Bowleven Positive About Cameroon Well Prospects

Bowleven, the Edinburgh-based oil and gas explorer, has said its African acreage is closer to development after positive results from its first appraisal well offshore Cameroon.

The shares, which have risen sharply since May on hopes for the drilling programme, fell 5p to 177p despite chief executive Kevin Hart’s upbeat verdict that “the test results have increased the overall likelihood of a commercial development” on the Etinde Permit.

The technical report on the IE-3 appraisal well, in a field first drilled two years ago, says both oil and gas were found at the deeper levels of the strata, and that the oil discovered had highlighted the additional potential of the field and its surrounding acreage.

The report said: “The multiple additional deeper oil and gas-bearing reservoirs identified require further evaluation but are very encouraging from the perspective of an overall commercial development of the area. The discovery of more oil in the north of our Etinde acreage is very positive.”

Hart said the results were “an exciting start to our multi-well drilling campaign on Etinde”.

He added: “In many respects it is a big positive. The well has more than surpassed expectations. We are moving on from here, having hopefully ticked the box.”

The drilling rig would now move to the “high-impact” exploration well Sapele-1, to further evaluate the exploration potential of the Douala Basin, where Bowleven is hopeful of emulating Tullow Oil’s find in Ghana in apparently similar terrain.

“It has all the same features,” Hart commented. “If this one were to be successful it would not just transform Bowleven but Cameroon as well.” Drilling would start in about 10 days’ time and last 60 to 70 days.

In a farm-out deal that was announced in August 2009 but not completed until June 2010, Dutch trader Vitol agreed to fund an initial $100m drilling programme in exchange for a 25% stake in the licence, with the option to double both the funding and the stake.

That option runs out in September, before the Sapele-1 results are known. Hart said: “Hopefully there will be sufficient information for them to be positive.”