(Alliance News) - Bowleven PLC on Monday said formal approval to apply for a new Etinde licence exploitation agreement had been granted by the Cameroon government.
Shares in Bowleven were up 27% at 5.16 pence in London just before midday.
Oil and gas exploration firm Bowleven has a 25% non-operated interest in the offshore Cameroon shallow water Etinde permit, formerly known as block MLHP-7. Operator New Age Ltd holds a 37.5% stake and PJSC Lukoil Oil Co the remaining 37.5%.
New Age Ltd now has obtained formal approval to apply for a new Etinde exploitation agreement, replacing the existing agreement which came into force by presidential decree in January 2015.
This agreement was reached after talks with Societe Nationale des Hydrocarbures, which is Cameroon's national oil and gas company and was also the government's representative in talks.
The new agreement would be for hydrocarbon production, including delivering gas to thermal power plants or other projects confirmed by the state.
Bowleven Chief Executive Eli Chahin said: "This is very positive news for the Etinde development, as it essentially eliminates the possibility of the government of Cameroon removing the Etinde licence from the [joint venture] partners, following the end of the initial six year development implementation period in January 2021.
"The JV partners continue to make good progress towards achieving a final investment decision on the licence in 2021 and I look forward to keeping all our stakeholders updated on developments over the coming months."
By Anna Farley; annafarley@alliancenews.com
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Bowleven (BLVN)