Bowleven set to sink its windfall into new wells

Bowleven chief executive Kevin Hart. Picture: Phil Wilkinson
Bowleven chief executive Kevin Hart. Picture: Phil Wilkinson
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AFRICA-FOCUSED driller Bowleven yesterday unveiled plans for a new wave of exploration as results showed it has more than £100 million on its balance sheet after selling assets.

The Edinburgh-based company is now concentrating on an onshore licence in Cameroon called Bomono, after recently completing a long process to farm out about two thirds of its interest in the Etinde permit.

The deal is worth about $250m (£170m) to Bowleven, most paid in cash. The group retains a 20 per cent interest in Etinde and will also see the costs of drilling two further appraisal wells covered by its partners.

Bowleven yesterday took a $76m impairment on its remaining stake to reflect lower oil prices, and changes to the plans for the eventual development of Etinde which involve supplying a nearby fertiliser plant.

But chief executive Kevin Hart said he believed that the new appraisal wells, due to be drilled in the next year or so, could add considerably to estimates of reserves.

He told The Scotsman that Bowleven would have liked to keep a greater stake in Etinde, but it was too large a project for a company of its size.

“During the course of the transaction the oil price fell from about $110 a barrel to about $50, and our partners had the opportunity to walk away, but they stayed,” he said.

The firm now has $155m on its balance sheet, and is planning to drill two wells at Bomono this year.

Hart said that being an onshore area close to infrastructure such as roads and refineries, Bomono would be relatively cheap to explore. He added that as an explorer rather than a producer, Bowleven is currently benefiting from the lower oil price, which is driving down costs in the industry.

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