FT.com / Companies / Oil & Gas - Africa discovery boosts Bowleven

FT.com / Companies / Oil & Gas - Africa discovery boosts Bowleven



Africa discovery boosts Bowleven

By Christopher Thompson
Published: November 9 2010 23:06 | Last updated: November 9 2010 23:06
Shares in Bowleven, the oil exploration company active in west and central Africa, rose by more than a third following an oil and gas discovery in Cameroon.

Bowleven shares rose 34.7 per cent, or 69.2p, to 268.7p, on Tuesday after the group announced two prospective discoveries at its offshore Sapele well.

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The first, Deeper Omicron, is estimated to hold 190m barrels of oil, and Lower Omicron to hold 140m barrels of oil equivalent, according to the company’s median estimate range.

Kevin Hart, Bowleven’s chief executive, said appraisal drilling would soon commence to obtain proven reserve figures.

“[Whilst drilling] we’ve had five bites of the cherry in one well and two of those have yielded hydrocarbon discoveries – one oil and one gas. Both of them are right on the edge of the prospect and we will do immediate appraisal work.”

The discovery will provide succour to management who last year raised $114m through a share placement – nearly doubling the number in issue – to fund a drilling programme in offshore Cameroon. That was after Bowleven, which has yet to make a profit from its oil and gas operations, was in talks with PTT E&P, Thailand’s state oil company, which was interested in a takeover.

Phil Corbett, an analyst at RBS, said the Cameroon discovery was “potentially transformative”.

“There is serious upside in their position and this could be the result that wakes the market up to that. There are clearly a lot of hydrocarbons in the area. It’s a question of putting the jigsaw together to know where they’re trapped for commercial discoveries – I think they may have done that with these Omicron discoveries.”

In June, Bowleven sold a 25 per cent stake in its other Cameroon offshore field, Etinde – an estimated 215m barrel field – to commodity traders Vitol, in return for $100m to be used to bring it into production.