Bowleven has announced that the Presidential decree regarding the Etinde transaction has now been gazetted. This has satisfied the final outstanding condition of the farm-out process with LUKOIL and NewAge.
The transaction is now scheduled to complete within 15 business days, at which point the company will receive the initial cash proceeds of approximately $170 million from LUKOIL and NewAge.
The farm-out transaction was announced on June 24, 2014 and comprises the acquisition of a 30% and additional 10% interest in Etinde permit, offshore Cameroon, by LUKOIL and NewAge, respectively, in return for an aggregate consideration of approximately $250 million. The proceeds comprise:
– Approximately $170 million cash at completion (includes $5 million estimated working capital adjustment, subject to finalisation);
– Up to $40 million (net) carry for two Etinde appraisal wells;
– $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.
Bowleven will retain a 20% interest in Etinde and operatorship transfers to NewAge.
Kevin Hart, Chief Executive of Bowleven plc, said:
“The completion of the Etinde farm-out places us in a strong position to exploit further our existing asset base. The resulting consideration of cash and carry, together with an expanded and strengthened joint venture, will enable us to progress both the Etinde development and importantly to participate in the near-term appraisal of the exciting Intra Isongo formation.
“Looking forward, our immediate challenge is to continue to optimise the potential of our Cameroon acreage, with drilling and commercialisation activities on Etinde and, shortly, Bomono. While our strengthened balance sheet is a real advantage through this volatile period for the sector, we remain determined to exercise discipline in the choice and timing of our capital spending.”