Bowleven Releases Interim Results

Tuesday, March 30, 2021

Bowleven, the Africa focused oil and gas, Exploration and Production Company with key interests in Cameroon, announced its unaudited interim results for the six months ended 31 December 2020.

HIGHLIGHTS

• The Operating Committee through its resolution dated 11 December 2020 has given the JV partners permission to negotiate a new Etinde Exclusive Exploitation Authorisation (‘EEA’ or ‘EEEA’). The current EEA will continue until replaced.
• Group cash balance at 31 December 2020 was circa $6.4 million with a further $2.1 million held in financial investments, with no debt and material financial commitments.
• Front End Engineering Design (‘FEED’) completed in January 2021 marking a very significant milestone in progressing Etinde towards FID and development approval.
• Ongoing market volatility caused by the COVID-19 global pandemic in 2020, and the associated fall in global oil prices, has continued to slow down and impact negatively on progressing Etinde development overall. This has particularly impacted various commercial and legal/regulatory approval negotiation processes. As a result, FID is likely to slip into 2022.
• The recent oil price recovery significantly helps project economics.
• The JV partners continue to place a high priority on maximising project NPV and minimising capital development costs as we conclude Etinde development and commercial options.

Operational

Etinde

• In December 2020 the Operating Committee gave the JV partners permission to apply for and negotiate a replacement EEA. The current licence continues to be in force until replaced. The new agreement would reflect a change in the development plan, focussing on the Cameroon gas thermal power generation sector as the base level use of Etinde gas.
• During 2020, the JV partners completed:

o FEED on the development facilities and associated pipeline infrastructure combined with Health, Safety, Security and Environment (‘HSSE’), pipeline route surveys, reservoir risk analysis and mitigation and the preparation of the initial sub-surface drilling plan

o FEED builds on previously completed extensive pre-FEED studies undertaken in 2019

o Reprocessed the Seismic data for the entire licence area.

• The JV partners have also undertaken to continue commercial activities focused around a liquids-based development alongside discussion of sales terms with potential gas, condensate and LPG off-takers.
• New Age and Bowleven jointly appointed Cofarco (a Paris based financial advisory business) as lead advisor in relation to raising debt finance to fund Etinde development.

Eli Chahin, Chief Executive Officer of Bowleven plc, said: “During 2020, we were pleased with the progress made towards achieving FID at Etinde. We have completed a significant number of the most important technical work streams and made strong progress on a number of other important project development related work streams. Certain hurdles persist, predominantly around agreeing the many commercial aspects of the development with SNH, the Government of Cameroon and other interested parties. The principal outstanding requirements to achieving FID are now almost entirely commercial and regulatory approvals relating to the development concept we will propose.

“Currently, the facilities development cost, relative to the production levels we can achieve due to commercial and regulatory approval issues relating to the sale or utilisation of methane gas production, can be improved upon. Whilst the proposed ‘Base Case’ development concept tested by FEED provides a positive outcome, the economic value is lower than the minimum level the JV partners consider desirable. The JV Partners are confident that further discussions with the Government of Cameroon, represented by SNH, can progress to a stage whereby a development concept with significantly increased economics for all parties can be agreed upon.

“At a time of considerable market turbulence, we are fortunate to benefit from a robust financial position, with in excess of $8 million of cash and investments on the balance sheet and no debt. Coupled with our low-cost base, we remain well funded to reach FID, after which we will be in a position to receive the $25 million contingent consideration from the JV partners, instantly giving the Company a significant cash injection.

“Although the ongoing macro-economic conditions seen in 2020 and beyond have negatively impacted the timing of the Etinde project, we welcome the recent oil price strength and we continue to work towards achieving FID as quickly as possible. We look forward to keeping all of our stakeholders appraised on progress over the coming months.”

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