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Yes the Bioko option would be lower cost and faster since the processing plant that would be used is already there. In terms of project net present values, that makes a big difference, as there is less cash outflow and the cash inflows come sooner. Timing is especially important when a sub-Saharan African energy project could be valued at an annual discount rate in the region of 15%.
Suggest a look at p12 of the Annual Report under the heading "Regulatory Approval" but if Bioko route hopefully comes to pass, everything will be stood on its head.
The first Exploitation licence took 12 months for the application to be sanctioned by SNH.
It is now just over 12 months since the joint partners were invited by SNH to reapply for the Exploitation Licence. Should be hearing something in the not to distant future hopefully.
"Eli Chahin’s share incentives determined back in 2017 kick in at a range of prices between 45p and 80p. He is sticking around - and so are the institutional shareholders, who have not sold"
This made me chuckle. Options at 80p. LMAO
The only reason for ii's not selling is they are so deep, they'd be a riot if they did!
punchily down again this year seems very likely now - 4p ish at start to 2.75p ish with a hand ful of trading days to go - and I must say that this is such a consitent share.. ruff ruff went the bowleven doggy year after year for many years.. but hope springs eternal etc..Happy Christmas to all the long suffering here and very hopefully 2022 wil be better thann 21, 20...for us..
No hard figures were given though estimates will vary anyway depending on which contractors are used, so you could get a range of quotes and indications. But the point is that the original plan is not now the optimal one. The new plan to export via Equatorial Guinea would involve lower costs for at least two reasons. There would be no need to reinject gas that was surplus to domestic demand in Cameroon, and there would be no need to build a brand new processing plant because the existing plant on EG would be used.
Hamz74, many thanks for that AGM report and it was also much appreciated on the ADVFN board where I posted it with an acknowledgement to you.
I wonder if you can recall any discussion at the AGM on development costs. Clearly from the AR, the ball park pre FEED figure given by Chahin, as I recall, on the 2019 AGM Conference Call of $600/700, has gone up substantially, so is that now being put at around $1bn? In comparison, therefore, was any guidance provided on the extent of the saving and what the capex might be should the Bioko alternative become reality?
Many thanks
Very much appreciated Hamz74 ...and extremely well written too imho.
Thanks!
(There's much life in this doggy yet imho.. but high risk binary type bet without a doubt)
This year it was only possible to attend the AGM physically, and I did. Eli Chahin, Nicholas Brough FD, other Bowleven staff, a share registrar, and the two brokers – Arden and Shore Capital – were at the 2021 meeting, at the News Building in London. Thanks to one of the AGM resolutions. next year it will be possible to join the AGM either virtually or physically.
Domestic power generation projects in Cameroon are underway, asking for tenders with several Chinese parties interested, but it takes years to develop them, so exports via Equatorial Guinea are a faster option.
The hope is to get FID in 2022 and the government seems keen. Bowleven do 6 hour zoom calls attended by at least 10 people from SNH in Cameroon and several from New Age tuning in from different locations, as well as Lukoil. It can take a few meetings to agree on things. Most of the discussions continue remotely even if there are travel restrictions.
The main resource, condensate is very light oil, which is reasonably correlated to brent crude oil prices. The last valuation model was based on oil at 65 dollars. It is now higher than that, though part of the increase would be taken up by taxes. The fiscal regime allows for substantial cost recovery and then taxes the profitable revenues.
The valuation model, which is validated by the auditors EY, could be updated in 2022 if the Equatorial Guinea option materialises. Broker research does not currently include the Equatorial Guinea option, which should have lower costs than the previous plan that involved building a processing plant to split up the outputs, and reinjecting methane. The broker research reports should be updated when and if Equatorial Guinea becomes the official choice. Arden publish reports available through Research Tree, which include recommendations and price targets. Shore Capital is the house broker, but they do not publish recommendations or share price targets on Bowleven or any other house stocks as a matter of policy.
Eli Chahin’s share incentives determined back in 2017 kick in at a range of prices between 45p and 80p. He is sticking around - and so are the institutional shareholders, who have not sold