Bowleven Regulatory News (BLVN)

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Bowleven plc

Proposed Underwritten Open Offer to raise c$2m

Proposed Waiver of Rule 9 of the City Code on Takeovers and Mergers

Proposed Capital Reorganisation

Notice of General Meeting

Bowleven ("Bowleven" or the "Company"), the Africa focused oil and gas exploration and production company with key interests in Cameroon, announces a proposed conditional underwritten Open Offer to raise gross proceeds of approximately £1.6 million (c.$2 million). Terms not otherwise defined have the meanings given to them in Appendix IV to this announcement.

 Summary

- Proposed pre-emptive Open Offer to raise gross proceeds of approximately £1.6 million (c.$2 million) through the issue of New Ordinary Shares to Qualifying Shareholders at the Issue Price of 0.1p per New Ordinary Share

- The net proceeds of the Open Offer will be used to meet the Company's working capital and general corporate funding needs, as well as funding a portion of the Company's share of the near term project costs at the Etinde Permit Joint Venture

- Under the Open Offer, all Qualifying Shareholders have an opportunity to subscribe for New Ordinary Shares pro rata to their holding of Existing Ordinary Shares at the Issue Price on the basis of an entitlement to subscribe for:

4.83208580680976 Open Offer Shares for every 1 Existing Ordinary Share held

- In order to provide the Company with fundraising certainty, the Open Offer is being underwritten by the Company's 29.96% Shareholder, Crown Ocean Capital, who has committed to take up its maximum Open Offer Entitlement and to subscribe for all shares not otherwise taken up under the Open Offer. Crown Ocean Capital is not being paid a fee for its underwriting commitment.

Rule 9 Waiver and completion conditions

As a result of its underwriting commitment, Crown Ocean Capital's interest in the Company following the completion of the Open Offer is likely to exceed 30 per cent. of the voting rights of the Company and may exceed 50 per cent. of the voting rights of the Company depending on the take-up of the Open Offer. The Company is subject to the Takeover Code; accordingly a Rule 9 Waiver Resolution will be required to be approved by Independent Shareholders at a General Meeting being convened to approve various Resolutions relating to the proposed Open Offer on 2 April 2024. In the event that the Rule 9 Waiver Resolution is not passed the Open Offer will not proceed.

The completion of the Underwritten Open Offer is also conditional upon, inter alia: (i) admission of the Open Offer Shares to trading on AIM, and (ii) the passing of all other Resolutions being put to the General Meeting, further details of which are contained in the Circular, extracts of which can be found in Appendix I to this announcement.

The 1,562,500,000 Open Offer Shares are expected to be issued and commence trading on AIM, subject to Shareholder approval of the Resolutions, at 8:00 a.m. on or around 5 April 2024. The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with Bowleven's Existing Issued Ordinary Shares, including the right to receive all future dividends and other distributions. The Issue Price represents a discount of approximately 60 per cent. to the closing price of 0.25p per share on 13 March 2024.

Use of proceeds

The net proceeds from the Open Offer (being approximately $1,769,600 (approximately £1,382,500 after costs) will be used to meet the Company's working capital and general corporate funding needs, as well as to fund the Company's share of the near term Etinde Permit project costs. The Company's base case model assumes project expenditure contributions from April 2024, driven by cash calls from the operator in relation to the Etinde Permit, will remain in a range approximately around the level of contributions over the last six months. The budgeted cash outflows assume that the Company's current spend on general and administrative expenses (including salaries) will remain constant, albeit the Company continues to seek areas to reduce costs on an on-going basis. In the event that Bowleven's 25 per cent. share contribution to project expenditure costs remains consistent with the previous 12 months (during which time New Age operated the business on a largely suspended care and maintenance operations basis), it is expected that the Company would have sufficient cash resources to fund its operations until approximately mid-2025 on the basis of the Company's current projected monthly expenditure. The Company expects that project expenditure levels could increase in future to facilitate a realignment of the Joint Venture Partners' development priorities in order to reach FID and there may be a requirement for a further capital raise depending, amongst other things, on what, if any, additional Front End Engineering Development work is required. However, only once New Age has communicated its proposed approach to the development of the Etinde Permit, and after the approval of a future work plan and budget for Etinde, will Bowleven know its estimated project expenditure contributions going forward and therefore how long the net proceeds of the Open Offer will provide funding for the Company. Bowleven expects to have further clarity on these costs as and when the next development steps to progress to FID, and the related resourcing requirements for those steps, have been sufficiently advanced amongst stakeholders over the coming months. As a result of the uncertainty regarding the timing and level of Bowleven's future Etinde project contributions, the period for which the net proceeds of the Open Offer will finance the Company is highly uncertain.

Circular and General Meeting

A Circular and Notice of General Meeting, containing details of the Open Offer and convening a general meeting of shareholders, is expected to be posted to Shareholders later today, and will be available on the Company's website at www.bowleven.com, along with a form of proxy to vote at the General Meeting and (for Qualifying Non-CREST Shareholders) an application form for the Open Offer. Certain other information required by the Takeover Code and in relation to the Resolutions are expected to be available at www.bowleven.com later today. The General Meeting is expected to be held at 10:00 a.m. on 2 April 2024 at The Office Group, Borough Yards, 13 Dirty Lane, London, SE1 9PA.

The completion of the Open Offer is conditional on Shareholders voting in favour of all of the Resolutions at the General Meeting. The Circular will set out, inter alia: the reasons for, and provide further information on, the proposed Open Offer; explain why the Directors consider the Open Offer to be in the best interests of the Company and its Shareholders as a whole; and why the Directors unanimously recommend that Shareholders vote in favour of the Resolutions.

If the Resolutions are not passed by the requisite percentage of members of the Company, the Open Offer will not proceed and the New Ordinary Shares will not be issued. Importantly, in such a circumstance, whilst the Group would be able to continue to trade for a short period, it does not expect to have enough funds to continue to meet its obligations after Q2 2024, and thus its solvency position would be put under significant pressure. In the absence of the Open Offer, the Group would need to re-review its short-term financing arrangements and it cannot guarantee that another financing option will be forthcoming. The Board believes that the Open Offer is in the best long-term interests of the Group and its Shareholders, to assist the Group in funding its operations towards FID.

The Company has received an irrevocable undertaking to vote (or, where applicable, procure voting) in favour of the Resolutions from Eli Chahin, being the only Director who holds Existing Ordinary Shares, in respect of his own legal and/or beneficial holding of Existing Ordinary Shares, totalling 1,141,579 Existing Ordinary Shares (representing approximately 0.35 per cent. of the Existing Issued Share Capital). The Company has also received an irrevocable undertaking to vote (or, where applicable, procure voting) in favour of the Resolutions (other than the Rule 9 Waiver Resolution) from Crown Ocean Capital, in respect of its own legal and/or beneficial holding of Existing Ordinary Shares, totalling 96,885,200 Existing Ordinary Shares (representing approximately 29.96 per cent. of the Existing Issued Share Capital).

Extracts from the Circular are set out in Appendix I to this Announcement, an expected timetable of principal events is set out in Appendix II and the key statistics in connection with the Open Offer are set out in Appendix III. Capitalised terms have the meanings set out in Appendix IV.

The above highlights should be read in conjunction with the full text of the announcement, including the appendices at the end of this announcement, and the Circular which contains full details of the Open Offer and Resolutions.

Eli Chahin, Chief Executive Officer of Bowleven plc, said:

"The Board's continuing efforts are focused on maximising the ability to monetise Etinde, with a view to a development plan being sanctioned in the shortest possible timeframe. Given the current energy price environment and the need for hydrocarbons in Cameroon, the Board maintains this to be the principal source of value creation for shareholders. The Etinde Permit has approximately 244mmboe of contingent resources with significant possible upside and, as previously communicated, the Company has focused on securing funding to meet its corporate and development costs as project activities continue. The proposed Open Offer will allow all qualifying shareholders to participate in the fundraising on a pre-emptive basis, and the proceeds received will provide the Company with near-term funding as we continue to support progress at Etinde towards project sanction and the USD25m payment Bowleven is due at the time of FID. "

ENQUIRIES

For further information, please contact:

Bowleven plc

Eli Chahin, Chief Executive 00 44 203 327 0150

Shore Capital (Nominated Adviser, Financial Adviser & Broker)

Daniel Bush 00 44 207 7408 4090

Rachel Goldstein

Camarco (Financial PR)

Owen Roberts 00 44 203 757 4980

Hugo Liddy

IMPORTANT INFORMATION

This announcement is not intended to, and does not constitute, an offer to sell or the solicitation of an offer to subscribe for or buy, or an invitation to subscribe for or to purchase any securities, or an offer to acquire via tender offer or otherwise any securities, or the solicitation of any vote, in any jurisdiction.

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons into whose possession this announcement comes should inform themselves about and observe any applicable restrictions or requirements. No action has been taken by the Company that would permit possession or distribution of this announcement in any jurisdiction where action for that purpose is required. Any failure to comply with such restrictions or requirements may constitute a violation of the securities laws of any such jurisdiction.

The New Ordinary Shares have not been, nor will they be, registered under the US Securities Act of 1933 (as amended) or under the securities laws of any state of the United States or qualify for distribution under any of the relevant securities laws of USA, Australia, Canada, Japan, the countries of the EEA and the Republic of South Africa. Shareholders outside the UK and any person (including, without limitation, custodians, nominees and trustees) who has a contractual or other legal obligation to forward this announcement to a jurisdiction outside the UK should seek appropriate advice before taking any action.

Shore Capital and Corporate Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as nominated adviser, and Shore Capital Stockbrokers Limited (together with Shore Capital and Corporate Limited, "Shore Capital") is acting exclusively as broker, for the Company and for no one else in relation to the matters described in this announcement and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of Shore Capital, or for providing advice in relation to the contents of this announcement or any matter referred to in it. The responsibilities of Shore Capital as the Company's nominated adviser and broker under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director, Shareholder or any other person, in respect of his decision to acquire shares in the capital of the Company in reliance on any part of this announcement, or otherwise.

