n the development phase, we envisage an innovative funding arrangement similar to the Petrofac-Bowleven deal on Bowleven’s Etinde field in Cameroon, before the Lukoil/Newage farm-out. PFC agreed to finance all Bowleven’s net development capex, in exchange for a high share (80%) of Bowleven’s cost oil entitlement until 130% of the amount invested has been repaid, then a small proportion (3-10%) of its profit oil entitlement depending on a “money multiple” of c 2.1-2.3x, subject to Petrofac achieving a minimum 20% IRR. On our calculations, this funding structure allowed Bowleven to retain 82-86% of the net project NPV without having to put up any development capital upfront – overall a decent outcome for both Bowleven and its contractor Petrofac.
We highlight that the contractor funding model is probably not yet applicable to Petromanas’s situation. Its Albanian assets are still in the exploration and appraisal phase rather than the post-appraisal pre-FID stage, and are therefore more higher risk from the contractor’s viewpoint.
Blvn is just the biggest disappointment, what more can you say... What I find amazing is how much better we are off than 12 months ago and yet we are moving along in this trough, its been months since we had a good positive day..
I would love 75p now let alone 250p! I recall a conversation with Kerry Crawford n 2011 (these were the days when PR were happy to talk to their shareholders as opposed to referring them to look at their website for info) and she twittered on about more analysis was required on Sapele. I recalled thinking that this "analysis" was taking a really long time. In short, I am guessing that Sapele was too much of an undertaking and perhaps not as commercially viable than first thought. Having spoken to KH at some length this year, I was much encouraged by the Bomono prospects (onshore) and Kenya 11B. BLVN are really keen to get stuck into Kenya. EW is very excited about the acreage we have there - remember he is the one that found the huge find for CNE in their Rajasthan fields. Hart will appreciate the value of a decent find in 2015 - he was the FD that orchestrated the £3 billion dollar flotation of Cairn India following that find. He is now pointing the co's nose in the direction where he thinks he can materially increase SH value and that is why we can look forward to the 4 drills in this respect!
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