Bowleven strikes again at Cameroon well
Although drilling had to be halted after the well suffered a rapid influx of high pressure gas, the latest news from the company's African exploration was viewed positively by analysts and the market. The company said it will now look to appraise and flow test previously announced discoveries and will also bring in an additional rig from February onwards to drill four wells at the site.
Kevin Hart, chief executive of Bowleven, said the Sapele-1 exploration well had confirmed the presence of oil and gas at multiple levels "further highlighting the significance and potentially transformational nature of this play".
He added the results bode well "for an exciting and successful campaign in 2011".
Analysts at Fox Davies Capital described the news of a deeper discovery as "excellent" although said at this stage it was difficult to place a value on the find.
"The stock, having drifted from its recent highs, is likely to respond well as further details are provided by management. We continue to believe in the upside potential of the off- and onshore Douala Basin and maintain our 'buy' recommendation," it said in a note.
Last month the company said it planned to drill the Sapele-1 well deeper than the 4,539 metres already reached in the hope of finding further oil and gas after earlier making two significant hydrocarbon discoveries. Bowleven has a 75 per cent stake in the well, along with its US-based farm-in partner Vitol. The Cameroon government has the right to take a 20 per cent stake in Bowleven's activity under a production sharing contract. Shares in Bowleven rose by 4.25p to close at 361.25p yesterday.