BowLeven Announces Farm out of gabon onshore interest to addax petroleum

BowLeven Announces Farm-out of Gabon Onshore Interest to Addax Petroleum

BowLeven 04-11-2007

BowLeven has announced that its wholly-owned subsidiary GGPC Gabon (Epaemeno) Ltd has entered into an agreement with Addax Petroleum Epaemeno Ltd, a wholly owned subsidiary of Addax Petroleum Corporation, to farm-out half of its existing 100% interest in the Production Sharing Contract (PSC) covering the 1,340 km2 Epaemeno Block located onshore Gabon. Under the terms of the PSC, the assignment requires the consent of the Government of Gabon.

In return for being assigned a 50% interest, Addax Petroleum has committed to spend the first $20 million of gross exploration costs on the block, equivalent to a $10 million carry for BowLeven. In addition, in the event of a commercial discovery, Addax Petroleum has committed to spend the first $16 million of development costs, equivalent to an $8 million carry for BowLeven.

It is intended that Addax Petroleum will become operator of the PSC and that BowLeven will provide technical support under a Technical Service Agreement (TSA). Under the TSA BowLeven will retain the role of carrying out seismic interpretation and will be responsible for proposing the location of exploration drilling to the joint venture.

Work is currently being undertaken to reprocess and re-interpret an old 2D seismic dataset, which exists over the Epaemeno contract area. Based on the outcome of this work BowLeven and Addax will decide whether it is necessary to acquire further seismic prior to proceeding with exploration drilling.

Addax Petroleum has interests in two adjoining blocks directly to the South of the Epaemeno contract area. Both of these blocks contain existing discoveries.

BowLeven is an African oil and gas group, based in Edinburgh and traded on AIM since December 2004 and holds, through its wholly-owned subsidiary EurOil Limited, a 100% equity interest in the Etinde Permit area being three shallow water blocks in offshore Cameroon, West Africa; namely Blocks MHLP 5, MHLP 6 and MHLP 7.

BowLeven also holds, following the completion of this transaction, through its wholly-owned subsidiary FirstAfrica Oil, a 100% equity interest in the EOV offshore block in Gabon, which contains an existing oil discovery that it is seeking to develop, and a 50% equity interest in the Epaemeno Block which is 1,340 km2 of exploration acreage in onshore Gabon which sits next to a number of recent discoveries in surrounding blocks.