Join our community of smart investors

Bowleven announces review

The future shape of the Africa-focused oil and gas company is now subject to a strategic review
March 28, 2017

Bowleven's (BLVN) half-year results reflect a company in a state of flux. The financials, predictably, are unremarkable, save for a wide disparity in comparable earnings due to a $133m (£106m) impairment on intangible assets the previous year.

IC TIP: Hold at 35.5p

What matters is that the future shape of the Africa-focused oil and gas company is now on the line. Following pressure from principal shareholder Crown Ocean Capital (COC), a Monaco-based investment fund, Bowleven's board - or what's left of it - is considering all the options, including those put forward by the activist shareholder, as part of a strategic review.

The investment fund has accused management of mishandlingits African oil assets, leading to a decimation of the share price since mid-way through 2011. The campaign has already seen five directors voted off the board and two appointed earlier this month, although Bowleven's chairman, Billy Allan, has as yet avoided the carnage.

Given the company's "secure financial position", the board sees no reason to "undertake a fire sale", so hopefully the focus will fall on the underlying value of Bowleven's stake in the Etinde permit off the coast of Cameroon. COC also wants to cease investment in the company's smaller Bomono project, the subject of a successful farm-out agreement conducted earlier this month.

Barclays gives a tangible net asset value of 34p a share, from 35p a year earlier.

BOWLEVEN (BLVN)
ORD PRICE:35.5pMARKET VALUE:£114m
TOUCH:35-35.75p12-MONTH HIGH:38pLOW: 19p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:111¢*NET CASH:$95m

Half-yearto 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
2015nil-132-41.0nil
2016nil3.41.0nil
% change----

Ex-div:-

Payment:-

£1 = $1.26

*Includes intangible assets of $217m, or 68¢ a share.