Bowleven, the Africa focused oil and gas, Exploration and Production Company with key interests in Cameroon, announces its unaudited interim results for the six months ended 31 December 2021.
· The JV partners concluded in December 2021 that the development option of exporting gas to Equatorial Guinea ('EG') was the preferred choice in terms of value, risks and benefits to Cameroon and each individual joint venture ('JV') member.
· An operating committee meeting ('OCM') was held in mid-January 2022 where New Age as Operator, presented a technical, risk and financial evaluation of a wide range of potential development options to SNH in support of the JV partners' conclusion.
· SNH agreed to study the JV partners' recommendation and report back with their own consideration of the option alongside their proposal for the next steps as soon as possible. The recent Ukraine crisis has impacted the ability to coordinate efforts amongst all the JV members and we envisage a period of normalization will resume in due course to facilitate this effort.
· Whilst one of our JV partners, Lukoil PJSC, has been impacted by the recent imposition of Russian sanctions, their participation in the Etinde PSC is as a non-operating minority partner. Notwithstanding being a private sector concern, we are as yet uncertain of how the Ukrainian conflict will impact the timeframe for obtaining final investment decision ('FID') for the project.
· At this stage, we remain satisfied that the JV partners could be able to reach a final investment decision during 2022 however, we also recognise that the outstanding commercial and political issues are not within Bowleven's or our JV partners' control and may therefore in practice require further time to negotiate and receive the relevant approvals to reach FID.
· The loss for the 6-month period was $1.2 million compared to $0.9 million for the same period in the prior year. The increased loss is primarily due to lower interest income.
· Group cash balance at 31 December 2021 was circa $2.5 million with a further $2.5 million held in a financial investment, with no debt or material financial commitments.
· The Group invested a further $0.3 million to fund its share of Etinde pre-development and geological and FEED related project expenditure in the 6-month period.
· Bowleven considers the total value of cash and investment of $5.0 million to be sufficient to meet the Group's financial requirements for at least the next 12 months based on the cash flow forecasts for the period up to 31 December 2023 which consider a number of different scenarios. Further details of the Directors' going concern considerations are provided in Note 2 of these interim financial statements.
· As the timing of progress towards FID is not within the control of the Group, should the commercial and regulatory issues not be resolved as anticipated in our modelling, it is likely that Bowleven would need to raise additional short-term funding to bridge expenditure to FID.
Eli Chahin, Chief Executive Officer of Bowleven plc, said:
"The Group made significant progress in 2021 as the Etinde JV members concluded on a realistic and economically beneficial way to progress Etinde's development. We continue to monitor the ongoing stakeholder negotiations regarding progressing the Etinde FID within 2022. The recent Ukrainian crisis has adversely impacted the pace of the new chapter in the Etinde development, however we remain optimistic that all the JV members are aligned to bring to fruition the more economic Etinde development option.
A significant amount of detailed technical knowledge has been developed meanwhile and we remain poised to develop the project funding for the asset in light of improving input variables given the current oil and gas price outlook. The Etinde asset is of significant importance to the Government of Cameroon, and we are keen to unlock its value for both the country and our shareholders.
We look forward to keeping our shareholders abreast of the anticipated developments over the coming months."