Cameroon Drilling Delayed, says Bowleven
A year ago Edinburgh-based Bowleven made headlines when it sold a 40% stake in its Etinde shallow water permit offshore Cameroon – 30% to Russia’s Lukoil and 10% to Jersey-based New Age – for $250mn.
This now leaves it in the enviable position of having over $100mn cash on the balance sheet and no debt. However, as Bowleven also revealed in interim results on March 30, it made a 2H2015 loss from continuing operations of $132mn, 63% more than its 2H2014 loss.
Moreover drilling plans on the 461km2 Etinde licence have slipped. Two appraisal wells had been planned this year. Now Bowleven has said “drilling is now expected in 2017” blaming this on “the continued downturn and the worsening industry economic outlook in Q1 2016 [that] has seen a revision in available joint venture capital.” Tendering is anticipated in 2016 “to exploit the low cost/high rig availability environment.”
The $250m deal in March 2015 is inclusive of an up-to-$40mn carry for Bowleven’s now 20% share of drilling costs.
Talks are ongoing with partners and the government about the potential advancement of an initial development of the existing discovered but unrisked 1- to 2-trillion ft3 Etinde resources, said Bowleven. It says these are enough to support a standalone fertiliser, power, or barge-mounted LNG project. Privately-held New Age (African Global Energy) is now operator of Etinde with 30%, while Cameroon’s state SNH retains 20%.
Onshore Cameroon, Bowleven has applied to develop two gas wells on its 100%, 2,328km2 Bomono licence, says it has held talks on possible sale of the gas to state utility Eneo, and notes that the gas could be used in a small power plant.
In contrast Bowleven said its onshore exploration interests in Kenya and Zambia are no longer core to the business, and that it is exiting Zambia.
Mark Smedley