Bowleven completes Etinde farm-out, planning for appraisal wells underway

AIM-listed oil and gas explorer Bowleven has completed the farm-out of its Etinde permit in Cameroon for an initial $165m cash.

The operatorship of Etinde has transferred to Africa-focused NewAge, which has bought a 10% stake in the project, with Russia's Lukoil buying 30% and Bowleven retaining a 20% non-operated interest.

In return, Bowleven will receive a total consideration of up to roughly $250m in staged payments, with an estimated $5m cash to follow the initial payment to cover working capital, with up to $40m net carry for two Etinde appraisal wells, including testing.

Then, on completion of appraisal drilling, the company will get another $15m cash, with a final $25m contingent on the final investment decision.

Bowleven chief executive Kevin Hart said the cash and carry, together with the "expanded and strengthened" joint venture, will enable the progression of appraisal and development activities on Etinde.

He added: "Against a challenging market backdrop our strengthened balance sheet following the transaction puts us in a strong position."

Hart said, with a carry in place to cover the company's share of drilling, planning for the appraisal drilling on the Intra Isongo was now already underway with locations for the two wells nearing finalisation.

Shares in Bowleven were up 8.4% to 33.88p at 10:30 on Tuesday.