Bowleven, the Africa focused oil and gas exploration group, has announced the completion of the farm-out transaction of the Etinde permit, offshore Cameroon.
The company has confirmed it has received the initial $165 million cash proceeds (excludes estimated $5 million working capital adjustment).
The farm-out transaction comprised the sale of 30% and 10% interests in the Etinde Permit to LUKOIL and NewAge, respectively, in return for a total consideration of approximately $250 million.
In addition to the $165 million initial cash proceeds Bowleven will receive the following:
· An estimated $5 million cash to follow for working capital;
· Up to $40 million (net) carry for two Etinde appraisal wells, including testing;
· $15 million cash to be received on completion of appraisal drilling; and
· $25 million cash contingent upon and to be received at Etinde development project FID.
The operatorship of Etinde has transferred to NewAge with Bowleven retaining a 20% non-operated interest.
The Group will provide an update on Wednesday 25th March 2015 on its activities and future plans as part of its Interim Results for the six months ended 31st December 2014.
Kevin Hart, Chief Executive of Bowleven plc, said: “We are delighted the farm-out transaction to LUKOIL and NewAge has completed. The resulting consideration of cash and carry, together with the expanded and strengthened joint venture, will enable the progression of appraisal and development activities on Etinde. Planning for the appraisal drilling on the Intra Isongo is already underway with locations for the two wells nearing finalisation. With a carry in place to cover our share of drilling and testing we are looking forward to appraising this exciting reservoir interval. Against a challenging market backdrop our strengthened balance sheet following the transaction puts us in a strong position.”