No liability is accepted by Shore Capital or by any of their respective affiliates or agents or any of their respective directors, officers, employees, members, agents, advisers, representatives or shareholders nor do they make any representation or warranty, express or implied, in relation to the contents of this announcement, including its accuracy or completeness or for any other written or oral statement made or purported to be made by it, or on its behalf, in connection with the Company and the matters described in this announcement and accordingly Shore Capital disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement or any such statement, to the maximum extent permitted by law and the regulations to which it is subject.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "targets", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Company's and the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Company's prospects, growth and strategy. No statement in this announcement is intended to be a profit forecast and no statement in this document should be interpreted to mean the Company's performance in future would necessarily match or exceed the historical published performance of the Company. By their nature, forward-looking statements involve risks and uncertainties because they relate to future events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, achievements and financial condition may differ materially from those expressed or implied by the forward-looking statements in this document. In addition, even if the Company's results of operations, performance, achievements and financial condition are consistent with the forward-looking statements in this document, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statements that the Company makes in this announcement speak only as of the date of such statement, and none of the Company or the Directors undertake any obligation to update such statements unless required to do so by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

This announcement is directed at, and distributed to, only: (a) persons in member states of the European Economic area who are "qualified investors", as defined in article 2 (e) of the Regulation (EU) 2017/1129 (together with its delegated and implementing regulations) (the "EU Prospectus Regulation"), (b) in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or are high net worth companies, unincorporated associations or partnerships or trustees of high value trusts as described in Article 49(2) of the Order and (ii) are "qualified investors", as defined in Article 2 (e) of the Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended) (the "UK Prospectus Regulation") ("UK Qualified Investors"), and (c) persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No person who is not a Relevant Person should act on or rely on this announcement and any persons distributing this announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this announcement or the Open Offer relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Open Offer set out in this announcement are for information purposes only. This announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by Shore Capital or any other person authorised under FSMA. This announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply. No prospectus or admission document will be made available in connection with the matters contained in this announcement, only the Circular, and no such prospectus is required (in accordance with the UK Prospectus Regulation) to be published.

The Open Offer (subject to certain limited exceptions) is only being extended to Qualifying Shareholders, and as such (subject to certain limited exceptions) is not being extended into the United States or any other Excluded Territory. This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to sell, allot or issue, or any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, or an offer to acquire, any securities of the Company in the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland, the Republic of South Africa or in any other jurisdiction where the extension or availability of the Open Offer would result in a requirement to comply with any governmental or other consent or any registration filing or other formality which the Company regards as unduly onerous or otherwise breach any applicable law or regulation. This announcement and any other document relating to the Open Offer may not be sent into, distributed or otherwise disseminated (including by custodians, nominees or trustees or others that may have a contractual or legal obligation to forward such documents) in the United States by use of the mails or by any means or instrumentality of interstate or foreign commerce (including, without limitation, email, facsimile transmission, the internet or other form of electronic transmission) or any facility of a national securities exchange of the United States.

The Open Offer Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. There will not be any public offering of the Open Offer Shares in the United States.

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto the Open Offer Shares have been subject to a product approval process, which has determined that they each are: (a) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and (b) eligible for distribution through all permitted distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, "distributors" (for the purposes of the UK Product Governance Requirements) should note that: the price of the Open Offer Shares may decline and investors could lose all or part of their investment; the Open Offer Shares offer no guaranteed income and no capital protection; and an investment in the Open Offer Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Open Offer.

For the avoidance of doubt, the Target Market Assessment does not constitute: (i) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A, respectively, of the FCA Handbook Conduct of Business Sourcebook; or (ii) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to, the Open Offer Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Open Offer Shares and determining appropriate distribution channels.

APPENDIX I - EXTRACTS FROM THE CIRCULAR

The following is derived from the Company's Circular containing details of the Open Offer, which is expected to be posted to Shareholders later today and is subject to change.

1 Introduction

On 14 March 2024 Bowleven announced that, in order to provide the Company with additional resources to fund its on-going working capital requirements, it is proposing to raise approximately US$2,000,000 (equivalent to £1,562,500 (before "expenses")) pursuant to an Open Offer. Under the Open Offer, all Qualifying Shareholders have an opportunity to subscribe for New Ordinary Shares at the Issue Price by subscribing for their respective Open Offer Entitlements which have been calculated on a pro rata basis to their holding in the Existing Ordinary Shares in the Company on the Record Date. The Company's largest shareholder, Crown Ocean Capital, has agreed to subscribe for all shares not otherwise taken up under the Open Offer as explained further in paragraph 8 and 10 below.

In order for the Company to lawfully allot the Open Offer Shares, the Company is proposing a subdivision of each Existing Ordinary Share of 10 pence into one New Ordinary Share of 0.1 pence and one Deferred Share of 9.9 pence. It is also proposed that the New Articles be adopted so as to include the rights and restrictions attaching to the Deferred Shares.

The Open Offer is conditional upon, inter alia, (i) the passing of the Resolutions at the General Meeting; and (ii) admission of the Open Offer Shares to trading on AIM becoming effective on or before 08.00a.m. on 5 April 2024 (or such later date and/or time as the Company, Shore Capital and Crown Ocean Capital may decide, being no later than 08.00 a.m. on 19 April 2024).

Mr Eli Chahin has confirmed his intention to apply for his Open Offer Entitlement (the "Directors' Intended Application"). As the Company is currently in a closed period under MAR until the publication of its interim results for the period ended 31 December 2023 (the "Results"), the Directors are not permitted to enter into an Application Form until after publication of the Results (and subject to each not being in possession of any other unpublished price sensitive information at such time). Whilst it is expected that the Results will be published prior to the last date specified for receipt of completed Application Forms, in the event that Mr Chahin is unable to apply prior to that date (for whatever reason) Mr Chahin will be permitted to submit an Application Form after that date and, to the extent Admission has already occurred by that date, the Company will apply for admission of the Director Offer Shares which are the subject of the Directors' Intended Application to trading on AIM separately and to take effect following the admission of the Open Offer Shares.

 Subject to the satisfaction of these conditions, it is expected that Admission will become effective and dealings in the Open Offer Shares will commence on 5 April 2024. The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with the New Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. In the event that Mr Chahin is unable to apply for the Director Offer Shares on account of being in a closed period for the purposes of MAR or otherwise being in possession of inside information or unpublished price sensitive information, Mr Chahin may subscribe for his Open Offer entitlement of Director Offer Shares post the last date specified for receipt of completed Application Forms which may be after the date of Admission, in which case, admission of the Director Offer Shares which are the subject of the Directors' Intended Application may occur separately from the Open Offer Shares.

2 Information on Bowleven plc

In recent Bowleven is an independent AIM quoted oil and gas company headquartered in the UK and focused on Africa, where it holds an exploration and development interest in offshore Cameroon.

Bowleven holds a 25 per cent. strategic equity interest in the offshore shallow water Etinde Permit. Bowleven was formed in 2001 and it was admitted to trading on AIM in December 2004. Bowleven is dedicated to realising material shareholder value from the Etinde Permit in Cameroon, whilst maintaining capital discipline and employing a rigorously selective approach to other value enhancing opportunities.

3 Background to and reasons for the Open Offer

In recent years, the Company has been supporting its Joint Venture Partners to progress the proposed development plan for the Etinde Permit to a final investment decision ("FID"), at which stage the Company will be entitled to receive a milestone payment from its Joint Venture Partners.

In June 2022, the Company's Joint Venture Partner for the Etinde Permit, New Age, agreed to sell its 37.5 per cent. stake and operatorship in the Etinde Permit to Perenco (the "New Age/Perenco Transaction"), conditional upon, inter alia, the parties reaching regulatory agreement with SNH and the Government of Cameroon. Under the terms of the New Age/Perenco Transaction, the completion long stop date was originally 12 months after signature (6 June 2023), although the Company was subsequently advised by New Age, that Perenco had confirmed, despite the passing of the longstop date set out in the 2022 sale and purchase agreement, that it had been continuing to work towards completing the New Age/Perenco Transaction. Notwithstanding this, as announced by the Company on 25 January 2024, New Age confirmed to the JO Partners that Perenco had terminated the New Age/Perenco Transaction.

Whilst the New Age/Perenco Transaction had been awaiting completion, no definitive Etinde Permit work plan or budget was approved by the Joint Venture Partners throughout the period during which the transaction was pending. Monthly expenditure in relation to the Etinde Permit remained low during this period as New Age operated the business on a largely suspended care and maintenance operations basis.

The termination of the New Age/Perenco Transaction was a disappointing development for the Company owing to the delays all stakeholders encountered during this period of ultimately unfruitful inactivity and, now, most importantly, the resulting consequences of the existing Joint Venture Partners having to remobilise efforts and resources to resume the process of building Joint Venture Partner and Governmental consensus towards a plan to take the Etinde project forward. The Company is in discussions with its Joint Venture Partners to determine a new development plan and to assess the efforts now required to secure FID.

The Company's principal expenditures relate to its contribution towards activities at the Etinde Permit, as well as on-going general corporate overheads including employee salaries. The Company does not yet generate any revenues from its operations and for the year ended 30 June 2023, the Company generated a loss of $2.020 million and a decrease in cash and cash equivalents to $906k (2022: $1.273m). As at 29 February 2024 it had cash of $0.37 million. The Company currently expects that, absent the completion of a capital raise, its expenditure will exceed its current liquid funds during the second quarter of 2024. As a result, without a further cash injection very shortly, Bowleven's solvency will be under immediate pressure. The Company is thereafter likely to need further capital to be in a ositionn to fund its obligations and liabilities during the period it will take to reach FID, and the receipt of the $25 million payment due to the Company once FID is reached.

In order to allow the Company to continue to fund its ongoing operations and general corporate overheads, as well as the potential expenditure in connection with the Etinde Permit to be incurred in reaching FID (which the Company now expects to be in 2025 at the earliest), the Board has spent considerable time discussing and evaluating future debt and/or equity fundraising options. It has also taken whatever remaining actions were available to reduce Bowleven's cash burn and preserve its cash resources. The Board believes that there is little further scope to reduce costs, mindful of the resourcing requirements to keep the Company functioning and governed appropriately.

The Company's current annualised monthly expenditure run rate is approximately $150,000 per month, including the annualised monthly contribution costs in relation to the Etinde Permit which are currently approximately $45,000 per month. This level of monthly contribution costs reflects the fact that there has been little development activity in relation to the Etinde Permit during the preceding 12 months. These contribution costs are expected to increase as the Joint Venture Partners seek to mobilise efforts to accelerate development activity at the Etinde Permit following the termination of the New Age/Perenco Transaction and begin to engage stakeholders on the way forward to achieve FID.

As announced previously, the Board had been in discussions with the Company's largest shareholder, Crown Ocean Capital, in relation to the provision of new equity capital and had been considering an indicative proposal which contemplated it providing equity capital at a very substantial discount to the market price of Bowleven's ordinary shares at the time. The Board considered it appropriate to ensure it had explored all available options before pursuing this proposal.

Having sought alternative sources of financing, the Board received one alternative indicative conditional equity investment proposal, which was a staged equity financing arrangement over time, in part conditional on, inter alia, the New Age/Perenco Transaction completing. Following discussions between the counterparty and Crown Ocean Capital, the Company's largest shareholder, Crown Ocean Capital confirmed to the Company that it would not support the proposal. This meant it was not a viable alternative capable of receiving the necessary approval of Shareholders at a general meeting and, as a result, the counterparty confirmed that it would not actively take its indicative equity investment proposal forward at that time given the unlikelihood of securing the necessary approval of Shareholders. The Board believes that the subsequent termination by Perenco of the NewAge/Perenco Transaction has added further risks to the Company's ability to raise the level of capital necessary to alleviate its going concern considerations. As a result, the Directors have determined that Crown Ocean Capital's proposal is the only current financing option available to the Company which they believes is capable of being executed in order to increase the Group's cash position in sufficient time to allow the Company to continue to finance its short-term working capital needs, as well as a level of further project expenditure at the Etinde Permit in the immediate term. Therefore, following further discussions, Crown Ocean Capital has agreed to underwrite the Open Offer to raise $2 million (approximately £1,562,500) at the Issue Price.

