Bowleven Share Price (BLVN)

After the AGM, we got an RNS/email showing it appears that only about 10 million out of c 300 million shares voted in relation to the AGM resolutions. Out of interest, how many, if any, people here cast their votes? Those unable to attend the AGM can cast their votes electronically, by proxy.

Lukoil logistics

Bowleven think that Lukoil needs to be aligned on the development plan.

Costs

There are currently two directors, two finance staff and someone on the ground in Cameroon, at the Euroil subsidiary.

Overheads (excluding development spending) could be about 1.5 million a year next year, but not all would be a cash outlay. If the directors defer their emoluments, these amounts will be accrued.

The costs of being listed are about 300,000 to 400,000 a year.

Here are some other bits and bobs gleaned from the AGM:

Limited communication

The joint venture between Bowleven, Lukoil and New Age, is technically an “unincorporated JV”. This gives the parties commercial rights, such as pre-emption rights that were not exercised when Perenco bid for New Age’s stake, but does not guarantee communication. Therefore, the discussions between New Age and Perenco have been bilateral, and the directors admit they are confused, baffled and surprised by the delays.

Nonetheless, they are aware that Perenco and New Age agreed to an addendum to the long stop date. Bowleven has had sight of it but cannot share it as it is private.

Recoverable costs

Regarding the difference of opinion over USD 10 million of recoverable costs, there are a few angles. Bowleven’s share of this is only 25% or USD 2.5 million. The money can only be recovered from future cashflows from Etinde In the greater scheme of things, USD 10 million is not that much for a project that could generate over USD 1 billion of cashflows. There has been a 10 year audit trail on costs, which is naturally a big exercise. Bowleven anyway expect this dispute will be resolved.

Other Perenco licenses

One possible source of complication and delays, is that Perenco could be negotiating /renegotiating multiple licenses with some inter-related and overlapping issues. We already know they renewed the Rio del Rey license earlier this year.

Possible sale of Bowleven Etinde stake

If this ever happened, the SNH approval process should be less complicated, because Bowleven is a financial investor and not an operator.

Geopolitics and costs of capital

The Chad pipeline dispute, and change of regime in Gabon, could raise fears of contagion risk, increasing the country risk profile. Equatorial Guinea however looks relatively stable.

Geopolitics might increase costs of capital but the auditors agreed to a 15% figure in line with previous years.

Perenco in West Africa

Perenco is the largest player in Cameroon, and is also active in Ghana, as well as Gabon.

Capital raise

Bowleven would prefer to see the share price rebound to minimise dilution. The aim is to offer it to existing shareholders, but they could also be open to new shareholders. Some form of hybrid structure could be considered, though a pure loan would be unlikely. Any offer probably needs to be fully underwritten to take out the execution risk.

They cannot disclose details of the Crown Ocean proposal, such as the share price, because it is private, and is anyway an ongoing discussion.

Domestic Gas

This could be important as part of the ESG agenda, in terms of obligations to the host government.

Development Finance Institutions

If the project gets to development plan and FDI stage, it is possible that development banks and other multilateral agencies might provide some financing. Bowleven has had discussion with banks in African and France

Many thanks for taking the trouble Hamz74 look forward to your notes of the meeting

Yes very helpful of Hamz.