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Delays to Bowleven's plans for West Africa

BOWLEVEN has revealed it is facing further delays with its plan to start producing oil and gas in West Africa but chief executive Kevin Hart insisted it would come good and defended the management's record.

MAKING PROGRESS: Bowleven chief executive Kevin Hart said management at the firm were doing their best.
MAKING PROGRESS: Bowleven chief executive Kevin Hart said management at the firm were doing their best.

"I think we're trying our damndest. Whether it's good enough is a different matter, but it's certainly the best we can do," said Mr Hart.

He was speaking after Edinburgh-based Bowleven said it was now more likely to make a decision about whether to sanction the huge investment required to develop finds off Cameroon around the end of this year, rather than by the summer.

In November, Bowleven had put the expected date of the decision back to mid-2014, rather than the end of last year.

The expected start of commercial production has shifted to 2017 from 2016.

Announcing it made a $6.6 million (£4m) first-half loss, Bowleven said there remains material uncertainty about its funding position. It said this may cast significant doubt about the Group's ability to continue as a going concern.

But Mr Hart insisted Bowleven had made good progress in the six months to December in terms of finding a market for the gas it expects to produce and related engineering work.

He said: "Having seen the prime minister and the finance minister, the minister of mines recently, it is a common conversation that this project has got the personal backing of the presidency and the president (Paul Biya) wants it to happen as quickly as possible."

Aim-listed Bowleven is awaiting official approval for its plans to develop finds made on the Etinde Permit. It submitted an application in January, which Mr Hart said had been expanded to take account of the possibility of proceeding with a bigger development than originally expected.

The company is still in dispute with Cameroon Offshore Petroleum, which has a 25% stake in the Etinde Permit .

In January, the judge in a High Court action noted privately owned Camop had raised doubts about Bowleven's ability to deliver the Etinde scheme and the best development option.

Mr Hart said a dispute with Camop is subject to an arbitration process that Bowleven is facing with confidence, but declined to elaborate. He said Etinde would make a "hell of a difference" to Cameroon as a nation.

Following criticism of directors at December's general meeting by an investor who said they did not buy enough shares in the £13m placing completed in November, Mr Hart said he had shown commitment.

Yesterday, he said: "At the time (of the AGM) I highlighted the fact that either I'd reinvested my entire pay since I'd joined the organisation or the vast majority of it in buying shares."

Mr Hart joined Bowleven in 2006 from Cairn Energy, which made big finds in India.

He noted that directors had not received share awards that had been due to vest under long-term incentive plans (LTIPs) in 2012.

"We are the only guys in town that have actually deferred the awards of LTIPs that would have vested because we weren't happy with the performance of the share price," said Mr Hart, who said the criteria for this year's LTIP had been tightened.

The November placing was at 45p per share.

Bowleven raised £55m at 650p per share in October 2005 under past management. The company had $38m cash at December 31.

Petrofac has agreed to provide up to $500m development funding for Etinde.

Directors said in November that a further delay to the final investment decision may have implications for the Group's status as a going concern.

Yesterday, Bowleven said: "The Board believe that additional funds can be raised from any one of a number of sources ... but note 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."

Chairman Ronnie Hannah told the AGM directors had all shown their commitment over time.

Bowleven shares closed down 0.5p at 29.25p.

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