4 Use of proceeds

The net proceeds from the Open Offer (being approximately $1,769,600 (£1,382,500) after costs) will be used to meet the Company's working capital and general corporate funding needs, as well as to fund the Company's share of the near-term Etinde Permit project costs. The Company's base case model assumes project expenditure contributions from April 2024 driven by cash calls from the operator in relation to the Etinde Permit will remain in a range approximately around the level for February 2024. The budgeted cash outflows assume that the Company's current spend on general and administrative expenses (including salaries) will remain constant, albeit the Company continues to seek areas to reduce costs on an on-going basis. In the event that Bowleven's 25 per cent. share contribution to Etinde project expenditure costs remains consistent with the previous 12 months (during which time New Age operated the business on a largely suspended care and maintenance operations basis), it is expected that from completion of the Open Offer the Company would have sufficient cash resources to fund its operations until approximately mid-2025 on the basis of the Company's current projected monthly expenditure. The Company expects that Etinde project expenditure levels could increase in future to facilitate a realignment of the Joint Venture Partners' development priorities in order to reach FID and there may be a requirement for a further capital raise depending, amongst other things, on what, if any, additional Front End Engineering Development work is required. However, only once New Age has communicated its proposed approach to the development of the Etinde Permit, and after the approval of a future work plan and budget for Etinde, will Bowleven know its estimated project expenditure contributions going forward and therefore how long the net proceeds of the Open Offer will provide funding for the Company. Bowleven expects to have further clarity on these costs as and when the next development steps to progress to FID, and the related resourcing requirements for those steps, have been sufficiently advanced amongst stakeholders over the coming months.

As a result of the uncertainty regarding the timing and level of Bowleven's future Etinde project contributions, the period for which the net proceeds of the Open Offer will finance the Company is highly uncertain.

5 Current Trading and Outlook

The Company announced its audited annual financial results for the 12 months ended 30 June 2023 ("FY2023") on 10 November 2023. The key features of that announcement were as set out below. Where appropriate, updates are provided below where the position has materially changed since the announcement of 10 November 2023:-

? The loss for FY2023 was $2.020 million compared to $2.484 million for the same period in the prior year. The decreased loss was primarily due to lower recharges from Etinde and a reduced G&A spend.

? Bowleven's monthly expenditure run rate for the FY2023 period has been relatively consistent throughout the period of relative low activity. During the period from August 2023 to January 2024 the total monthly expenditure for the Company was c. $157,000. This comprised Company G&A and Etinde G&A of $105,000 and $52,000 respectively.

? With the exception of the CEO, all remaining employees now work on a part time contractor basis and the office accommodation was vacated during early 2023.

? The Group's FY2023 G&A expense charge was $2.2 million (2022: $2.4 million), which was somewhat lower than the equivalent period in the prior year, reflecting the impact of further cost saving measures during 2023. This includes $0.5 million for the CEO salary (2022: $0.57m) and Etinde G&A costs of $0.53 million charged by New Age. Other material costs included audit fees, regulatory costs associated with the Company's listing, and advisor charges in relation to the anticipated capital raise.

? Bowleven had $0.9m of cash and cash equivalents at 30 June 2023. Since that time, Bowleven's cash reserves have reduced and as at 31 December 2023, Bowleven had approximately $0.55 million of cash and cash equivalents and no debt. As at 29 February 2024, the Company had cash and cash equivalents of $0.37 million and no debt.

? The Directors expect that the Company's cash resources will be extinguished during the second quarter of 2024 if the Open Offer is not successfully completed.

? Under the terms of the Etinde farm-out transaction completed in March 2015, the Group is entitled to a $25 million payment from the JV Partners, which is contingent on the Etinde project achieving FID. This is held as a contingent asset in the Company's accounts pending further clarity around Etinde FID project sanction.

6 Details of the Open Offer

6.1  Structure

Having considered potential debt and equity financing options, the Directors have concluded that an equity financing is the most desirable means of raising finance at present. The Directors have given consideration as to the best way to structure a proposed equity fundraising, taking into account current market conditions, the need for fundraising certainty, the relative transaction costs of different fundraising structures, the composition of the Company's shareholder register and the Board's strong desire to give shareholders the opportunity to participate and avoid or limit dilution where practicable.

The Directors have concluded that the structure of the fundraising by way of an underwritten Open Offer is the most suitable option available to the Company and its Shareholders as a whole. The Open Offer will provide an opportunity for all Qualifying Shareholders to participate in the fundraising by acquiring Open Offer Shares pro rata to their current holdings of Existing Ordinary Shares, whilst also providing the Company with fundraising certainty at no additional cost to the Company, through the Crown Ocean Capital underwriting arrangement. The terms of the Open Offer are conditional on the Resolutions being approved by the Shareholders.

6.2  Principal terms of the Open Offer

Subject to the fulfilment of the conditions set out below and in Part IV of this document, Qualifying Shareholders are being given the opportunity to subscribe for Open Offer Shares at a price of 0.1 pence per Open Offer Share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

4.83208580680976 Open Offer Shares for every 1 Existing Ordinary Share

The Open Offer is being underwritten by Crown Ocean Capital as set out in paragraph 8 below. The issue of the Open Offer Shares will raise gross proceeds of approximately $2,000,000 (£1,562,500) for the Company.

Fractions of Open Offer Shares will not be allotted to Qualifying Shareholders in the Open Offer and entitlements under the Open Offer will be rounded down to the nearest whole number of Open Offer Shares.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.

6.3  CREST

Application will be made for the Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 18 March 2024. Such Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. 18 March 2024. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Qualifying non-CREST Shareholders will have received an Application Form with this document which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements on 18 March 2024.

Shareholders should note that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, they will not be tradable and applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders who do not apply to take up their Open Offer Entitlements will have no rights under the Open Offer and will not receive any proceeds from it. If valid acceptances are not received in respect of all Open Offer Entitlements under the Open Offer, unallocated Open Offer Shares will be subscribed for by Crown Ocean Capital pursuant to the Underwriting Agreement. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part IV of this document.

For Qualifying non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post, using the pre-paid envelope enclosed to Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours only) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS13 8AE so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 2 April 2024. For Qualifying CREST Shareholders, the relevant CREST instructions must have been settled as explained in this document by no later than 11.00 a.m. on 2 April 2024.

6.4  Other information relating to the Open Offer

The Open Offer is conditional upon: (i) the passing without amendment of the Resolutions at the General Meeting; and (ii) admission of the Open Offer Shares to trading on AIM becoming effective on or before 08.00 a.m. on 5 April 2024 (or such later and/or time as the Company, Shore Capital and Crown Ocean Capital may decide, being no later than 5.00 p.m. on 19 April 2024).

Accordingly, if these conditions are not satisfied or waived, the Open Offer will not proceed.

The Open Offer will result in the issue of a total of 1,562,500,000 Open Offer Shares (representing, in aggregate, approximately 82.33 per cent. of the Enlarged Share Capital). The Open Offer Shares, when issued and fully paid, will rank pari passu in all respects with the New Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the Open Offer Shares. No temporary documents of title will be issued.

Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience a dilution of approximately 82.85 per cent. to their voting interests in the Company because of the Open Offer. Application will be made to the London Stock Exchange for the Open Offer Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 5 April 2024 and that dealings for normal settlement in the Open Offer Shares will commence at 8.00 a.m. on 5 April 2024.

Mr Chahin is intending to enter into an Application Form pursuant to the Open Offer when the Company is no longer in a closed period for the purposes of MAR (and subject to Mr Chahin at that time not having any inside information or unpublished price sensitive information).

In the event that Mr Chahin is unable to apply for the Director Offer Shares on account of being in a closed period for the purposes of MAR or otherwise being in possession of inside information or unpublished price sensitive information, Mr Chahin may make an application post the deadline for Open Offer Application Forms, in which case, admission of those Director Offer Shares may occur separately from the Open Offer Shares.

7 The Capital Reorganisation

7.1 Background

As at 6.00 p.m. on 13 March 2024 (being the latest practicable date prior to the publication of this document), the Company had 335,272,933 Existing Ordinary Shares in issue (including Ordinary Shares held in treasury), with an Existing Ordinary Share having a mid-market price at the close of business on such date (as derived from the AIM Appendix of the Daily Official List) of 0.25 pence per Existing Ordinary Share. The Capital Reorganisation is necessary as a company is unable to lawfully issue shares for less than the nominal value of its ordinary shares. Therefore, without the Capital Reorganisation, the Company would not be able issue the Open Offer Shares.

The Board is therefore of the view that the Capital Reorganisation would benefit the Company and its Shareholders as it would reduce the nominal value of Existing Ordinary Shares in issue to enable the Company to issue the Open Offer Shares at the proposed price of 0.1 pence per Open Offer Share.

The Capital Reorganisation will consist of the following steps:

? Shareholder approval of the Capital Reorganisation, including the creation of a new class of Deferred Shares;

? the sub-division of each Existing Ordinary Share of 10 pence into one New Ordinary Share of 0.1 pence and one Deferred Share of 9.9 pence; and

? the adoption of the New Articles, which include the rights and restrictions attaching to the Deferred Shares.

7.2 Constitution of a new class of Deferred Shares

A new class of Deferred Shares will be constituted pursuant to Resolution 2.

The rights attaching to the Deferred Shares, which will be set out in the New Articles, will be minimal and such shares will not carry any voting or dividend rights and will only be entitled to a payment on a return of capital (whether by winding up or otherwise) of a sum equal to the nominal capital paid up or credited as paid up thereon after an amount of £1,000,000 has been paid in respect of each New Ordinary Share (an extremely remote possibility). The Deferred Shares will not be listed or admitted to trading on AIM or any other stock exchange and will not be transferable without the prior written consent of the Company.

The Company shall be entitled to purchase all of the Deferred Shares at any time. The aggregate amount payable to all the holders of the Deferred Shares as a class between them on redemption shall be the amount of £1.00.

The holders of the Deferred Shares shall be deemed to have conferred the irrevocable authority on the Company at any time to: (i) appoint a Director or Directors (or such other person as may be nominated by the Directors), to, inter alia, transfer some or all of the Deferred Shares to such person(s) as the Company may determine (including without limitation the Company itself); and/or (ii) repurchase such Deferred Shares, in either such case for an aggregate consideration of £1.00 for all of the Deferred Shares for the time being in issue without obtaining the further sanction of such holders and upon such terms that any consideration not exceeding £1.00 in respect of any holding of Deferred Shares may be paid to and/or retained for the benefit of the Company.

