20th Oct 2005 07:01
BowLeven Plc20 October 2005 20 October 2005 BowLeven Plc ('BowLeven' or 'the Company') Preliminary results for the year to 30 June 2005 BowLeven, the Cameroon-focused oil & gas company listed on AIM, today announcesits preliminary results for the year ended 30 June 2005. Highlights of the year include: • Placing and admission to AIM, raising £32m (before expenses) at apre-IPO and IPO placing; • High quality seismic over block MLHP-7 has been acquired, processedand interpreted; • A two well drilling programme has begun; • Discussions with the Cameroon authorities, on economic and fiscalterms for oil and gas developments in the Etinde Permit, have commenced; • Funding, for an ongoing drilling programme in 2006 and new 3D seismicover blocks MLHP-5 and 6, has been secured by a £55m institutional placing; and • The boards of BowLeven and EurOil have been strengthened. Commenting, Terry Heneaghan, Executive Chairman, said: "This has been a significant year for BowLeven, securing funding for our workprogramme over the next two years, and the commencement of a drilling programme.Although, yesterday, we announced that we had not found any oil at theManyikebi-1 well (a Biafra sands oil prospect), we are very encouraged that thewell found gas as expected, and that the quality of the reservoir sands isgood." "We are using the funds raised to explore and appraise our assets and acquire 3Dseismic over blocks MLHP - 5 and 6. The drilling programme is proceeding asplanned and the Isongo Sands show considerable potential for gas and condensate." For further information contact: Terry Heneaghan, Executive Chairman, BowLeven Plc 0131 260 5100Adam Westcott, Noble & Company Limited 0131 225 9677Neil Bennett, Maitland 020 7379 5151 Chairman's Statement 20th October 2005 It is now just over ten months since BowLeven was admitted to AIM. Since then,substantial progress has been made: - high quality 3D seismic over block MLHP-7 has been acquired, processedand interpreted, - a two well drilling programme has begun; - discussions with the Cameroon authorities, on economic and fiscalterms for oil and gas developments in the Etinde Permit, have started; - funding, for an ongoing drilling programme in 2006 and new 3D seismicover blocks MLHP-5 and 6, has been secured by a £55 million institutional equityplacing, and - the boards of BowLeven and EurOil have been strengthened. 3D Seismic The January 2005 acquisition of 3Dseismic over 575 sq.km. in block MLHP-7, hasproved to be an excellent investment. The seismic data has revealed that theknown Isongo gas/condensate discoveries, which were drilled by previousoperators many years ago, were located on the flanks of three large channel sandsystems that congregate in a "hydrocarbon depocentre" in the southern portion ofthis block. These three channels cover around two thirds of the areal extent ofthe block and the prospects in this area, for exploration and appraisaldrilling, are exciting. Drilling A jack-up drilling rig (Adriatic IX) was secured from GlobalSantaFe to drill twohigh impact exploration wells in block MLHP-7. Drilling started on 10th October 2005 and the first exploration well(Manyikebi-1), a multi reservoir Biafra sands oil target, was drilled to totaldepth. The well encountered high quality reservoir sands, discovered gas but didnot find oil. The well will be plugged and abandoned as a small gas discovery;recoverable volumes have yet to be determined. We are obviously disappointedwith this result, which is a setback for our technical analysis of the Biafrasands, but the basic depositional model is confirmed. The results of Manyikebi-1 have no impact on the Group's previously statedrecoverable hydrocarbon volumes and the technical interpretation of the Isongosands is unaffected. Our asset base in Cameroon has considerable exploration anddevelopment potential. The second well, Bachuo-1, which will immediately follow on from the initialwell, is a gas/condensate exploration target in the Upper Isongo sands, withinthe hydrocarbon depocentre in the southern part of this block. The result ofthis well will be announced as soon as possible after technical assessment hasbeen concluded. Fiscal and Economic Terms Discussions have begun with the Cameroon authorities in regard to new fiscal andeconomic terms applicable to oil and gas developments in the Etinde Permit.These discussions are ongoing and we will report any significant developments toshareholders in due course. Farm-In Strategy Your