UK-based, Africa-focused explorer Bowleven has agreed to sell a 50% stake in the Etinde Permit, offshore Cameroon, to LUKOIL and NewAge, for about US$250 million, under a conditional agreement.
LUKOIL is to acquire a 37.5% interest in the Etinde Permit. NewAge will acquire an additional 12.5% interest in Etinde, increasing its holding from 25% to 37.5%, and, on completion of the deal, its subsidiary Camop, will take over operatorship. Bowleven will retain 25% interest.
Bowleven’s current P50 net contingent resources for Etinde, which comprises blocks MLHP-5, MLHP-6 and MLHP-7, are 263MMboe. Initial development concepts have centered around a phased hub-and-spoke approach, with an onshore processing facility, linked to unmanned platforms/producing wells.
The IM field on block MLHP-7 is expected to deliver the first phase of liquids and associated gas production, targeted for 1H 2017, followed by integration of the MLHP-5 discoveries (Sapele), under a stage II development. Dry gas (70MMscf/d) from Etinde is due to feed a proposed fertiliser plant, with additional gas available for broader development opportunities, such as a GDF-led Cameroon LNG (CLNG) scheme.
Kevin Hart, Bowleven’s CEO, said: “With the Exploitation Authorization approved (late May 2014) and nearing formal award, gas sales discussions well advanced, and significantly increased scope for expansion to additional gas offtake solutions, in particular CLNG, we believe now is the right time to bring in a new partner and transfer operatorship.”
He said the move will allow Bowleven to focus on its core strengths of exploration and appraisal, across its portfolio in exploration portfolio in Cameroon, Kenya and Zambia, and enable the conversion of resources to reserves.
Appraisal will continue on the Intra Isongo reservoir interval, encountered with the IM-5 well, with funding from the $40 million drilling/testing carry considered sufficient for Bowleven’s share of the two appraisal wells.
The $250 million payment will comprise a $170 million cash payment at completion and $40 million staged deferred cash payment due at Etinde development project final investment decision and on completion of appraisal drilling; and $40 million (net) carry for two appraisal wells.
EurOil, a subsidiary of Bowleven, is currently the operator of the Etinde Permit. The Exploitation Authorization, expected to be formally awarded soon, will give development and exploitation rights over block MLHP-7 for an initial period of 20 years.
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