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LONDON (Alliance News) - Bowleven PLC shares rose Tuesday after it said the President of Cameroon's approval for the company's proposed deal to sell a stake in its Etinde project to LUKOIL and NewAge was formalised.
Bowleven shares were up 7.8% on Tuesday morning to 31.25 pence per share.
On June 24, Bowleven said it had reached a deal for LUKOIL to acquire a 30% stake in the Etinde project, and for NewAge to increase its stake from 20% to 30%, in return for a combined total consideration of USD250 million.
Bowleven said Tuesday that the Presidential decree regarding the Etinde transaction has now been gazetted, and said it will receive an initial USD170 million from the two companies within the next 15 business days.
The remaining USD80 million owed to Bowleven will involve the two companies paying up to USD40 million to carry Bowleven on two appraisal wells on the project, USD15 million in cash on completion of appraisal drilling, and USD25 million cash once the final investment decision is made on how to develop Etinde.
Following the deal, Bowleven will hold a 20% stake in the project, and will transfer operator-ship to NewAge. The other company involved in the project is Société Nationale des Hydrocarbures, the national oil and gas company of Cameroon, which will still hold a 20% stake.
"The completion of the Etinde farm-out places us in a strong position to exploit further our existing asset base. The resulting consideration of cash and carry, together with an expanded and strengthened joint venture, will enable us to progress both the Etinde development and importantly to participate in the near-term appraisal of the exciting Intra Isongo formation," said Chief Executive Kevin Hart.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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