directors recognise the likely advantages of securing an oil and gas jointventure partner in order to further de-risk the technical and financial exposureto the business. Our criteria for partners are: - we will retain Operatorship of our assets,and our selected partner will ideally have: - West African Experience, - a fast track development record, - gas as well as oil experience, and - access to other licence areas in Africa.Our objectives are to:- reduce risk,- obtain additional technical capability- provide funds for future developments, and- reduce future cash requirements from shareholders. Should we decide to form a joint venture partnership, we would aim to conclude adeal during summer 2006. Additional Equity Funding On 18th October 2005, BowLeven issued 8.5 million new ordinary 10p shares, byway of a private placing to certain financial institutions, at a price of £6.50per share, to raise new equity funds of £55.25 million before expenses. The netproceeds of £53.09 million will be used to fund a planned 2006-2007 exploration,appraisal and development drilling programme, 3D seismic acquisition over BlocksMLHP-5 and 6 and provide additional working capital. Board Changes With immediate effect, Don Vandergrift (Group Operations Director and CEO ofEurOil) is retiring from the boards of Bowleven Plc and all of its subsidiaries.For a period of twelve months, Don will act as a consultant to the BowLevenGroup, in order to ensure a smooth handover of his responsibilities to our newTechnical Director, John Morrow, and other executive directors. On behalf of theshareholders and the other directors, I thank him for his tremendous services tothe BowLeven Group over the past several years, often in a very difficult andprecarious business environment. We wish him well for the future. Dr Easton Wren has indicated his willingness to retire from the board onceanother non-executive director has been recruited to replace him. The operations function is now within the responsibility of John Morrow. John,age 51 and formerly Project Director (Middle East), BG Group, joined BowLevenPlc on 7th September 2005 and is appointed to the board as Technical Directorof the BowLeven Group with immediate effect. Philip Rhind, Group CEO, takes overthe position of CEO of EurOil. The board of BowLeven Plc has been strengthened by the appointment of twonon-executive directors. Mr Robert Walvis is appointed with immediate effect to the board as SeniorNon-Executive Director and Deputy Chairman. Robert, age 58, spent his entirefull-time business career from 1971 until 2001 with Royal Dutch Shell. When heretired from Shell International Limited, he was Director and Chairman of theGlobal Corporate Centre with responsibility for worldwide planning, external andenvironmental affairs. Robert will be appointed chairman of the Audit,Remuneration and Nomination committees. With immediate effect, Mr Steve Lowden is appointed to the board of BowLeven plcas a non-executive director. Steve, age 47, has had over 24 years experience inthe international oil and gas business, mainly with Premier Oil and Marathon OilCorporation. When he resigned from Marathon in June 2005, Steve was Senior VicePresident for Business Development and Integrated Gas. I am delighted that we have been able to recruit people of such high calibre andwide ranging experience. In July 2006 I will be 60 years old. It has always been my plan to retire fromfull-time executive life at that age and I will retire as Executive Chairmansometime during the next twelve months. When I retire, Robert Walvis will takeon the role of Chairman (Non-Executive). We are actively looking to recruit an Exploration Director with a proven trackrecord of finding hydrocarbons and we are also seeking a non-executive directorwith a City/financial background. Financial Results The Group reported a loss of £2.1 million for the twelve months ended 30th June2005. The main reasons for the loss are, interest payable of £1.3 million(relating to the premium payable on the redemption and conversion of certainloans during the financial year) and an increase in administrative expenses to£1.4 million, reflecting the necessary increase in the scale of the Group'soperations in order to properly manage and develop its asset base. The balance sheet is healthy and the post-balance sheet event of theinstitutional equity placing has considerably strengthened our financialresources and significantly de-risked the business going forward. Summary BowLeven