7.3 The Capital Reorganisation

It is proposed to sub-divide each Existing Ordinary Share of 10 pence into one New Ordinary Share of 0.1 pence in nominal value and one Deferred Share of 9.9 pence in nominal value. Assuming an issued share capital immediately prior to the General Meeting of 335,272,933 Existing Ordinary Shares of 10 pence each in nominal value, this will result, on admission of the New Ordinary Shares to trading on AIM, in 335,272,933 New Ordinary Shares of 0.1 pence each in nominal value and 335,272,933 Deferred Shares of 9.9 pence each in nominal value being in issue immediately following the Capital Reorganisation. The Capital Reorganisation of the issued Existing Ordinary Shares will not, of itself, affect the value of any shareholding, as the number of New Ordinary Shares held by each Shareholder will be equal to the number of Existing Ordinary Shares held by each Shareholder immediately prior to the Capital Reorganisation.

No certificates will be issued in respect of the New Ordinary Shares or the Deferred Shares.

Resolution 2, an ordinary resolution, proposes the sub-division of all of the Company's Existing Ordinary Shares.

7.4 Amendments to the Articles

Following completion of the Capital Reorganisation, the Articles will be amended to include the rights and restrictions attaching to the Deferred Shares. A copy of the New Articles, marked up to show the changes being proposed, will be available on the Company's website at www.bowleven.com and for inspection free of charge during normal business hours on any Business Day at the Company's registered office, from the date of this document until the time of the General Meeting and at the place of General Meeting for at least 15 minutes prior to and during the General Meeting.

Resolution 5 in the Notice of General Meeting, a special resolution, proposes the adoption of the New Articles.

8 Underwriting Agreement and Undertakings

Underwriting Agreement On 13 March 2024, the Company and Crown Ocean Capital entered into an Underwriting Agreement whereby Crown Ocean Capital: (i) has irrevocably undertaken to the Company to take up its own maximum Open Offer Entitlement to 468,157,600 Open Offer Shares under the Open Offer (the "Excluded Shares"); and (ii) agreed to underwrite 1,094,382,999 Open Offer Shares (the "Underwritten Shares"), being the total number of Open Offer Shares less the Excluded Shares, on a fully underwritten basis. The Company has therefore received an irrevocable undertaking from Crown Ocean Capital to take up the Excluded Shares, which represent 29.96 per cent. of the Open Offer Shares being made available under the Open Offer and, if the Company receives valid applications under the Open Offer in relation to the Underwritten Shares for less than the total number of Underwritten Shares being made available, Crown Ocean Capital has agreed to subscribe as principal for the remaining Underwritten Shares.

The obligations of Crown Ocean Capital under the Underwriting Agreement are conditional upon:

(a) Admission of the Open Offer Shares to trading on AIM taking place by 08.00 a.m. on 5 April 2024, or such later time as agreed by the Company, Shore Capital and Crown Ocean Capital, being not later than 08.00 a.m. 19 April 2024;

(b) the passing of the:

I. Resolutions (other than the Rule 9 Waiver Resolution) by the Shareholders; and

II. the passing of the Rule 9 Waiver Resolution (Resolution 1) by the Independent Shareholders, at the General Meeting.

No fee will be payable to Crown Ocean Capital in connection with the Underwriting Agreement.

Details of the current interest and maximum potential interest of Crown Ocean Capital, following the Open Offer, in the ordinary share capital of the Company are set out in the table below:

Irrevocable Undertakings

The Company has received an irrevocable undertaking to vote (or, where applicable, procure voting) in favour of the Resolutions from Eli Chahin, being the only Director who holds Existing Ordinary Shares, in respect of his own legal and/or beneficial holding of Existing Ordinary Shares, totalling 1,141,579 Existing Ordinary Shares (representing approximately 0.35 per cent. of the Existing Issued Share Capital).

The Company has also received an irrevocable undertaking to vote (or, where applicable, procure voting) in favour of the Resolutions (other than the Rule 9 Waiver Resolution) from Crown Ocean Capital, in respect of its own legal and/or beneficial holding of Existing Ordinary Shares, totalling 96,885,200 Existing Ordinary Shares (representing approximately 29.96 per cent. of the Existing Issued Share Capital).

9 Application of the Takeover Code

The Company is subject to the Takeover Code. Brief details of the Panel, the Takeover Code and the protections they afford are described below.

The Takeover Code is issued and administered by the Panel. The Takeover Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a quoted public company registered in the United Kingdom.

The Company is a quoted public company registered in the United Kingdom and its Shareholders are therefore entitled to the protections afforded by the Takeover Code.

Under Rule 9 of the Takeover Code, any person who acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person is interested.

An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

For the purposes of the Takeover Code, persons acting in concert comprise: (i) persons who, pursuant to an agreement or understanding (whether formal or informal), cooperate to obtain or consolidate control of a company; and (ii) persons who are presumed to be acting in concert pursuant to the presumptions in the definition of 'acting in concert' within the Takeover Code where such presumptions have not otherwise been rebutted.

10 The Underwriting Agreement and Rule 9 Waiver

The terms of the Open Offer and the Underwriting Agreement give rise to certain considerations under the Takeover Code.

Crown Ocean Capital is currently interested in 96,885,200 Existing Ordinary Shares, representing approximately 29.96 per cent. Of the Existing Issued Share Capital. As set out in paragraph 8 above, Crown Ocean Capital has committed to take up its maximum Open Offer Entitlement and has also agreed to subscribe for or purchase, at the Issue Price, any Underwritten Shares (as defined in paragraph 8 above) not taken up by Qualifying Shareholders under the Open Offer.

Crown Ocean Capital has confirmed to the Company, inter alia, that it is not aware of any parties which are, or which would be presumed to be, acting in concert with Crown Ocean Capital which currently own shares or securities in Bowleven, and neither it nor any party which is, or which would be presumed to be, acting in concert with Crown Ocean has any other interest in, right to subscribe for, or to take delivery of, any other securities in Bowleven.

Accordingly, following completion of the Open Offer, if Crown Ocean Capital is required to subscribe for some or all of the Underwritten Shares, Crown Ocean Capital's interest in the Company could increase to a maximum of 1,659,385,200 New Ordinary Shares (which would represent a maximum of 87.44 per cent. Of the Enlarged Share Capital and 87.99 per cent. Of the Enlarged Voting Share Capital) assuming that no other person converts any convertible securities or exercises any options or any other right to subscribe for shares in the Company and the Company issues no further Ordinary Shares between the date of this document and completion of the Open Offer. This maximum stated interest of Crown Ocean Capital assumes that no Open Offer Shares are taken up by Shareholders, other than Crown Ocean Capital, in the Open Offer. Should the Open Offer be fully subscribed by all Shareholders pro rata to their existing holdings, then Crown Ocean Capital will remain a holder of 29.96 per cent. Of the shares carrying voting rights and therefore no obligation to make an offer under Rule 9 (the subject of the proposed Rule 9 Waiver) will arise.

Given Crown Ocean Capital's participation in the Open Offer may increase its interest in the Company through 30 per cent. Of the voting rights, absent a waiver by the Takeover Panel of the resulting obligation of Crown Ocean Capital under Rule 9 of the Takeover Code, Crown Ocean Capital would be required to make a general offer for the Company in accordance with Rule 9 of the Takeover Code.

Under Note 1 of the Notes on Dispensations from Rule 9 of the Takeover Code, the Takeover Panel may waive the requirement for a general offer in accordance with Rule 9 of the Takeover Code to be made if, inter alia, the shareholders of the Company who are independent of the person(s) who would otherwise be required to make such a general offer, and any person acting in concert with them, pass an ordinary resolution on a poll at a general meeting approving such a waiver. The Panel has been consulted and has agreed to waive the requirement for Crown Ocean Capital to make a general offer under Rule 9 of the Takeover Code in cash for shares in the Company which might otherwise arise as a result of the issue of further New Ordinary Shares to Crown Ocean Capital pursuant to the Open Offer and the Underwriting Agreement, subject to the Rule 9 Waiver Resolution (as set out in the notice convening the General Meeting) being passed on a poll of the Independent Shareholders. The Rule 9 Waiver Resolution is therefore being proposed to enable the Company to issue further Open Offer Shares to Crown Ocean Capital pursuant to the Open Offer and the Underwriting Agreement, without Crown Ocean Capital being required to make a mandatory cash offer to the remaining Shareholders. To be passed, the Rule 9 Waiver Resolution will require a simple majority of the votes cast by the Independent Shareholders on a poll. Crown Ocean Capital has undertaken not to vote on the Rule 9 Waiver Resolution.

Following completion of the Open Offer and assuming that Crown Ocean Capital is required to subscribe for some or all of the Underwritten Shares (as defined in paragraph 8 above), Crown Ocean Capital is expected to be interested in, in aggregate, New Ordinary Shares carrying 30 per cent. or more of the Company's voting share capital. If that percentage is not more than 50 per cent. of such voting rights, Crown Ocean Capital would not, except with the consent of the Takeover Panel, be able to acquire further Ordinary Shares that increase its interest in the Company's voting share capital without incurring an obligation to make an offer for the Company under Rule 9 of the Takeover Code unless a further waiver is obtained (or in certain other limited circumstances). If Crown Ocean's resulting percentage interest in the Company's voting share capital following the Open Offer is more than 50 per cent., which the Board believes is a realistic possibility subject to the take-up of the Open Offer, Crown Ocean Capital would be able to increase its aggregate interest in Ordinary Shares without incurring any obligation to make an offer under Rule 9 of the Takeover Code.

Shareholders should note that the waiver of Rule 9 of the Takeover Code which the Panel has agreed to give (conditional on the Rule 9 Waiver Resolution being passed by the Independent Shareholders) is only in respect of the acquisition of New Ordinary Shares by Crown Ocean Capital as a result of the Open Offer and Underwriting Agreement and not in respect of any other future acquisition of New Ordinary Shares by Crown Ocean Capital or persons acting in concert with it (to the extent that Crown Ocean Capital's resulting interest in New Ordinary Shares is 30 per cent. or more but not more than 50 per cent.). In the event that the Rule 9 Waiver Resolution is passed by Independent Shareholders at the General Meeting, subsequently Crown Ocean Capital will not be restricted from making an offer for the Company, but will not be required to make an offer.

In the event that the Rule 9 Waiver Resolution is not passed, and the Rule 9 Waiver is therefore not approved, at the General Meeting, the Open Offer would not proceed.

The Takeover Code requires the independent directors (being both of the Directors) to obtain competent independent advice regarding the transaction which is the subject of the Rule 9 Waiver, the controlling position which it will create and the effect which that will have on the Shareholders generally. Shore Capital has provided formal advice to the Directors regarding the Open Offer and the Rule 9 Waiver and has confirmed to the Company that it is independent of Crown Ocean Capital. The substance of this advice is available at paragraph 22.

