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Lukoil extends reach in West Africa with Bowleven farmout

24th June 2014

Bowleven has announced that it has delivered its strategic intent to sell part of its interest in the Etinde permit, offshore Cameroon, by entering into a conditional agreement with Lukoil and NewAge

Lukoil extends reach in West Africa with Bowleven farmout
Bowleven will retain a 25 per cent interest in Etinde, ensuring continued exposure to the considerable resource and future development potential of the acreage

Bowleven will reduce its interest in the Etinde permit from 75 per cent to 25 per cent and receive aggregate consideration of approximately USD 250m (subject to final working capital adjustment).

Lukoil will acquire a 37.5 per cent interest and NewAge will acquire an additional 12.5 per cent interest in the Etinde permit to increase its group holding from 25 per cent to 37.5 per cent.

Camop (a wholly-owned subsidiary of NewAge) will become operator of the block following completion, allowing Bowleven to focus on its proven exploration skillset.

Bowleven will retain a 25 per cent interest in Etinde, ensuring continued exposure to the considerable resource and future development potential of the acreage.

The two acquisitions are inter-conditional and the principal conditions precedent to completion of the transaction are normal regulatory approval by the Cameroon government and approval by Bowleven shareholders to be sought at a General Meeting.

“We are extremely proud of the substantial progress that we have made with Etinde in discovering resource and creating markets,” said Kevin Hart, Bowleven chief executive. “With the exploitation authorisation approved and nearing formal award, gas sales discussions well advanced, and significantly increased scope for expansion to additional gas off take solutions, in particular CLNG, we believe now is the right time to bring in a new partner and transfer operatorship.

I am delighted that Lukoil are joining us as a value-adding partner in Cameroon, alongside our existing co-venturer, NewAge. Lukoil are a major international integrated oil and gas group with extensive operating and marketing expertise globally and a track record of delivering world class oil and gas developments. The expanded joint venture will work together to realise the considerable potential of this world class asset.  

Bowleven’s strategy is to focus on our core strengths of exploration and appraisal and enable the conversion of resources to reserves, ensuring that we realise value for shareholders at the appropriate time. This transaction endorses the value of Etinde while allowing us on-going participation in its significant remaining potential.

Going forward, having transferred the operatorship of Etinde and significantly strengthened our balance sheet, we are well-positioned to both fund our share of Etinde’s ongoing appraisal and development programme and also to progress the potential of our exciting African exploration portfolio in Cameroon, Kenya and Zambia.”

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