has an attractive asset base in Cameroon with considerable explorationand development potential. Our business plan to optimise shareholder value remains unchanged and it ismanagement's mission to drive this company forward with drill-bit success. We are now well funded and our plan to form a strategic alliance with a qualityindustry partner will provide additional financial and corporate strength. The quality of the experienced professionals that we have managed to attractonto this board is a tribute to the potential of our asset base and our businessambitions. The Company is moving forward. Terry HeneaghanExecutive Chairman GROUP PROFIT AND LOSS ACCOUNTfor the year ended 30 June 2005 2005 2004 Notes £'000 £'000 TURNOVER - - Distribution costs - - Administrative expenses (1,373) (590) ------- -------OPERATING LOSS (1,373) (590) Interest receivable and similar income 512 7Interest payable and similar charges 1 (1,271) (2,184) ------- -------LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,132) (2,767) Tax on loss on ordinary activities - - ------- ------- LOSS FOR THE FINANCIAL YEAR (2,132) (2,767) ======= ======= Basic and diluted Earnings Per Share (£/share) 2 (0.13) (0.27) The operating loss for the year arises from the group's continuing operations. GROUP BALANCE SHEET30 June 2005 2005 2004 £'000 £'000 FIXED ASSETSIntangible assets 11,289 7,447Tangible assets 336 - ------- ------- 11,625 7,447 CURRENT ASSETSStocks 853 238Debtors 527 69Cash at bank 20,518 162 ------- ------- 21,898 469CREDITORSAmounts falling due within one year (844) (7,755) ------- -------NET CURRENT ASSETS/(LIABILITIES) 21,054 (7,286) ------- -------TOTAL ASSETS LESS CURRENT LIABILITIES 32,679 161 ======= ======= CAPITAL AND RESERVESCalled up equity share capital 2,111 1,030Share premium account 33,758 189Other reserves 2,883 2,883Profit and loss account (6,073) (3,941) ------- -------SHAREHOLDERS' FUNDS 32,679 161 ======= ======= GROUP CASH FLOW STATEMENTfor the year ended 30 June 2005 2005 2004 £'000 £'000 Net cash flow from operating activities (2,905) (178) Returns on investments and servicing of finance (759) (5) Capital expenditure and financial investment (5,686) (2,166) ------- -------CASH OUTFLOW BEFORE FINANCING (9,350) (2,349) Financing 29,706 2,497 ------- -------INCREASE IN CASH IN THE PERIOD 20,356 148 ======= ======= RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 2005 2004 £'000 £'000 Increase in cash in the period 20,356 148 Net cash inflow/(outflow) from loan instruments 4,945 (2,347)Net non cash movement in loan instruments - (2,122) ------- -------CHANGE IN NET DEBT 25,300 (4,321) NET DEBT AT 1 JULY 2004 (4,782) (461) ------- -------NET FUNDS AT 30 JUNE 2005 20,518 (4,782) ======= ======= NOTES FORMING PART OF THE FULL YEAR RESULTS BASIS OF ACCOUNTING The financial statements have been prepared under the historical costconvention, in accordance with the Statement of Recommended Practice forAccounting for Oil and Gas Exploration, Development, Production andDecommissioning Activities and with applicable accounting standards. 1 INTEREST PAYABLE AND SIMILAR CHARGES 2005 2004 £'000 £'000Debenture loan redemption premiums 411 456Redemption premium on other loans 860 1,728 ------- ------- 1,271 2,184 ======= =======The redemption premiums were converted into ordinary 10p shares of BowLeven PLC. 2 BASIC AND DILUTED EARNINGS PER SHARE 2005 2004 £ £Basic and diluted EPS - Ordinary shares of £0.10 each (0.13) (0.27) ========== ==========Basic and diluted calculation based on:Loss for the financial year 2,132,145 2,767,227 ========== ==========Weighted average number of ordinary shares in the period 16,788,012 10,248,321 ========== ========== Basic and diluted loss per share are identical as there is no dilution 3 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2005 2004 £'000 £'000Loss for the financial year (2,132) (2,767)New equity share capital subscribed 1,081 12Premium on new share capital subscribed 33,569 188 ------- ------- 34,650 200 ------- -------Net increase/(reduction) in funds 32,518 (2,567)Opening shareholders' equity funds 161 2,728 ------- -------Closing shareholders' equity funds 32,679 161 ======= ======= This document provides details of the full year results of BowLeven Plc. Copiesof the Annual Report will be sent to shareholders and can be obtained, free ofcharge, from the Company at 68-70 George Street, Edinburgh, EH2 2LT for a periodof one month. - END - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BLVN.L