11 Corporate Governance and Board composition

Having considered the potential resulting shareholding interest of Crown Ocean Capital following completion of the Open Offer in the context of the Company's corporate governance arrangements, the Board is committing to appoint an additional independent non-executive director within twelve months of Admission, which will result in the Board comprising three directors, being two non-executive directors and one executive director (the Chief Executive Officer). The Board believes that the identification and appointment of an appropriate, suitably experienced and qualified individual is achievable within that timeframe.

12 Information on Crown Ocean Capital

Crown Ocean Capital is a globally operating investment group which provides entrepreneurial capital throughout the life cycle of a company. It invests along the capital structure in public and private equity, debt, hybrid instruments and special situations.

Crown Ocean Capital is incorporated in the British Virgin Islands with registered number 1650007 and having its registered office at Trident Chambers, PO Box 146, Road Town, Tortola, British Virgin Islands.

Further information on Crown Ocean Capital is available on its website www.crownoceancapital.com.

The current directors of Crown Ocean Capital are Konstantin Stoyanov, Christian Petersmann and Oskar Nilner. The ultimate beneficial owners of Crown Ocean Capital are Konstantin Stoyanov and Christian Petersmann.

13 Relationship between Crown Ocean Capital, the Directors, the Independent Shareholders and Shore Capital

There are no relationships (personal, financial or commercial), arrangements or understandings between Crown Ocean Capital and any of the Directors.

Crown Ocean Capital has no relationships (personal, financial or commercial), arrangements or understandings with any of the Independent Shareholders or any person who is, or is presumed to be, acting in concert with any such Independent Shareholder.

Crown Ocean Capital has no relationships (personal, financial or commercial), arrangements or understandings with Shore Capital or any person who is, or is presumed to be, acting in concert with any Shore Capital.

14 Intentions of Crown Ocean Capital

Crown Ocean Capital has confirmed that, if the Rule 9 Waiver Resolution is passed by the Independent Shareholders on a poll, there is no agreement, arrangement or understanding for the transfer of its Ordinary Shares to any third party. Crown Ocean Capital is not intending to seek any changes in respect of: the future of the Company's business; any planned investment in research and development; the continued employment of the Company's employees and management, including any material change in conditions of employment or balance of skills and functions; the composition of the Board; the locations of the Company's places of business, headquarters and headquarter functions; employer contributions into the Company's pension schemes, the accrual of benefits for existing members and the admission of new members; any redeployment of the fixed assets of the Company as a result of such proposals; and the maintenance of any existing trading facilities for the relevant securities of the Company.

Crown Ocean Capital has also confirmed that, as a result of and following completion of the Open Offer, there will be no significant impact on its earnings, assets or liabilities and it does not intend to change its business strategy and that, as a result of and following completion of the Open Offer, there is no intention to discontinue the employment of its existing employees and management, nor will there be any material change in their conditions of employment.

The Board considers that, as a result of and following completion of the Open Offer, there will be no significant impact on the Company's earnings, assets or liabilities and the Company does not intend to change its business strategy and that, as a result of and following completion of the Open Offer, there is no intention to discontinue the employment of its existing employees and management, nor will there be any material change in their conditions of employment. The Board welcomes Crown Ocean's strategic plans and future operations.

15 Material Contracts

Save for the Underwriting Agreement entered into between the Company and Crown Ocean Capital as described more fully in paragraph 8 and 10 above, there have been no material contracts (other than contracts entered into in the ordinary course of business) entered into by: (i) the Company or any of the Company's subsidiaries; or (ii) Crown Ocean Capital, in the period of two years prior to the date of this document.

16 Intentions to vote in favour of the Resolutions

The Company has received confirmation from the following Directors and Shareholders that they intend to vote in favour of the Resolutions (other than, in the case of Crown Ocean Capital, the Rule 9 Waiver Resolution) in respect of the following number of Existing Ordinary Shares:

17 Related Party Transaction

The entering into the Underwriting Agreement by the Company, and Crown Ocean Capital's undertaking to apply for its Open Offer Entitlement under the Open Offer in full, is a related party transaction pursuant to Rule 13 of the AIM Rules, as a result of Crown Ocean Capital being a substantial shareholder of the Company for the purposes of the AIM Rules.

An explanation of the Directors' considerations in relation to the Underwriting Agreement and Open Offer, and the availability of other potential sources of finance, is set out in more detail in paragraph 3 above.

The Directors of Bowleven consider, having consulted with Shore Capital, the Company's Nominated Adviser, that the terms of the Underwriting Agreement and Crown Ocean Capital's participation in the Open Offer, are fair and reasonable insofar as Shareholders are concerned.

18 General Meeting

You will find set out at the end of this document a notice convening the General Meeting to be held at 10.00 a.m. on 2 April 2024 at The Office Group, Borough Yards, 13 Dirty Lane, London, SE1 9PA. Details of the Resolutions which will be proposed at the General Meeting are set out below:

· Resolution 1 proposes the disapplication of Rule 9 of the Takeover Code following the issue of further Ordinary Shares to Crown Ocean Capital pursuant to the Open Offer and the Underwriting Agreement. The Panel has confirmed that, subject to the Rule 9 Waiver Resolution being passed by the requisite majority of the Independent Shareholders on a poll, no mandatory bid obligation on Crown Ocean Capital under Rule 9 of the Takeover Code would be triggered by virtue of the issue of Ordinary Shares to Crown Ocean Capital pursuant to the Open Offer and the Underwriting Agreement.

· Resolution 2, which is conditional upon the passing of Resolutions 1 and 5, is an ordinary resolution to authorise the Directors to sub-divide each Existing Ordinary Share of 10 pence into one New Ordinary Share of 0.1 pence in nominal value and one Deferred Share of 9.9 pence in nominal value, with the Deferred Shares having the rights and being subject to the restrictions set out in the New Articles.

· Resolution 3, which is conditional upon the passing of Resolutions 1, 2 and 5, is an ordinary resolution to authorise the Directors to allot the Open Offer Shares.

· Resolution 4, which is conditional upon the passing of each of the other Resolutions, is a special resolution to disapply pre-emption rights under the Act in respect of the Open Offer Shares to be allotted.

· Resolution 5, which is conditional on the passing of Resolution 2, is a special resolution to adopt the New Articles, which include the rights and restrictions attaching to the Deferred Shares. A copy of the New Articles, marked up to show the changes being proposed, will be available on the Company's website www.bowleven.com and for inspection free of charge during normal business hours on any Business Day at the Company's registered office from the date of this Circular until the time of the General Meeting and at the place of General Meeting for at least 15 minutes prior to and during the General Meeting.

In accordance with the requirements of the Takeover Code, Crown Ocean Capital has undertaken not to vote on the Rule 9 Waiver Resolution in respect of its aggregate holding of 96,885,200 Ordinary Shares.

The Proposals are conditional, inter alia, on the passing of the Resolutions and Admission taking place on 5 April 2024 (or such later date as the Company, Shore Capital and Crown Ocean Capital may decide, being no later than 08.00 a.m. on 19 April 2024).

The Company specifies that only those Shareholders registered on the Company's register of members at:

· 6.00 p.m. on 12 March 2024; or

· if the General Meeting is adjourned, at 6.00 p.m. on the day two days (excluding non-working days) prior to the adjourned meeting,

shall be entitled to attend and vote at the General Meeting.

Voting on the Resolutions will be by way of a poll and, following the General Meeting, the Company will announce its results via a regulatory news service announcement and on the Company's website at www.bowleven.com.

19 Actions to be taken

In respect of the General Meeting

A Form of Proxy is enclosed for use at the General Meeting. Whether or not you intend to be present at the meeting you are requested to complete, sign and return the Form of Proxy to the Company's Registrar, Computershare by no later than 10.00 a.m. on 27 March 2024. The completion and return of a Form of Proxy will not preclude you from attending the meeting and voting in person should you wish to do so.

In respect of the Open Offer

Qualifying non-CREST Shareholders

If you are a Qualifying non-CREST Shareholder you will have received an Application Form which gives details of your maximum entitlement under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you). If you wish to apply for Open Offer Shares under the Open Offer, you should complete the accompanying Application Form in accordance with the procedure for application set out in paragraph 4.1 of Part IV of this document and on the Application Form itself.

Qualifying CREST Shareholders

If you are a Qualifying CREST Shareholder and do not hold any Ordinary Shares in certificated form, no Application Form accompanies this document and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your maximum entitlement under the Open Offer except (subject to certain exceptions) if you are an Overseas Shareholder who has a registered address in, or is a resident in or a citizen of an Excluded Territory.

The latest time for applications under the Open Offer to be received is 11.00 a.m. on 2 April 2024. The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your entitlement under the Open Offer or have Open Offer Entitlements credited to your stock account in CREST in respect of such entitlement. The procedures for application and payment are set out in Part IV of this document.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Open Offer.

20 Overseas Shareholders

Information for Overseas Shareholders who have registered addresses outside the United Kingdom or who are citizens or residents of countries other than the United Kingdom appears in paragraph 6 of Part IV of this document, which sets out the restrictions applicable to such persons. If you are an Overseas Shareholder, it is important that you read that part of this document.

21 Importance of Vote

Your attention is drawn to the fact that the completion of the Open Offer is conditional upon, amongst other things, all of the Resolutions being passed at the General Meeting.

Shareholders are asked to vote in favour of all Resolutions at the General Meeting. The Board believes that the successful completion of the Open Offer will significantly strengthen the Group's balance sheet, will provide additional working capital for general corporate purposes, and will provide the Company with funds in order to meet required future short-term contributions for Etinde Permit project expenditure.

If the Resolutions are not passed by the requisite percentage of members of the Company, the Open Offer will not proceed and the New Ordinary Shares will not be issued. Importantly, in such a circumstance, whilst the Group would be able to continue to trade for a short period, it does not expect to have enough funds to continue to meet its obligations after Q2 2024, and thus its solvency position would be put under significant pressure. In the absence of the Open Offer, the Group would need to re-review its short-term financing arrangements and it cannot guarantee that another financing option will be forthcoming. The Board believes that the Open Offer is in the best long-term interests of the Group and its Shareholders, to assist the Group in funding its operations towards FID.

22 Recommendation

The Directors, who have been so advised by Shore Capital, consider the Open Offer and the Rule 9 Waiver Resolution to be fair and reasonable and in the best interests of the Company and its Shareholders as a whole and therefore recommend Shareholders to vote in favour of the Resolutions. An explanation of the Directors' considerations in relation to its opinion on, and recommendation of, the Open Offer is set out in more detail in paragraph 3 above. In giving its advice, Shore Capital has taken account of the commercial assessments of the Directors.

RISK FACTORS

Investing in the Group involves a degree of risk. You should carefully consider the risks and the other information contained in this document before you decide to invest in the Group. You should note that the risks described below are not the only risks faced by the Group. There may be additional risks that the Directors currently consider not to be material or of which they are not presently aware.

The business and financial condition of the Group could be adversely affected if any of the following risks were to occur and as a result the trading price of the Ordinary Shares could decline and investors could lose

part or all of their investment.

