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Shareholders back Bowleven's alliance with Petrofac

SHAREHOLDERS in Bowleven have backed the alliance between the oil and gas firm and oil services giant Petrofac, which will provide funding to help bring its fields in West Africa into production.

Edinburgh-based Bowleven said all votes cast on a resolution to approve the strategic alliance at a general meeting were in favour of the deal. Petrofac has agreed to provide up to $500 million (£311m) funding for Bowleven's plan to bring fields in the Etinde permit offshore Cameroon onstream in return for a share of the cashflow from the development.

Bowleven expects the deal will allow it to raise the bulk of its share of the expected $900m development cost, without having to tap shareholders for funds. Chief executive Kevin Hart told the meeting the banks were unable to offer debt for the project on acceptable terms.

The thinly attended general meeting was held the day after Bowleven announced it had postponed the payout of an incentive plan to directors, including Mr Hart, after poor recent share price performance.

Mr Hart and four colleagues were due to collect a total of 303,000 shares, worth around £210,000 under the 2009 long- term incentive plan (LTIP).

Bowleven said the vesting of the 2009 LTIP awards would be made subject to further conditions, including the company formally deciding to proceed with the proposed initial development of the Etinde permit (FID).

Bowleven is targeting FID in the second half of 2013.

Shares in Bowleven closed down 0.5p at 68p yesterday.

At the start of the performance period, Bowleven's shares were trading at 82.75p each and hit heights of 397p in early 2010.

Shareholders made no comment on the subject of directors' pay at the AGM.

Aim-listed Bowleven was not obliged to hold a vote on its directors remuneration report.

Mr Hart told the meeting: "Clearly the share price has been disappointing but you have to consider that with the fact we have still to drill a dry hole since coming into the organisation [in 2006]."

Noting that fund managers appear to be very risk averse, he added: " It is a tough market out there. It does not feel like it but we are probably in the top 20% in the sector in terms of share price performance."

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