Bowleven Gets Exploratin Extension at Etinde Permit

- Bowleven Gets Exploratin Extension at Etinde Permit

Friday, July 08, 2011
BowLeven plc

Bowleven announced the following update on activities on the Etinde Permit, offshore Cameroon.

Highlights

• One year extension to Etinde PSC exploration phase
• Cameroon LNG project progressing; gas sales term sheet signed by Etinde joint venture and SNH/GDF Suez
• Sapele-2 testing program ongoing; update now expected in around two weeks

Etinde PSC Extension

In accordance with the provisions of the Etinde PSC, Ministerial approval has been received from the Government of Cameroon for a one year extension to the exploration phase of the Etinde PSC (to December 21, 2012). The Etinde Permit comprises blocks MLHP-5, 6 and 7 and planning for continuing exploration and appraisal activities during 2012 across the Etinde Permit is already underway.

Cameroon LNG

The GDF Suez and SNH initiative to advance the monetization of the substantial undeveloped gas resource within Cameroon via an in-country gas aggregation scheme to supply an LNG facility is progressing. On June 30, 2011, GDF Suez, SNH and the Etinde joint venture signed a term sheet that includes the principles intended to govern the sale and purchase of gas to the proposed LNG facility.

Sapele-2 testing program

The Sapele-2 well was drilled to appraise both the Lower and Deep Omicron discoveries and a testing program is ongoing. Mechanical difficulties, which have now been resolved, were encountered during testing activities and consequently results are now expected in around two weeks.

Kevin Hart, Chief Executive of Bowleven, commented, "We are delighted with progress made in securing an exploration extension for Etinde and in agreeing outline terms for the sale of gas to the proposed Cameroon LNG facility. The Etinde PSC extension allows us to maintain momentum in pursuing our dual strategy of targeting high impact exploration in Cameroon whilst also focusing on converting resources to reserves. We eagerly await the test results from Deep and Lower Omicron at Sapele-2."

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Bowleven Agrees to Option Agreement Extension for Etinde Permit

Bowleven Agrees to Option Agreement Extension for Etinde Permit

Friday, April 01, 2011

BowLeven plc

Bowleven has agreed an extension to the option agreement with Vitol E&P Limited (Vitol) in respect of the Etinde Permit (Etinde) in exchange for Vitol agreeing to fund 50 percent of a planned high specification seismic program over the IE and IF fields.

Under the agreement, Vitol retains the option to acquire an additional 10 percent beneficial interest in block MLHP-7, Etinde, in return for funding an agreed $50 million gross appraisal work program. The option now expires on the earlier of (i) 1 month following delivery of the finalized dataset acquired under a planned 3D Four Component Ocean Bottom Cable (4C OBC) seismic program over IE and IF and (ii) 31 March 2012, subject to the continuation of the exploration phase of the Etinde PSC. The option arrangement excludes blocks MLHP-5 and MLHP-6, Etinde, where the Sapele-1ST and Sapele-2 appraisal wells are currently being drilled. Bowleven will retain operatorship of all three blocks.

Bowleven and Vitol currently have participating interests of 75 percent and 25 percent respectively in the Etinde Permit. However, as part of the agreement for the revised option exercise period, Vitol will fund 50 percent of the planned 4C OBC seismic program. Data acquisition is expected to commence in April 2011, subject to contract finalization and SNH approval.

The opportunity for the 4C OBC survey has arisen due to an in-country seismic crew becoming available at short notice. This will enable the joint venture to acquire high specification seismic over IE and IF in a fast timescale and on economically attractive terms.

The data is expected to provide enhanced imaging, with significant additional upfront benefits in planning appraisal activities and the possible facilitation of a fast track development on block MLHP-7. Final processed volumes are expected to be delivered Q3/Q4 2011.

The new option arrangement with Vitol also recognizes the requirement for further technical work to be completed prior to programming firm future appraisal and development activity for the IE and IF field areas. In this regard, work is continuing to integrate the results of the IE-3 appraisal well, including developing a dynamic reservoir model over IE, and in evaluating the 3D seismic acquired over the IF field area during 2010. Vitol have been actively involved in these joint venture activities.

With the exception of the agreed 50:50 sharing of the 4C OBC costs, each party continues to fund activities on the Permit in accordance with its participating interest. In the event of option exercise, Bowleven's beneficial interest in block MLHP-7 would be 65 percent with effect from the date of exercise, with its beneficial interest in blocks MLHP-5 and MLHP-6 remaining at 75 percent. All interests are expressed prior to the exercise of any state back-in rights.

Kevin Hart, Chief Executive of Bowleven commented, "This is an excellent opportunity to acquire high quality seismic as we progress towards our objective of converting resources to reserves. The new 4C OBC seismic over the IE and IF fields at this stage will augment ongoing appraisal activities and potentially assist a fast track development on the block."