The Directors consider the following risks to be material for potential investors, but the risks listed below do not necessarily comprise all those associated with an investment in the Company and are not set out in order of priority. Additional risks and uncertainties currently unknown to the Company (such as changes in legal, regulatory or tax requirements), or which the Company currently believes are immaterial, may also have a materially adverse effect on the Group's financial condition or prospects or the trading price of Ordinary Shares.

General risks

The Ordinary Shares are traded on AIM rather than the main market of the London Stock Exchange. An investment in shares traded on AIM may carry a higher risk than an investment in shares listed on the Official List of the FCA and traded on the main market of the London Stock Exchange.

An investment in the Group is only suitable for investors capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss which may result. A prospective investor should consider with care whether an investment in the Group is suitable for them in the light of his personal circumstances and the financial resources available to them.

Investment in the Group should not be regarded as short-term in nature. There can be no guarantee that any appreciation in the value of the Group's investments will occur or that the investment objectives of the Group will be achieved. Investors may not get back the full, or any, amount initially invested, especially as the market in Open Offer Shares on AIM may have limited liquidity.

The prices of shares and the income derived from them can go down as well as up. Past performance is not necessarily a guide to the future.

Changes in economic conditions including, for example, interest rates, rates of inflation, industry conditions, commodity prices, international regulatory changes, competition, political and diplomatic events and trends, tax laws and other factors can substantially and adversely affect equity investments and the Group's prospects.

Risks relating to the Group and its business

Delay in Final Investment Decision

The Group is due to receive a $25 million cash payment from its JO partners at FID. FID is currently anticipated in 2025 at the earliest. There are a number of factors which may delay (or even preclude) FID taking place, including political and regulatory factors and/or inadequate financial investment return (from factors such as low oil price, increase in project costs, partner funding difficulties, project investment quantum), inability to agree a development plan or meaningfully progress the project with the relevant stakeholders, or potential loss of licence interest. Any delay in FID may have an adverse impact on the Group's business, cashflow, financial condition and operations.

The Open Offer will provide the Company with working capital for an estimated period through to approximately mid-2025, on the basis of an assumed level of contributions to on-going JV operations at Etinde. Whether there are sufficient financial resources to cover Bowleven's on-going joint operations and internal operational costs during and after that period is partly dependent on the work programme that has as yet not been proposed for 2024, and future work programmes. Whilst it depends on the timing of FID and on the revised work programme agreed by the JO Partners, Bowleven is very likely to need to raise additional short-term finance to bridge the gap to FID which it may not be able to secure on reasonable commercial terms to satisfy increased capital expenditure and project contribution requirements. If this happens, the Group's business, cashflow, financial condition and operations may be materially adversely affected

Operator risk

The Etinde Permit is operated by a third-party operator, namely, New Age. Whilst the Company has certain rights under the JOA which provide it with the ability to influence management and/or operations at Etinde, the Company and its JO Partners rely on New Age to carry out the day-to-day management of operations. The Company is also dependent on New Age implementing the decisions that have been or will be agreed among the JO Partners and any mismanagement or delay at Etinde by New Age may result in delays, disruptions or increased costs with respect to achieving FID.

The Group may suffer unexpected costs or other losses if New Age or any future operator at Etinde does not meet its obligations in relation to Etinde, including as a result of the Etinde Permit itself being withdrawn by SNH as a result of the operator's failure to complete the agreed work programme. Any inability of the operator to meet the development milestones due to resource constraints (whether financial, operational or otherwise) as a result of having scaled back its operations in anticipation of the New Age/Perenco Transaction completing, or otherwise being unable to mobilise sufficiently quickly following a new development plan being agreed by the JO Partners could result in delays, disruptions or increased costs with respect to achieving FID, or could potentially result in loss of withdrawal of the Etinde Permit or an inability to reach FID at all.  

Future expenditure requirements at Etinde

The New Age/Perenco Transaction failed to complete and has adversely impacted progress at the Etinde project during the period following the New Age/Perenco Transaction being agreed through to its termination. This has delayed FID and could have a material effect on Bowleven's anticipated contributions to future project expenditure, as well as the proposed development approach in respect of the Etinde permit. The Group's business, cashflow, financial condition and operations may be further unfavourably impacted to the extent a development plan is not agreed by all stakeholders within a reasonable timeframe which will have a material impact on continued business operations.

To date no Etinde Permit work plan or budget for 2024 has conclusively been agreed and discussions are currently taking place between the JO Partners. The Group's expenditure going forwards will be determined by the work plan that will be proposed by the existing operator, New Age. Bowleven considers that New Age may wish to review the previously agreed Equatorial Development Scheme, propose alternative(s), and update the front-end engineering design to reflect any change in the approved development scheme and to reflect current cost inflation for FID purposes. Any changes will need to be approved by the Joint Venture Partners as a group as well as SNH, as regulator, before implementation. Whilst the timing and impact of this remains uncertain, its impact on current expenditure levels, when agreed, is expected to be substantial which could require Bowleven to seek to raise additional financing in order to meet its expenditure contributions to the Etinde project. Bowleven's ability to raise sufficient future funding is highly uncertain and, if it is unable to do so, its financial condition and ability to continue to operate could be materially adversely affected.

Potential removal of Etinde licence

Under the terms of the Presidential decree and the Etinde exploitation licence, the JO partners had an obligation to finish the development phase of the asset within a six-year window from January 2015. The original licence is based on the 2013/14 fertiliser scheme development, a 500 bcf/20 year commitment for Etinde gas production to be sold to a government-owned fertiliser project under study at that time. Bowleven (as operator at that date) entered into a series of contracts on behalf of the Etinde JO partners. This SNH/Government development project did not proceed and Etinde development was indefinitely delayed during 2016/17. New Age, as operator at that time, proposed an alternative FLNG based development, which also failed following the 2018 appraisal drilling showing that the total Etinde gas resources were too small to support FLNG on a stand-alone basis.

The current PSC terminates in 2045. However, failure to complete the initial work programme set out in the Presidential decree and EEA documentation within the first six years after approval in January 2015, may be used to provide grounds under which the Government of Cameroon can proceed to terminate the Etinde development licence early at their option, following the process set out in the Cameroon Petroleum Code.

SNH has the ability to withdraw the Etinde licence as a result of the non-compliance with the terms and the Group cannot guarantee that the Etinde licence will not be withdrawn or made subject to possibly onerous conditions.

LUKOIL financial sanctions

To the Board's knowledge, there are currently no sanctions affecting LUKOIL, although two former directors of LUKOIL have been subject to sanctions as individuals. There can be no assurance that future sanctions will not be imposed that restrict the ability of the Group to contract with LUKOIL and, in particular, following the Russian invasion of Ukraine, western financial institutions may not be comfortable having LUKOIL as a long-term development partner for New Age and Bowleven. In the event LUKOIL was subjected to international sanctions, this could adversely affect the business and financial condition of the Group as a result of limiting the Group's ability to fund its contribution to the Etinde development.

Environmental impact

The Group's operations are, and will be, subject to environmental regulation in Cameroon and any other countries in which the Group may operate. Environmental regulations may evolve in a manner that will require stricter standards and enforcement measures being implemented, increases in fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors and employees. Compliance with environmental regulations could increase the Group's costs.

Environmental legislation and policy may be periodically amended. Such amendments may result in stricter standards of enforcement and in more stringent fines and penalties for non-compliance. The costs of compliance associated with changes in environmental regulations could require significant expenditure, and breaches of such regulations may result in the imposition of material fines and penalties. In an extreme case, such regulations may result in temporary or permanent suspension of production operations. There can be no assurance that these environmental costs or effects will not have a materially adverse effect on the Group's future financial condition or results of operations.

The Group's operations are subject to industry operating risks including the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as accidental spills or leakage of petroleum liquids, gas leaks, ruptures or discharges of toxic gases, the occurrence of any of which could result in substantial losses to the Group due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties and suspension of operations. Damages occurring as a result of such risks may give rise to claims against the Group and its partners which may not be covered, in whole or part, by insurance.

In addition, there may be adverse investor and lender sentiment towards the oil and gas sector due to the environmental impact of the industry and a longer-term reduction in demand for oil and gas. These factors could result in lower oil and gas prices and an adverse impact on the Group's business, cash flow, financial condition and operations.

Funding risk

As set out above, the Company may need to raise further funds in the future. Any additional equity financing may be dilutive to Shareholders, and debt financing, if available, may involve restrictions. In addition, there can be no assurance that the Company will be able to raise additional funds when needed or that such funds will be available on terms favourable to it. If the Company is unable to obtain additional financing as needed it may be required to reduce the scope of its operations and/or cease trading.

Reliance on JO Partners

The Group is subject to risks involving third party operators, contract counterparties, partners and other project participants. Furthermore, disagreements with, or the exercise of termination rights by, any of the Group's partners or contract counterparties (past, current or future) may result in delays, losses or additional costs to the Group.

Both the Group and its partners are obliged to comply with the requirements of the applicable contracts, joint operating agreements and other arrangements governing their respective relationships. The Group may suffer unexpected costs or other losses if any JO partner does not meet its obligations. For example, other participants may experience financial or other difficulties or otherwise default on their obligations to meet capital or other funding obligations in relation to the Etinde assets. Furthermore, any failure by a third-party operator or the Group to carry out its obligations with respect to Etinde could put the licence for that asset at risk.

Co-operation and agreement among project participants on existing or future projects is important for the smooth operation and financial success of such projects and if one or more project participants were to fail to cooperate, it may delay or disrupt existing or future projects. Further, operators, partners and other project participants that own interests in assets in which the Group has interests may have economic or business interests or objectives that are inconsistent or conflict with those of the Group and may elect not to participate in certain activities relating to those assets or withhold their consent in circumstances when their consent is required, which may limit the ability of the Group and other interest holders to explore, appraise or develop such assets as planned.

In addition, certain of the Group's contractual arrangements may permit the counterparty to terminate the relationship under certain circumstances. Any loss of a third-party operator (and any resulting loss of the licence to the field operated by such operator) or partner could also impact the Group's ability to develop the field in accordance with the development plans, or at all, which could impact oil and gas production at a given field and could impact the revenues earned by the Group with respect to the field. Furthermore, contract counterparties may seek to renegotiate contractual terms in the event of changes in their business or operating environment, economic hardship or financial distress. In such circumstances, the Group may have to resort to legal process to enforce its contractual rights and such processes can be time consuming and costly and could result in an adverse outcome for the Group. The occurrence of any of the above could have a material adverse effect on the Group's business, results of operation, financial condition and prospects.

The occurrence of any of the above could have a material adverse effect on the Group's business, results of operation, financial condition and prospects.

Insufficient domestic gas demand

The expected demand for domestic gas in Cameroon may be less than anticipated. In particular, if the Government of Cameroon decides to move away from domestic gas as a key component of Cameroon's domestic energy supply, expected growth in demand for domestic gas could be materially impacted.

