Bowleven shares spike on fresh good news from Cameroon rig

BOWLEVEN, the oil and gas explorer, saw its share price spike a further 6.5 per cent yesterday following another positive update on its current drilling programme offshore Cameroon.

Shares in the firm have almost quadrupled in value in the last 12 months and touched a year high of 357.25p before closing up 20.5p at 338p.

It is the second time this month investors have got excited about Edinburgh-based Bowleven after the firm revealed "better than expected" and possibly even "transformational" finds in its current project exploring the Sapele-1 well.

Yesterday the firm said it had found evidence of hydrocarbons in the "deep omicron" layer. The targets of the Sapele-1 exploration well are a series of five vertically stacked reservoirs. The first target showed limited amounts of gas, but the results from two deeper targets announced earlier on November were "better than expected". This latest announcement said that the firm had discovered a further "net hydrocarbon pay of 6 to 8 metres in high quality reservoir sands" in the third target.

The firm said it will continue to drill down into the fifth Cretaceous level, which is expected to reach target depth in the next 20 to 30 days. Sapele-1 is one well in the firm's block MLHP-5, which is one of three of permits in what is called the Douala basin off Cameroon.

Kevin Hart, chief executive of Bowleven, said that although "further evaluation and appraisal are required", he was optimistic.

"The additional pay encountered in the Miocene section provides further support to our view that the omicron discoveries are potentially transformational," he said.

Peter Hitchens, analyst at Panmure Gordon, said that the find did not change his firm's estimate that the deep omicron target could have 50 million barrels of oil but said that the "downside risks are reduced".

In a note to investors, Richard Griffin of Evolution Securities said that while yesterday's announcement was "not a game changer" for Bowleven, the findings represented an "incremental positive" and "continues to improve the resource base on block MLHP-5 which will be at the forefront of the company's drilling campaign for the next 12 to 18 months".

Evo, however, warned investors that the shares "have been strong recently and we urge some caution ahead of the higher risk prospects to be drilled".