LONDON (Alliance News) - Africa-focused oil and gas exploration group Bowleven PLC said Tuesday that it has reached a mutual agreement with FTSE 100-listed Petrofac PLC to terminate its strategic alliance agreement.
The AIM-listed company said that the termination satisfies one of the conditions of the LUKOIL and NewAge farm-out transaction announced June 24, 2014. The termination agreement is subject to completion of the farm-out.
In June Bowleven said it had entered into a conditional sale and purchase agreement to sell an aggregate 50% operated interest in the Etinde Permit, Cameroon to LUKOIL and NewAge for a total cash payment of USD250 million.
The oil and gas exploration and development company said at the time that it would reduce its interest in the Etinde permit from 75% to 25%, providing LUKOIL with a 37.5% interest and NewAge an additional 12.5% stake, bringing its holding to 37.5%.
Under the terms of the strategic alliance arrangement Bowleven said Tuesday that it will pay USD9 million to Petrofac upon completion of the farm-out transaction as full and final settlement, officially terminating the Strategic Alliance Agreement.
"We have worked closely with Petrofac over the last two years and we appreciate their co-operation in reaching a mutually acceptable termination agreement," said Chief Executive of Bowleven Kevin Hart.
The companies agreed the alliance in November 2012, created to support the proposed development of the Etinde Permit, offshore Cameroon.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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Petrofac (PFC)
Bowleven (BLVN)