4th Aug 2014 13:19
(An item published at 0914 BST did not show the other conditions necessary to complete a deal reducing the company's interest at its Etinde licence. The correct version follows.)
LONDON (Alliance News) - Bowleven PLC Monday said the formal decree awarding its Etinde exploitation authorisation has been signed by the president of Cameroon, ending the award process.
The Africa-focused oil and gas exploration company received formal support for the application in June following a meeting held between the Cameroon government and parties involved in the development of the Etinde shallow-water permit off the coast of Cameroon.
The exploitation authorisation defines the means of monetising the Etinde hydrocarbons by supplying treated gas to a government-sponsored fertiliser plant and also through a liquefied natural gas scheme.
On Monday, Bowleven said the formal decree gives it development and exploitation rights over block MLHP-7 for an initial period of 20 years with the option to renew for up to a further 10 years.
The company said initial development plans for Etinde are focused on the IM field and initial dry gas sales are envisaged to be to a proposed fertiliser plant enabling liquids production.
In June, Bowleven sold a 50% stake in the Etinde oil and gas permit to Russia's LUKOIL OAO and NewAge Ltd, for a total cash payment of USD250 million.
The deal reduced Bowleven's interest in the Etinde permit from 75% to 25% and made NewAge's subsidiary Camop the operator, allowing Bowleven to focus on its exploration plans in Cameroon, Kenya and Zambia, but the company will retain the 25% interest in Etinde to be exposed to its development.
The company said on Monday that the transaction with LUKOIL and NewAge enables accelerated appraisal drilling, aimed at confirming the additional resources available for the expanding range of gas sales opportunities.
It added that Monday's formal decree satisfies one of the remaining conditions on the LUKOIL and NewAge deal. Approval by the Cameroon government of the transfer of the equity interest and operatorship is the principal condition still to be satisfied.
Bowleven shares were up 1.3% to 38.75 pence on Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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