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Wednesday, March 18, 2015
Bowleven has completed the farm-out transaction for the Etinde Permit in Cameroon. Under the deal Lukoil and NewAge will join Bowleven on the acreage with a 30% and 10% stake respectively for a total consideration of roughly $250 million.
The company also confirmed receipt of the initial $165 million cash proceeds of the deal, excluding an estimated $5 million working capital adjustment.
In addition to the $165 million initial cash proceeds Bowleven will receive 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.
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 finalization. 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.”
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