market capitalisation of about £103m.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article