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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bowleven Plc | LSE:BLVN | London | Ordinary Share | GB00B04PYL99 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.02 | -9.09% | 0.20 | 0.15 | 0.25 | 0.224 | 0.187 | 0.20 | 10,001 | 08:00:20 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Oil And Gas Field Expl Svcs | 0 | -2.02M | -0.0062 | -0.32 | 654.93k |
From Apr 2019 to Apr 2024
TIDMBLVN
RNS Number : 4588T
BowLeven Plc
30 March 2016
30 March 2016
Bowleven plc ('Bowleven' or 'the Company')
Interim Results Announcement
Bowleven, the Africa focused oil and gas exploration group traded on AIM, today announces its interim results for the six months ended 31 December 2015.
HIGHLIGHTS
Operational
Bomono
-- Moambe and Zingana extended well tests completed and wells now suspended pending ongoing evaluation.
-- Bomono Exploitation Authorisation Application (BEAA) submitted to the Cameroon authorities based on an initial in-situ small scale gas to power development.
-- Discussions commenced with potential gas offtakers and MOU entered into with ENEO.
Etinde
-- Two appraisal well locations agreed with our partners targeting combined additional in-place volumes of approximately 1 to 2 tcf of gas and associated liquids.
-- Well design and planning underway with tendering anticipated in 2016 to exploit low cost/high rig availability operating environment.
-- Ongoing operator evaluation of development options based on LNG, power and fertiliser gas offtake solutions.
-- Operator-led discussions ongoing with Government on the potential to advance the Etinde development through an offshore processing facility.
Other
-- Rationalisation of portfolio in current environment to align with strategy. -- Focus on near-term production and infrastructure-led exploration.
Corporate
-- Group cash balance at 29 March 2016 circa $100 million; no debt. No outstanding work programme commitments.
-- Under Etinde transaction a further $15 million cash receivable at end September 2016 with access to a $40 million (net) carry for two appraisal wells, including testing.
-- $133 million impairment following prolonged market downturn; reflects revised commodity price ($65 per bbl) and planning assumptions on existing asset portfolio.
-- Intensive screening of multiple new venture investment opportunities is continuing; capital disciplined approach maintained.
OUTLOOK
Key objectives for the next 12 months include:
-- Working with the Etinde joint venture partners to enable earliest appraisal drilling and testing, together with the evaluation of additional offtake solutions and the progression of Etinde development planning.
-- Securing the Exploitation Authorisation (EA) for Bomono to enable progression towards early development.
-- Advance development planning, gas sales discussions and acreage evaluation on Bomono post drilling and testing activity.
-- Active screening of new ventures opportunities to augment the Group's existing asset base and build sustainability through entry into producing or near-term producing assets and infrastructure-led exploration.
-- Protect balance sheet strength by maintaining a disciplined approach to the consideration of further investment opportunities.
Kevin Hart, Chief Executive Officer of Bowleven Plc, said:
"We have continued to make steady progress towards our objective of converting resources to reserves in Cameroon. An Exploitation Authorisation Application was submitted to the Cameroon Authorities to enable development progression following the completion of drilling and testing activities at Bomono and meanwhile planning and evaluation work is continuing.
On Etinde, appraisal drilling and advancing development plans remain the focus under the operator, NewAge. With planning underway and tendering expected to follow, the joint venture is ideally placed to exploit the current environment of reduced costs and higher rig availability, with appraisal drilling expected to commence in 2017. Bowleven is covered for its share of drilling/testing on the two wells via the $40 million net carry from the Etinde farm-out transaction and will receive a further $15 million in cash in September 2016.
The macro-economic environment of prolonged lower oil prices has had sector-wide repercussions. The Group's strong balance sheet of circa $100 million in cash and no debt or outstanding work programme commitments means it is well positioned to manage the challenges faced by the industry and to exploit opportunities as they arise. As the downturn persists the number of potential opportunities is increasing. Whilst the evaluation of such opportunities is time-consuming, we continue to exert a rigorous screening approach when assessing potential value-creating transactions for shareholders whilst ensuring that our key differentiating feature of balance sheet strength is maintained.
We are optimistic that portfolio enhancing transactions can be identified and delivered alongside the progression of our existing asset base and look forward to making further progress in the coming year."
ENQUIRIES
For further information please contact:
Bowleven plc
Kevin Hart, Chief Executive 00 44 131 524 5678
Kerry Crawford, Finance Director
Brunswick Group LLP
Patrick Handley 00 44 207 404 5959
Simon Maine
Macquarie Capital (Europe) Limited (Nomad)
Jon Fitzpatrick 00 44 203 037 2000
Ken Fleming
Nick Stamp
The Interim Results presentation and a copy of this announcement are available on the Bowleven website www.bowleven.com
This announcement may include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions, beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies of the Company and its direct and indirect subsidiaries (the "Group") and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, may differ materially from those suggested by the forward-looking statements contained in the announcement. In addition, even if the Group's results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, are consistent with the forward-looking statements contained in the announcement, those results or developments may not be indicative of results or developments in subsequent periods. In light of those risks, uncertainties and assumptions, the events described in the forward-looking statements in the announcement may not occur. Other than in accordance with the Company's obligations under the AIM Rules for Companies, the Company undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in the announcement.
Notes to Editors:
Bowleven is an African focused oil and gas exploration group, based in Edinburgh and traded on AIM. Bowleven's vision is to build an African focused exploration and production company focused on creating and realising material value through exploration-led organic growth and niche acquisitions. Bowleven holds equity interests in three blocks in Cameroon, with one block located offshore in shallow water (operated by NewAge) and two onshore (operated by Bowleven).
Notes to Announcement:
1. The technical information in this release has been reviewed by Ed Willett and David Clarkson, both qualified persons for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Ed Willett, Exploration Director of Bowleven plc, is a geologist and geophysicist, a Fellow of the Geological Society (FGS) and a member of the Petroleum Exploration Society of Great Britain (PESGB) with extensive experience across a wide variety of petroleum provinces. David Clarkson, Chief Operating Officer of Bowleven plc, is a Chartered Engineer and Fellow of the Institution of Mechanical Engineers with extensive oil and gas industry experience.
2. The information in this release reflects the views and opinions of Bowleven and has not been reviewed in advance by its joint venture partners.
CHAIRMAN'S AND CHIEF EXECUTIVE'S REVIEW
The last eighteen months have seen an extreme decline in world oil prices as increasing supply, driven to a large extent by the dramatic and rapid increase in US shale oil production, has outstripped demand. As a direct consequence, the upstream industry has experienced an almost unprecedented deterioration in the investment climate resulting in many companies substantially cutting administration costs and planned capital expenditure. In many instances these actions reflect not just a need to adjust to a lower price environment, but are borne out of a real and ongoing fight for survival.
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
The resultant job losses and the withdrawal of both human and financial capital from the sector have combined to create an extremely challenging backdrop against which companies are being forced to rapidly evolve in order to have any chance of offering acceptable returns to investors. The resulting business climate is exceedingly dynamic with the impacts on individual companies varying significantly, leading to the potential for significant partner and stakeholder misalignment.
As a consequence of the completion of the farm-out of two-thirds of Etinde to LUKOIL and NewAge approximately 12 months ago, for a total aggregate consideration of $250 million, Bowleven is well positioned in the current market to endure the challenges faced and to focus on realising the value of its existing asset base, supported by a healthy balance sheet with no debt constraints or refinancing issues as a distraction. However, we are not immune to these testing market conditions which are impacting the decision making processes of our partners and host Governments. The lower oil price also puts real pressure on domestic gas prices, as whilst the environmental arguments are stronger than ever, the financial arguments for substitution of gas for oil are far less persuasive than in a $100 universe. Given the current macro-environment we have reduced our long-term oil price assumption used in assessing the carrying value of the Group's intangible assets to $65/bbl. Consequently, as is now prevalent within the industry, an impairment charge has been recognised in the financial statements.
Against this difficult backdrop, we continue to focus on our primary objectives of:
1. Working with our Etinde partners to convert our existing resources into reserves and also targeting potentially substantial volume additions through further appraisal drilling.
2. Continuing evaluation of our existing discoveries and further prospective resources on Bomono in order to expediently realise a commercial development and achieve first production and cash flow.
3. Evaluating opportunities to augment the Group's existing asset base.
In addition, alongside these challenging conditions, the Group continues to exert capital discipline and to pursue G&A cost reduction initiatives.
Consistent with this, our forthcoming activities encompass:
Etinde Development and Appraisal Drilling
The current approved 2016 joint venture budget includes expenditure for the drilling of two appraisal wells at the previously agreed locations. The continued downturn and the worsening industry economic outlook in Q1 2016 has seen a revision in available joint venture capital and as a consequence drilling is now expected in 2017. Whilst a schedule slippage is disappointing as Bowleven is eager to drill the wells and under the farm-out terms with LUKOIL and New Age is carried for up to $40 million net to its share of the appraisal drilling and testing costs, the upside potential to be targeted by the wells remains.
The appraisal locations previously identified have the potential to add significant resources within the Intra and greater Intra Isongo formations, with the combined additional targeted un-risked P90 in place volumes being 1 to 2 tcf of gas and associated liquids.
The Operator, NewAge, is seeking to optimise a schedule which delivers the appraisal wells and a potential early production scheme through an offshore processing facility. It is currently anticipated that drilling preparations including tendering will continue to be progressed in 2016 so as to exploit the low cost and high rig availability operating environment created by the oil price downturn, with drilling expected in 2017. Meanwhile on development plans, discussions are ongoing with partners and Government officials regarding the potential advancement of an initial development of the existing discovered resources which are sufficient to support either a standalone fertiliser, power generation or BLNG project gas offtake solution. The combination of high well deliverability, a reduced cost environment and attractive fiscal terms means that project economics remain robust even at depressed oil prices.
Bomono Forward Activity
With drilling and testing now complete at Moambe and Zingana, attention is now focused on how best to move towards development. The Bomono Exploitation Authorisation Application ("BEAA") was submitted to the Ministry of Mines on 11 December 2015 and we are in regular dialogue providing any clarifications requested pending award. The application envisages a small scale gas-to-power development starting with the two existing wells with a view to expanding ultimately to a larger scheme, provided further drilling of the acreage proves up the requisite volumes.
A full inventory of the existing contingent and prospective resources is being compiled post completion of drilling and testing activities.
In addition, development planning work is progressing and discussions are also ongoing with ENEO under the existing MOU concerning the possible sale of gas.
Kenya and Zambia
In part as a consequence of the fall in world oil prices, a portfolio rationalisation has been instigated, to ensure continuing alignment with Group strategy. Consequently, a detailed review of the technical and commercial potential of our non-core interests in Kenya and Zambia is being undertaken to determine the Group's forward plans in these countries. As a consequence, Bowleven does not intend to pursue its application in Zambia.
To date Bowleven has been carried for the majority of its work programme in Kenya, on which the first phase of the PSC is set to come to an end in May 2016, and minimal expenditure has been undertaken on Zambia.
New Ventures
We continue to work hard at screening new venture opportunities with a view to adding to the Group's existing asset base, in line with the Group's strategy. This includes focus on near-term production and infrastructure-led exploration opportunities. This is a very time consuming activity which requires a substantial degree of rigour and discipline. If and when a deal is concluded it is essential that we do not prejudice the strength of our balance sheet or our ability to see out the current downturn.
OPERATIONS
Etinde Exploitation, Offshore Cameroon (20% equity interest)
The Etinde farm-out transaction completed around a year ago, following which operatorship transferred to NewAge, supported by an expanded joint venture including LUKOIL.
From a development perspective, the number of competing users for gas in Cameroon is expanding and includes fertiliser, power and LNG projects. Whilst at present there is sufficient gas to meet the demands from one of these offtake solutions it is hoped that the planned drilling campaign will discover additional volumes which are sufficient to enable multiple development solutions. A key focus area for Etinde is therefore on getting the two appraisal wells targeting the Intra Isongo drilled so that any additional hydrocarbon volumes available for development can be determined. Bowleven is covered for its expected share of the drilling/testing of these two wells via a $40 million (net) carry secured under the farm-out agreement.
The prevailing market conditions however are proving challenging. Whilst a prolonged period of low oil prices can be beneficial in achieving cost reductions for planned joint venture expenditure, there are also opposing influences as partners seek to significantly reduce near term expenditure plans to preserve capital.
Although originally budgeted for 2016, some slippage is anticipated in the appraisal drilling schedule. The Operator, NewAge, is preparing a revised plan and it is expected that drilling preparations will be progressed during 2016 to take advantage of the lower cost operating environment, with drilling expected in 2017. Well design and planning is underway with tendering, including rig, in preparation for drilling expected to follow.
Bomono, Onshore Cameroon (100% equity interest)
The Zingana well was the first of the two wells in the 2015 exploration programme, and was drilled to 1,720 metres measured depth (MD). The second well, Moambe, was drilled to 1,769 metres measured depth (MD). The subsequent extended well testing programme carried out at Moambe and Zingana was completed in January 2016 with initial results indicating a potential supply of around 5 to 6 mmscfd of gas to a small in-situ gas to power development.
Linked to development planning and with a near-term focus on the shallower reservoirs, Bowleven is evaluating the acreage potential of both the shallower and deeper reservoirs. Consequently, the technical team are in the process of compiling a full inventory of existing contingent and prospective resources on Bomono post drilling and testing activities.
Also related to development planning, discussions are continuing with ENEO under the existing MOU regarding the possible sale of gas for local power generation.
As previously advised, operations were impacted by the non-performance of contractors during the preparation and operational phases of the drilling/testing programme and remedial action is being progressed.
The Bomono Exploitation Authorisation Application (BEAA) was submitted to the Cameroon authorities in December 2015 as planned, prior to the expiry of the exploration phase of the licence on 12 December 2015, to enable commencement of the development phase. The Company is liaising with the Cameroon authorities regarding the progression of the BEAA. As with Etinde, the authority to award the Exploitation Authorisation (EA) rests with the Minister of Mines. Alongside, SNH has expressed support for an extension to the exploration licence pending BEAA progression.
Volumetric Update
P50 net contingent resources are unchanged at 58 mmboe.
Net contingent resources do not currently include any contingent resource volumes for the Bomono Permit where an extended well testing programme at Zingana and Moambe was recently completed.
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
Volumetric updates are anticipated for both Bomono following completion of ongoing evaluation work post testing and also on Etinde post planned appraisal drilling activity.
Block 11B, Onshore Kenya (35% effective interest)
Bowleven holds a 35% effective interest in Kenya block 11B with Adamantine as operator. FTG was completed on block 11B by the end of 2013, with the acquisition of 2D seismic expected to follow. Logistical issues, including security concerns, delayed the commencement of this programme and the operator was unable to acquire the data prior to the expiry of the first licence phase (May 2015). A one-year extension was subsequently awarded by the Kenyan authorities to enable this acquisition and the Operator has initiated a re-tender process.
As disclosed at the year end, Bowleven (Kenya) Limited (owned by First Oil and Bowleven) was in dispute with the operator over continued title to the Bowleven (Kenya) interest. A subsequent ruling by the Court confirmed Bowleven's position that there was no legal basis for the action taken by Adamantine.
The joint venture has already met the financial obligations for the first phase of the licence. The acquisition of seismic would complete the work programme requirement pre entry into the second phase of the licence, which also includes a drilling and financial work programme commitment. Against this backdrop and considering the Group's strategy, Bowleven is evaluating forward plans on the asset pending the expiry of the first phase in May 2016.
Zambia
In June 2013, Bowleven submitted an application for acreage as part of a Zambian licensing round and was subsequently awarded three exploration blocks out of a five block application. Following a strategic review of our operations in this country the Group has decided not to progress the application and have notified the Zambian authorities accordingly.
FINANCE
The Group has reported a loss of $132.0 million (H1 2015: loss $81.0 million) for the six months ended 31 December 2015, which includes $133.5 million impairment charge recognised following a review of the Group's intangible exploration assets, in the context of the challenging macro-environment of prolonged lower global oil prices faced by the industry (H1 2015: $76.0 million impairment).
Against this market backdrop, the Group has revisited its key commodity price and planning assumptions used in assessing and calculating any impairment charge on intangible exploration assets (further detail provided in the notes to financials). This has resulted in an impairment charge of $60.7 million on Etinde and $61.0 million on Bomono. Based on an initial assessment, an impairment charge of $11.8 million has been made for Kenya block 11B pending conclusion on forward plans. The majority of the expenditure on block 11B was funded via an arrangement with First Oil.
The results for the period include administrative expenses of $4.8 million (H1 2015: $5.7 million). Finance income comprises mainly of $6.0 million foreign exchange gains arising from the recognition of foreign exchange differences under IFRS on US dollar cash balances (H1 2015: gain $0.6 million).
The Group's G&A charge has reduced to around $0.8 million from $1.0 million per month. Managing and reducing G&A costs continues to be a priority for the Group and further cost saving initiatives are being identified and implemented.
Capital expenditure cash flows during the period were $32.4 million (H1 2015: $16.3 million). This expenditure relates primarily to drilling and testing operations on the Bomono Permit. As previously highlighted, operations were impacted by contractor non-performance, both prior to and during the drilling programme. Consequently we are continuing to pursue service providers for the recovery of a proportion of additional expenditure incurred.
At 31 December 2015, Bowleven had $108.0 million of cash and no debt (H1 2015: $6.6 million and no debt).
Following the completion of the two exploration well commitments on Bomono, the Group has no outstanding work programme obligations.
As at 29 March 2016, the Group had circa $100 million cash and no debt. Under the terms of the Etinde farm-out transaction that completed in March 2015, Bowleven will receive a further $15 million in cash the earlier of September 2016 or completion of appraisal drilling. The Group also has access to a $40 million (net) drilling and testing carry which is expected to cover its share of two appraisal wells on Etinde. This deferred consideration ($55 million) is recognised as a current asset on the Group balance sheet at 31 December 2015. In addition, a further $25 million is receivable on achieving Etinde FID and is disclosed as a contingent asset pending further clarity around Etinde project sanction/FID.
With a significant cash balance, the deferred consideration structure from the Etinde farm-out, and no debt or outstanding work programme commitments, the Group is well placed to progress its strategic objectives of supporting its existing asset base, alongside the potential for new investment opportunities. The Group will continue to review all available financing options to achieve the optimum funding mix for its future exploration, appraisal and development activities.
BOARD CHANGES
As planned, following the Annual General Meeting (AGM) in December 2015 both Ronnie Hanna and Caroline Cook stepped down from the Board, each having served nine years on the Board as Chairman and Chairman of the Audit Committee respectively.
In accordance with succession plans, Non-Executive Directors William Allan and John Martin were consecutively appointed as Chairman of the Board and Audit Committee respectively.
Following these changes the Bowleven Board comprises eight members, four Executive Directors and four Non-Executive Directors.
OUTLOOK
Having a strong balance sheet does not mean we have room for complacency. The oil industry has always been dynamic and moves quickly to take advantage of opportunity as it arises and to adapt in times of uncertainty and volatility. It remains unclear how long oil and gas prices will continue to be adversely impacted by oversupply and weak demand. As the size of capital cut-backs worldwide continues to mount, opportunities are inevitably becoming available. We are confident that Bowleven can realise one or more of these for the benefit of shareholders. In tandem we will continue to progress our key objective of converting resources to reserves at both Bomono and Etinde in Cameroon.
William Allan, Non-Executive Chairman Kevin Hart, Chief Executive
30 March 2016
GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
Hot Features
Premium
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2015 2014 2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
================================== === ============= ============= ===========
Revenue - - -
---------------------------------- --- ------------- ------------- -----------
Administrative expenses (4,767) (5,737) (11,868)
--------------------------------------- ------------- ------------- -----------
Impairment (133,458) (75,959) (75,959)
--------------------------------------- ------------- ------------- -----------
Operating loss before
financing costs (138,225) (81,696) (87,827)
--------------------------------------- ------------- ------------- -----------
Finance income 6,192 681 188
--------------------------------------- ------------- ------------- -----------
Finance costs - - (2,380)
--------------------------------------- ------------- ------------- -----------
Loss from continuing operations
before taxation (132,033) (81,015) (90,019)
--------------------------------------- ------------- ------------- -----------
Taxation - -
---------------------------------- --- ------------- ------------- -----------
Loss for the Period from
Continuing Operations (132,033) (81,015) (90,019)
--------------------------------------- ------------- ------------- -----------
Loss attributable to:
---------------------------------- --- ------------- ------------- -----------
Owners of the parent undertaking (131,938) (80,970) (89,859)
--------------------------------------- ------------- ------------- -----------
Non-controlling interest (95) (45) (160)
--------------------------------------- ------------- ------------- -----------
Basic and diluted loss
per share ($/share) from
continuing operations (0.41) (0.25) (0.28)
--------------------------------------- ------------- ------------- -----------
GROUP STATEMENT OF COMPREHENSIVE INCOME
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
6 months 6 months
ended ended
31 December 31 December Year ended
2015 2014 30 June
(Unaudited) (Unaudited) 2015 (Audited)
$'000 $'000 $'000
================================== ======================== ============== ================
Loss for the period (132,033) (81,015) (90,019)
---------------------------------- ------------------------ -------------- ----------------
Other comprehensive income:
---------------------------------- ------------------------ -------------- ----------------
Items that will be reclassified
to profit and loss:
---------------------------------- ------------------------ -------------- ----------------
Currency translation differences (6,926) (1,947) 1,854
---------------------------------- ------------------------ -------------- ----------------
Total Comprehensive Income
for the Period (138,959) (82,962) (88,165)
---------------------------------- ------------------------ -------------- ----------------
Attributable to:
---------------------------------- ------------------------ -------------- ----------------
Owners of the parent undertaking (138,864) (82,917) (88,005)
---------------------------------- ------------------------ -------------- ----------------
Non-controlling interest (95) (45) (160)
---------------------------------- ------------------------ -------------- ----------------
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2015
As at
31
December
2015 As at
As
at 31
December 30 June
2014 2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
================================== === ============= ============== ============
Non-current Assets
---------------------------------- --- ------------- -------------- ------------
Intangible exploration assets 205,001 492,853 304,662
--------------------------------------- ------------- -------------- ------------
Property, plant and equipment 1,705 529 1,896
--------------------------------------- ------------- -------------- ------------
206,706 493,382 306,558
-------------------------------------- ------------- -------------- ------------
Current Assets
---------------------------------- --- ------------- -------------- ------------
Inventory 5,468 10,274 5,370
--------------------------------------- ------------- -------------- ------------
Trade and other receivables 6,178 7,946 6,431
--------------------------------------- ------------- -------------- ------------
Deferred consideration 54,851 - 54,977
--------------------------------------- ------------- -------------- ------------
Bank deposits 500 500 500
--------------------------------------- ------------- -------------- ------------
Cash and cash equivalents 107,502 6,132 144,751
--------------------------------------- ------------- -------------- ------------
174,499 24,852 212,029
-------------------------------------- ------------- -------------- ------------
Total Assets 381,205 518,234 518,587
--------------------------------------- ------------- -------------- ------------
Current Liabilities
---------------------------------- --- ------------- -------------- ------------
Trade and other payables (13,473) (9,146) (12,695)
--------------------------------------- ------------- -------------- ------------
Total Liabilities (13,473) (9,146) (12,695)
--------------------------------------- ------------- -------------- ------------
Net Assets 367,732 509,088 505,892
--------------------------------------- ------------- -------------- ------------
Equity
---------------------------------- --- ------------- -------------- ------------
Called-up share capital 55,505 55,060 55,060
--------------------------------------- ------------- -------------- ------------
Share Premium - 746,526 -
---------------------------------- --- ------------- -------------- ------------
Foreign exchange reserve (59,792) (56,667) (52,866)
--------------------------------------- ------------- -------------- ------------
Shares held by Employee
Benefit Trust (212) (457) (105)
--------------------------------------- ------------- -------------- ------------
Other reserves 14,867 14,345 15,414
--------------------------------------- ------------- -------------- ------------
Retained earnings/(deficit) 355,019 (251,996) 485,949
--------------------------------------- ------------- -------------- ------------
365,387 506,811 503,452
-------------------------------------- ------------- -------------- ------------
Attributable to:
---------------------------------- --- ------------- -------------- ------------
Owners of the parent undertaking 365,387 506,811 503,452
--------------------------------------- ------------- -------------- ------------
Non-controlling interest 2,345 2,277 2,440
--------------------------------------- ------------- -------------- ------------
Total Equity 367,732 509,088 505,892
--------------------------------------- ------------- -------------- ------------
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
6 months 6 months Year
ended ended ended
31 December 30
31 December 2014 June
2015 2015
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
========================================== ============= ============= ===========
Cash Flows from Operating Activities
------------------------------------------ ------------- ------------- -----------
Loss before tax (132,033) (81,015) (90,019)
------------------------------------------ ------------- ------------- -----------
Adjustments to reconcile Group
loss before tax to net cash used
in operating activities:
------------------------------------------ ------------- ------------- -----------
Depreciation of property, plant
and equipment 321 162 397
------------------------------------------ ------------- ------------- -----------
Impairment of intangible exploration
assets 133,458 75,959 75,959
------------------------------------------ ------------- ------------- -----------
Finance income (6,192) (681) (188)
------------------------------------------ ------------- ------------- -----------
Finance costs - - 2,380
------------------------------------------ ------------- ------------- -----------
Equity-settled share based payment
transactions 799 1,029 1,949
------------------------------------------ ------------- ------------- -----------
Gain on sale of property, plant
and equipment 22 - -
------------------------------------------ ------------- ------------- -----------
Adjusted loss before tax prior
to changes in working capital (3,625) (4,546) (9,522)
------------------------------------------ ------------- ------------- -----------
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
(Increase)/Decrease in inventory (98) 130 316 ------------------------------------------ ------------- ------------- ----------- (Increase)/Decrease in trade and other receivables (1,351) 130 (1,429) ------------------------------------------ ------------- ------------- ----------- Increase/(Decrease) in trade and other payables 520 (556) 604 ------------------------------------------ ------------- ------------- ----------- Exchange differences (775) (169) (407) ------------------------------------------ ------------- ------------- ----------- Net Cash used in Operating Activities (5,329) (5,011) (10,438) ------------------------------------------ ------------- ------------- ----------- Cash Flows (used in)/from Investing Activities ------------------------------------------ ------------- ------------- ----------- Proceeds from sale of intangible exploration assets - - 165,000 ------------------------------------------ ------------- ------------- ----------- Costs of sale of intangible exploration assets - - (9,395) ------------------------------------------ ------------- ------------- ----------- Net proceeds from sale of intangible exploration assets - - 155,605 ------------------------------------------ ------------- ------------- ----------- Receipts from working capital adjustment on sale of intangible exploration assets - - 5,083 ------------------------------------------ ------------- ------------- ----------- Purchases of property, plant and equipment (219) (32) (1,641) ------------------------------------------ ------------- ------------- ----------- Purchases of intangible exploration assets (32,157) (16,227) (33,500) ------------------------------------------ ------------- ------------- ----------- Release funds on bank deposit - 5,000 5,000 ------------------------------------------ ------------- ------------- ----------- Reclassification of funds to bank deposit - (500) (500) ------------------------------------------ ------------- ------------- ----------- Receipts from sale of property, plant and equipment 39 - - ------------------------------------------ ------------- ------------- ----------- Receipts from sale of inventory - - 193 ------------------------------------------ ------------- ------------- ----------- Interest received 135 52 139 ------------------------------------------ ------------- ------------- ----------- