Bowleven has suffered a dose of the blues since being dumped by potential suitor, Dragon Oil - but upgrading volume estimates and an imminent deal to start monetising its assets offshore of Cameroon, holds promise. With results in from Sapele-3 - drilled late last year in the Douala basin – the oil-in-place estimate jumps to 615m barrels (mmbbls) from 171mmbbls, and gas triples to 1.5 trillion cubic feet (equivalent to about 268mmbls). Yet the shares trade well below brokers' net asset value (NAV) estimates.
The group looks to have found a buyer for the gas, too. Germany's Ferrostaal and state oil company SNH are building a fertiliser plant and are close to signing a 10-year supply deal. Expect first delivery in 2015, with similar contracts set to follow. This year's fully-funded drilling programme also looks promising. Up to four appraisal wells are planned for the Etinde permit, kicking off with IM-5 on block MLHP-7. Applications to safeguard assets and convert discoveries to development licences will be made soon, with final approval likely by early 2013. Meanwhile, a first exploration well at onshore permit Bomono is earmarked for the second half and farmout talks are ongoing. Bowleven is also close to offloading its EOV permit in Gabon for $40m (25m), mostly in cash.
BOWLEVEN (BLVN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 101p | MARKET VALUE: | £297m | |
| TOUCH: | 100-101p | 12-MONTH HIGH: | 387p | Low: 59p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 198¢* | NET CASH: | $124m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | nil | -15.7 | -8.00 | nil |
| 2011 | nil | -5.50 | -2.00 | nil |
| % change | - | - | - | - |
*Includes intangible assets of $413m, or 140¢ a share £1=$1.59 | ||||