Volatility in hydrocarbon prices

The profitability of the Group's operations will be dependent, inter alia, upon the market prices of oil and gas. Oil and gas prices are affected by numerous factors beyond the control of the Group, including international economic and political conditions, levels of supply and demand, the policies of the Organization of Petroleum Exporting Countries (OPEC) and currency exchange rates. Movements in market prices over a sustained period could render uneconomic any of the exploration and production activities undertaken or to be undertaken.

Estimation of reserves, resources and production profiles

The estimation of oil and gas reserves and their anticipated production profiles involves subjective judgements and determinations based on available geological, contractual, technical and economic information. They are not exact determinations. In addition, these judgements may change based on new information from production or drilling activities or changes in economic factors, as well as from developments such as acquisitions and disposals, new discoveries and extensions of existing fields or the application of improved recovery techniques. Published reserve estimates are also subject to correction for errors in the application of published rules and guidance.

HSSE risks

Developing oil and gas reserves and resources into commercial production involves a high degree of risk. The Group's operations are subject to all the risks common in its industry. These hazards and risks include encountering unusual or unexpected rock formations or geological pressures, geological uncertainties, seismic shifts, blowouts, oil spills, uncontrollable flows of oil, natural gas or well fluids, explosions, fires, improper installation or operation of equipment and equipment damage or failure, including failure to comply with regulatory requirements expected of a Western country (such as comprehensive health and safety processes). Personal injuries suffered as a result of the foregoing are likely to be exacerbated as a result of a lack of access to medical care facilities and healthcare professionals.

If any of these types of events were to occur, they could result in loss of production, environmental damage, injury to persons and loss of life. They could also result in significant delays to drilling programmes, a partial or total shutdown of operations, significant damage to equipment owned or used by the Group or the joint venture operator and personal injury, wrongful death or other claims related to loss being brought against the Group. The joint venture operator may also be required to curtail or cease operations on the occurrence of such events. Any of the above could have a material adverse effect on the Group's business, prospects, financial condition or results of operations.

While the Group has implemented certain policies and procedures to identify and mitigate such hazards, and developed, alongside the joint venture partners, appropriate work plans and approvals for high-risk activities to prevent accidents from occurring, these procedures may not be sufficiently robust or appropriately followed by the Group's staff or third-party contractors to prevent accidents.

Country and Security risks

The Group's operations are reliant on the political and economic situation in Cameroon. Whilst the Group will make every effort to ensure it has secure commercial and legal agreements on its assets as well as complying with legislation during its activities, there is a risk that the Group's activities will be impacted by political factors such as appropriation, war, terrorism, insurrection and changes to laws governing gas exploration and operations.

Currently, there is political instability in Cameroon and it is expected that the risks around such instability will remain high in the coming years. Issues such as political succession, food security, and foreign direct investment will continue to be challenging and give rise to the risks of further political instability. There is a risk of unrest following recent mass retrenchment within the Cameroonian civil service and the potential for army intervention remains a possibility.

As with other West African countries, Cameroon can experience high levels of criminal activity and oil and gas companies operating in Cameroon may be particular targets of criminal or terrorist actions. Criminal, corrupt or terrorist action against the Group and its directly or indirectly held properties or facilities could have a material adverse effect on the Group's business, results of operations or financial condition. In addition, the fear of criminal or terrorist actions against the Group could have an adverse effect on the ability of the Group to adequately staff and/or manage its operations or could substantially increase the costs of doing so. The Group faces a threat of terrorism as a result of its proximity and accessibility to various regional Islamist insurgencies.

The Group may be the target of attempted cyber-attacks. While the Group maintains systems and controls designed to detect and prevent such events from occurring, the Group may not be able to anticipate, detect or implement effective preventive measures against all cyber threats. Cyber-attacks can take many forms across a wide range of channels and their initiators can be varied, including opportunists, state-sponsored or, as a hydrocarbons producer, the Group may be the target of "eco-hacktivists". Cyber-attacks are typically designed to deny service, obtain unauthorised access to confidential information, manipulate or destroy data, disrupt or destroy IT or production control systems or steal money. There have been in the past highly publicised cases where hackers have requested "ransom" payments in exchange for not disclosing customer information or for restoring access to information or systems, including systems critical to the day- to-day operations of the business. Cyber-attacks are increasingly sophisticated, rapidly evolving and may be far reaching and difficult to prevent and they may not be recognised until launched. Further, third parties may seek to gain access to the Group's systems either directly or using equipment or security passwords belonging to the Group's personnel or third-party service providers. If a cyber- attack or other information security breach were to occur, this could have a material adverse effect on the Group, including, the misappropriation of confidential information belonging to the Group, damage to the Group's computer systems infrastructure and production control systems, environmental damage, fines, penalties and other financial loss to the Group. The Group's reputation may also be adversely affected resulting in a loss of business opportunities. The Group may also become exposed to litigation and regulatory sanctions.

Bribery and corruption risks

The Group is subject to certain laws, including the UK Bribery Act 2010 (the "Bribery Act"), and other laws and regulations that prohibit companies and their intermediaries from making improper payments or offers of payments to foreign governments and their officials and political parties, or others for the purpose of obtaining or retaining business and other benefits ("Compliance Laws"). Cameroon is ranked 142 out of 180 countries in Transparency International's 2022 Corruption Perceptions Index.

By doing business in Cameroon, there is a risk that the Group may face, directly or indirectly, corrupt demands by officials, militant groups or private entities. Consequently, the Group faces the risk that one or more of the Group's employees, agents, intermediaries or consultants may make or receive unauthorised payments given that such persons may not always be subject to the Group's control. Although the Group has policies and procedures designed to ensure that the Group, its employees, agents, intermediaries and consultants adhere to Compliance Laws and will implement policies and procedures with respect to all applicable anti-corruption legislation, there is no assurance that such policies or procedures will work effectively all of the time or protect the Group against liability under any such legislation for actions taken by our agents, employees, intermediaries and consultants with respect to the Group's business. If the Group is not in compliance with the Bribery Act or other Compliance Laws governing the conduct of business with Cameroon Government entities (including local laws), the Group may be subject to criminal and civil penalties and other remedial measures.

Furthermore, any remediation measures taken in response to potential or alleged violations of Compliance Laws, including any necessary changes or enhancements to the Group's procedures, policies and controls and potential personnel changes and/or disciplinary actions, may result in increased compliance costs. Any such findings, or any alleged or actual involvement in corrupt practices or other illegal activities by the Group or its commercial partners or anyone with whom the Group conducts business could damage its reputation and its ability to do business, including by affecting the Group's rights and title to assets or by the loss of key personnel, and together with any increased compliance costs, could adversely affect the Group's business, results of operations, cashflows, financial condition and prospects.

There is concern in the oil and gas industry that, following the letter of the law, the Bribery Act prohibits certain practices which are not covered by the anti-corruption legislation and regulations of the relevant host jurisdiction (to which the Group is bound), but which are regarded as standard industry practice (for example, facilitation payments). It may not be possible for the Group to detect or prevent every instance of fraud, bribery or corruption. Failure to detect or prevent any such instances may expose the Group to potential civil or criminal penalties under relevant applicable law and to reputational damage, which may have a material adverse effect on the Group's business, prospects, financial condition or results of operations.

Staff recruitment, development and retention

The future performance of the Group will to a significant extent be dependent upon its ability to retain the services and personal connections or contacts of key executives, to attract, recruit, motivate and retain other suitably skilled, qualified and industry experienced personnel to form a high-calibre management team and to develop a succession plan for key executives. Such key executives are expected to play an important role in the development and growth of the Group, in particular, by maintaining good business relationships with regulatory and governmental departments and essential partners, contractors and suppliers.

Attracting and retaining highly skilled talent is expected to be fundamental to the successful implementation of the Group's strategy and continued growth. There is intense competition for high-calibre individuals and there can be no guarantee that the Group will be successful in identifying and recruiting individuals necessary to continue to grow its business and implement its strategy.

Many of the Group's competitors are larger, have greater financial and technical resources, as well as staff and facilities, and have been operating in a market-based competitive economic environment for much longer than the Group.

There can be no assurance that the Group will retain the services of any key executives, advisers or personnel who have entered into service agreements or letters of appointment with the Group. The loss of the services of any of the key executives, advisers or personnel may have a material adverse effect on the business, operations, relationships and/or prospects of the Group.

Changes to the fiscal or tax regime

The Government of Cameroon has significant influence over its domestic oil and gas sectors, and its decisions and/or actions may directly or indirectly adversely impact the operations of the Group in Cameroon.

The Government of Cameroon plays a significant role in regulating its oil and gas industry. Accordingly, any action or decisions taken by the Government of Cameroon concerning the oil and gas industry, or economy more generally, could have an unexpected and materially adverse effect on the Group's business, results of operations, cashflows, financial condition and prospects. Such risks include expropriation or renationalisation, breach, abrogation or renegotiation of concession/project agreements, denials of required permits and approvals, changes in law or policy, increases in royalty rates and taxes and the application of exchange or capital controls.

Future changes to the fiscal or tax regime in the jurisdictions within which the Group operates may adversely impact the commercial viability of the Group's current, future or potential producing assets.

Failure of producing assets

Projections of future production are based on historic production levels and reserve estimates. Generally accepted, industry standard reserves reporting techniques have been used to calculate reserves and resources. All estimates of reserves and resources involve some degree of uncertainty.

The Group will be reliant for processing and transportation of its production on pipelines and facilities operated by others over which it has no control. Oil and gas production levels may be adversely affected by events which are completely unrelated to the performance of the Group's assets. Future production and the quantity of recoverable reserves may vary significantly from that expected, and could affect the estimated remaining quantity of the Group's reserves and, therefore, the commercial viability of the Group's current, future or potential producing assets.

Project delays and cost overruns

Delays in the construction and commissioning of projects or other technical difficulties may result in the Group's current or future projected target dates for production being delayed or further capital expenditure being required.

Cost estimates for future capital projects are based on current prices for similar projects. Fluctuations in raw material, equipment or labour costs, regulatory requirements or unanticipated costs arising through the planning process as well as development delays may significantly increase project costs beyond those originally forecast and may impact the commercial viability of a project.

Oil and gas exploration and development activities are dependent on the availability of drilling and related equipment in the particular areas where such activities will be conducted. Demand for such limited equipment or access restrictions may affect the availability of such equipment to the Group and may delay exploration and development activities.

Inadequate funding or access to capital

The Group has limited financial resources. Continued funding of the exploration and development of the Group's assets and/or the acquisition of new assets may be dependent upon the Group's ability to obtain suitable financing. There can be no assurance that such funding required by the Group will be made available to it and, if such funding is available, that it will be offered on reasonable terms.

