Bowleven narrows losses as it works towards final investment decision

Africa-focussed oil and gas exploration company Bowleven reported a loss of $1.98m (£1.47m) in its full-year results on Wednesday, narrowing from $2.63m year-on-year.

The AIM-traded firm said it closed the year on 30 June with $4.1m of cash, and a financial investment of $2.5m, giving a total value of funds of $6.6m.

Cash balances as at 30 October, meanwhile, totalled $3m.

Bowleven said there were commercial and regulatory issues through the year which were as-yet resolved, in conjunction with uncertainty regarding an “optimum development concept”.

Resolving those issues to permit a final investment decision to be reached in 2022 would be a challenge for the joint venture partners, the board said, with any delays in reaching final resolutions creating a “high financial risk” for Bowleven.

Looking ahead, the company said its key objective was to deliver on a revised strategy in the 2022 financial year, including working with joint venture partners on commercial and finance matters in respect of the Etinde development options, with the aim of reaching a final investment decision on the project in 2022.

The joint venture partners, meanwhile, were proposing to renew the Etinde exclusive exploitation agreement licence as part of the regulatory process associated with reaching final investment decision in 2022.

Bowleven said the risk of the Etinde licence potentially being removed following its expiry in January was considered low at the current time.

The firm said it would also maintain “disciplined” capital management to secure progress towards final investment decision, while maintaining financial resources, and thereafter exploring funding options regarding development capital.

“We continue to focus on maximising the economic return to our shareholders,” said chief executive officer Eli Chahin.

“Throughout the course of 2021, we have seen global gas prices return to high levels and trend towards higher long term prices.

“With the expected timing of our first gas condensate production, we uphold a strong economic case for our asset with capital returns anticipated by the board to be favourable.”

Chahin said the company’s focus for 2022 was to reach an agreement within the joint venture partnership and its wider stakeholders on the optimum development concept for Etinde, and reach final investment decision during the year.

“The board and the executive team are continually discussing ways to mitigate project and financing risk and will continue to seek ways to deliver significant long-term value to investors whilst securing the sustainability of the company.”

At 1128 GMT, shares in Bowleven were down 30.37% at 2.79p.