WELL PLEASED: Bowleven says it has made good progress towards starting production at the Etinde project off the coast of Cameroon.
The oil and gas company highlighted a number of develop-ments directors expect will help underpin the viability of the company's plan to bring finds it has made on the Etinde permit onstream.
They expect to be able to decide whether to proceed with the hefty investment required to bring the first finds onstream by the end of 2013.
Announcing that losses before financing costs narrowed to $6.3 million (£4.2m) in the six months to December from $8.5m in the same period in the preceding year, Bowleven noted it had agreed terms for the sale of gas from Etinde to a fertiliser plant in Cameroon.
Subject to signing of the agreement, the plant looks set to provide an important customer in an area where demand for gas is limited.
The success of the recent appraisal and development well on the IM-5 discovery indicated the area concerned may hold much more oil and gas than previously thought.
Chief executive Kevin Hart told The Herald the well produced the best results of any in his years at the company, which he joined in 2006.
Meanwhile, Bowleven secured up to $500m funding from Petrofac, which will effectively cover its share of the cost of installing production infrastructure for phase one of Etinde. The oil services giant will receive a share of the project cash flows.
Bowleven said: "A detailed project execution schedule has been prepared with the final investment decision and first production from Stage I, targeted for H2 2013 and 2016 respectively."
Mr Hart said the company was confident of making further finds on its acreage on and offshore Cameroon.
He said: "We remain convinced Bowleven is ideally positioned to become a major contributor to Cameroon's hydrocarbon production for years to come and we have the funding flexibility to deliver this potential."
The company is also looking for opportunities to move into other areas of Africa, where there has been limited exploration activity. It will focus onshore.
Bowleven is preparing to start survey work onshore in Kenya, where it recently acquired acreage. Mr Hart said it might drill a well in the country in 2014, depending on the results of survey work.
At December 31, 2012, Bowleven had $90m of cash and no debt.
Bowleven has enjoyed a dramatic improvement in its fortunes since December 2008, when an analyst said the company faced such a big funding challenge it was effectively "dead in the water".
However, Mr Hart said he was disappointed by the company's share price performance. With shares trading at around 100p, the company has a market capitalisation of £300m.
In the past five years Bowleven has raised £262m, in placings completed at up to 327p per share.
In October 2005 it raised £55m at 650p per share, before suffering drilling disappointments under previous management.
Noting the share price has increased around 40% this year, Mr Hart said: "We are starting to see some of the believers coming back on board."
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