Major release of oil or gas at an exploration, appraisal or production site

The operations of the Group may be disrupted by a variety of risks and hazards, including environmental hazards, industrial accidents, occupational and health hazards, technical failures, inclement or hazardous weather conditions, explosions or other accidents. These risks and hazards could result in damage to, or the destruction of, production facilities, personal injury, environmental damage, business interruption, monetary losses and possible legal liability. While the Group maintains insurance within ranges of coverage consistent with industry practice, no assurance can be given that the Group will be able to obtain such insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any such claims.

Sustained exploration failure

The business of oil and gas exploration involves a high degree of risk which a combination of experience, knowledge and careful evaluation may not be able to prevent. Few properties that are explored are ultimately developed into producing oil or gas fields. There is no assurance that oil or gas will be discovered or, even if it is, that economically viable and commercial quantities of oil or gas can be recovered from the Group's existing or future licence areas. No assurance can be given that when commercial reserves are discovered the Group will be able to realise such reserves as intended.

The Cameroon judicial system may create an uncertain environment for investment and business activity

The legal system in Cameroon, as with many developing countries, continues to develop and mature. As a result, the Group may become subject to certain difficulties in obtaining effective or consistent legal redress due to a number of factors out of its control. Such difficulties may include delay, the level of discretion that may be exercised by the courts or governmental authorities, insufficient judicial or administrative guidance on interpreting applicable rules and regulations, inconsistencies or conflicts between and within various existing laws, regulations, decrees, orders and resolutions and/or the relative inexperience of the judiciary and courts in commercial matters. In addition, the enforcement of laws or the Group's statutory or contractual rights may depend on, and be subject to the interpretation of, the relevant local authority, and such interpretation may differ from the advice given to the Group by local lawyers and potentially result in unexpected outcomes.

It is possible that any adverse finding against the Group, or any restriction placed on the Group in exercising its contractual or statutory rights, could have a material adverse effect on the Group's business, financial condition and/or prospects.

Governmental relations may change and retention of key business relationships

In order to protect the Group's licences and permits to operate and its ability to secure new resources, it is important that the Group should maintain strong positive relationships with the governments of, and communities in, the countries where its business is conducted. Failure - real or perceived - to maintain these relationships could harm the Group's reputation, which could, in turn, impact the Group's licences, financing and access to new opportunities.

Although the Company uses its influence in the JO Management Committee(s) to support the JO Operator in ensuring that there are open communication channels with Cameroon Government agencies and ensures that it is represented at the in-country meetings to discuss JO business with SNH and government officials, there can be no assurance that the actions of present or future governments in Cameroon, together with governments of other countries in which the Group may operate, directly or indirectly, in the future and supra-national authorities (such as CEMAC), will not materially adversely affect the business or financial condition of the Group.

The Group will rely significantly on strategic relationships with other entities, on good relationships with regulatory and governmental departments and upon third parties to provide essential contracting services. There can be no assurance that its existing relationships will continue to be maintained or that new ones will be successfully formed, and the Group could be adversely affected by changes to such relationships or difficulties in forming new ones. Any circumstance that causes the early termination or non-renewal of one or more of these key business alliances or contracts could adversely impact the Group, its business, operating results and prospects.

Risks relating to the Ordinary Shares

Investment risk and AIM

There is no guarantee that the Group will maintain its quotation on AIM. The Group cannot assure investors that the Group will always retain a quotation on AIM. If it fails to retain such a quotation, certain investors may decide to sell their shares, which could have an adverse impact on the price of the Ordinary Shares. Additionally, if in the future the Group decides to obtain a quotation on another exchange in addition to AIM, the level of liquidity of the Ordinary Shares traded on AIM could decline.

Suitability of Ordinary Shares as an investment

The Ordinary Shares may not be a suitable investment for all people receiving this document. Before making any investment, potential investors should consult an appropriately qualified investment adviser, authorised in the UK by the FCA, who specialises in advising on the acquisition of listed securities. The value of the Ordinary Shares and the income received from them can go down as well as up and investors may get back less than their original investment.

Risks relating to investment in the Group's Ordinary Shares

Share prices may fluctuate from time to time for various reasons. As well as being affected by the Group's actual or forecast operating results, the market price of the Ordinary Shares may fluctuate significantly as a result of factors beyond the Group's control, including among others:

· Changes in research analysts' recommendations or any failure by the Group to meet the expectations of research analysts;

· Changes in the performance of the petroleum sector as a whole and of any of the Group's competitors;

· Fluctuations in share prices and volumes, and general market volatility; and

· Involvement of the Group in any litigation.

Liquidity in market for the Ordinary Shares

The Group cannot predict the extent to which an active market for the Ordinary Shares will continue after Admission, or how future developments might affect the market price of the Ordinary Shares. An illiquid market for the Ordinary Shares may result in lower trading prices and increased volatility, which may adversely affect the value of an investment in the Ordinary Shares. The market price of the Ordinary Shares may fluctuate significantly in response to a number of factors, many of which may be out of the Group's control. The share price of publicly traded companies can be highly volatile. The price at which the Ordinary Shares may be quoted and the price which Shareholders may realise for their respective Ordinary Shares will be influenced by a large number of factors, some specific to the Group and its operations and some which may affect the industry as a whole or quoted companies generally. These factors include those referred to in this Part II, as well as the Group's financial performance, stock market fluctuations share option grants, vesting and exercises, and general economic conditions. Share price volatility arising from such factors may adversely affect the value of an investment in the Ordinary Shares.

Risks relating to the Open Offer

There may be volatility in the price of the Open Offer Shares

The Issue Price may not be indicative of the market price for the Open Offer Shares following Admission. The market price of the Open Offer Shares could be volatile and subject to significant fluctuations due to a variety of factors, including changes in sentiment in the market regarding the Company, the sector or equities generally, any regulatory changes affecting the Group's operations, variations in the Group's operating results and/or business developments of the Group and/or its competitors, the operating and share price performance of other companies in the industries and markets in which the Group operates, news reports relating to trends in the Group's markets or the wider economy and the publication of research analysts' reports regarding the Company or the sector generally.

In addition, to the extent that Shareholders do not take up the Open Offer Shares under the Open Offer, their proportionate ownership and voting interest in the Company will be reduced and the percentage that their Ordinary Shares represents of the Enlarged Share Capital will be reduced accordingly. Subject to certain exceptions, Shareholders in the United States and other Excluded Territories will not be able to participate in the Open Offer.

Pre-emptive rights may not be available for US and other non-UK holders of ordinary shares

In the case of an increase in the share capital of the Company for cash, the Shareholders are generally entitled to pre-emption rights pursuant to the Act unless such rights are waived by a special resolution of the Shareholders at a general meeting (as proposed in the Resolutions), or in certain circumstances stated in the Articles, and such an issue could dilute the interests of the Shareholders. To the extent that pre-emptive rights are applicable, US and certain other non-UK holders of Ordinary Shares may not be able to exercise pre-emptive rights for their shares unless the Company decides to comply with applicable local laws and regulations and, in the case of US holders, unless a registration statement under the US Securities Act is effective with respect to those rights or an exemption from the registration requirements thereunder is available. The Open Offer Shares to be issued will not be registered under the US Securities Act. Qualifying Shareholders who have a registered address, or who are resident in, or who are citizens of, countries other than the United Kingdom should consult their professional advisers about whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Open Offer Entitlements or acquire Open Offer Shares.

Potential influence of Crown Ocean Capital following Admission

Pursuant to the Underwriting Agreement by which Crown Ocean Capital has committed to take up its own maximum Open Offer Entitlement and has further agreed to subscribe for or purchase any Underwritten Shares (as defined in paragraph 8 of Part I) not taken up by Qualifying Shareholders under the Open Offer. On Admission, Crown Ocean Capital could hold up to 1,659,385,200 Ordinary Shares, representing 87.99 per cent. Of the Enlarged Voting Share Capital in the event of it subscribing for all of the Open Offer Shares. Investors may negatively perceive this level and concentration of share ownership due to the influence that Crown Ocean Capital may resultantly exert, which may adversely affect the market value of the Ordinary Shares.

In the event that, on Admission, Crown Ocean Capital holds over 50 per cent. Of the voting rights in the Company, Rule 9 of the Takeover Code would cease to apply to any further acquisitions of Ordinary Shares made by Crown Ocean Capital with the effect that any such acquisitions would no longer oblige Crown Ocean Capital to make an offer under Rule 9 of the Takeover Code to purchase the remaining Ordinary Shares.

In addition, if Crown Ocean Capital, on Admission, holds more than 75 per cent. Of the voting rights in the Company it will be in a position to exert dominant control over the outcome of matters relating to the Company and, by exercise of its voting rights, would be in a position to block the passing of ordinary and special resolutions and procure the passing of ordinary and special resolutions of the Company. This includes the voting power to exercise significant influence over all matters requiring shareholder approval, including the appointment or removal of directors, the declaration of dividends, the approval to issue equity securities to raise capital, the approval of buybacks, the amendment or replacement of the Company's articles of association, whether to accept the terms of a takeover offer, a possible delisting of the Company, and all other matters to be determined by Shareholders. In exercising its voting rights, Crown Ocean Capital may be motivated by interests that are different from those of the Company or the Company's other Shareholders.

The control Crown Ocean Capital is able to exert may have the effect of making certain transactions difficult or impossible without the support of Crown Ocean Capital and may, for example, have the effect of delaying or preventing any financing or refinancing transactions proposed to be undertaken by the Company or an acquisition of the Company or other change in control of the Company.

Forward-looking statements

Certain statements contained in this document may constitute forward-looking statements. Forward-looking statements include statements concerning the plans, objectives, goals, strategies and future operations and performance of the Group and the assumptions underlying these forward-looking statements. The Group uses the words "anticipates", "estimates", "expects", "believes", "intends", "plans", "may", "will", "should", and any similar expressions to identify forward-looking statements. Any such forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Group or industry results, to be materially different from any future results, performance or achievements expressed or implied by any such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding present and future business strategies and the environment in which the Group will operate in the future. These forward- looking statements speak only as of the date of this document. The Group expressly disclaims any obligation or undertakings to release publicly any updates or revisions to any forward-looking statement contained herein, save as required to comply with any legal or regulatory obligations, to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All subsequent written or oral forward-looking statements attributable to the Group, or persons acting on behalf of the Group, are expressly qualified in their entirety by the cautionary statements contained throughout this document. As a result of these risks, uncertainties and assumptions, a prospective investor should not place undue reliance on these forward-looking statements.

APPENDIX II - EXPECTED TIMETABLE OF PRINCIPAL EVENTS

APPENDIX III - KEY STATISTICS

Proposed Capital Reorganisation

1 This figure includes the 11,913,609 Existing Ordinary Shares held in treasury.

2 Following the Capital Reorganisation, there will be 11,913,609 New Ordinary Shares and 11,913,609 Deferred Shares held in treasury, which are included within these figures.

Open Offer

(3) The Enlarged Share Capital includes the 11,913,609 New Ordinary Shares which will be held in treasury following the Capital Reorganisation.

APPENDIX IV - DEFINITIONS

The following definitions apply throughout this document unless the context otherwise requires: