Bowleven shareholders hope for good news next week
Oct 24, 2014 at 2:14 pm in AIM by contrarianuk
Shares in Cameroon focused oil explorer Bowleven rose 12% yesterday as expectations rise that good news will come next week in relation to the company’s farm out with Lukoil and NewAge.
At the end of June 2014 Bowleven announced it was selling an aggregate 50% interest in the Etinde Permit offshore Cameroon with the company receiving $170 million ($161 million net) from the transaction with Lukoil and retaining a 20% interest in the discovery. The company has equity interests in two permits in Cameroon, the offshore shallow water Etinde Permit and the onshore Bomono Permit.
On 26th August, Bowleven announced that an extension to the longstop date had been agreed to the end of October 2014 enable the approval by the Cameroon government of the transfer of the equity interest and operatorship. Clearly we are fast approaching this key date and shareholders are waiting with baited breath for news on the Cameroon government approval and the transfer of money from Lukoil. Once this cash is recieved, together with the $17 million left on the balance sheet, this underpins around 33p of value, close to the current share price with further drilling in 2015 anticipated to add further value assuming things are successful. However, given the recent record of the Cameroon government it would not be a great surprise to see a further delay in the process. It was somewhat reassuring to see Lukoil recently update their website to include the deal (https://lukoil-overseas.com/projects/cameroon/), maybe an omen of good news ahead?
A successful outcome to the deal should give the shares a nice boost, but can Chief Executive Kevin Hart deliver this time? The market will not tolerate too much of a further delay.
Contrarian Investor UK
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