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BowLeven Raises £39m to Fund Drilling in Cameroon

04-01-2008

Bowleven, the oil and gas explorer focused on Africa, has raised £39m through a share placing at 327p to fund its ambitions.

The Scottish group, which has recovered steadily from drilling setbacks and a change of chief executive two years ago, has reported a $6.6m (£3.3m) loss for the six months to December 31, down from the previous year's $11.6m, as it moves to dollar reporting.

The shares rose 6p to 338p yesterday, still at around half their debut price on the Alternative Investment Market in late 2004 in a listing which raised £55m.

The company raised a further £67m last year, and yesterday reported it had spent $49m on exploration in the first half, and had a cash balance of $55m which was enough to fund its current commitments.

The placing, however, to existing and new investors equating to around 16% of the shares in issue, would "enable the group to best pursue the significant exploration opportunities in its existing portfolio".

BowLeven said there had been "strong support" from shareholders.

It said recent progress had been encouraging, and following a successful three-well drilling campaign in the key "MLHP Seven" in Cameroon in 2007 it was preparing an exploitation application.

The next well was likely to be drilled in April/May, with further appraisal wells to follow.

Chief executive Kevin Hart said further drilling work could reveal a 50% rise in the field's resource potential of 160 million barrels of oil equivalent.

The field could start pumping oil in 2012, with the cost of developing it likely to reach around $1.2bn, he added, with BowLeven likely to look for a joint venture partner.

BowLeven said gas recycling, which allows the initial stripping out and sale of the condensate with the later production of commercial gas volumes, "could be a feasible option", and there were also options for the sale of gas into Cameroon for power and industrial use.

The company's Etinde permit for MLHP five, six and seven offshore Cameroon was last year extended by 18 months to late next year.

BowLeven, meanwhile, doubled its acreage in Cameroon three months ago when it signed a production-sharing agreement for the onshore Bomono area, which has not been explored since the 1980s.

Its £30m acquisition of FirstAfrica Oil in 2006 brought it acreage in Gabon, where it said a development plan for its Offshore EOV block, where it has a 100% equity interest, would progress this year.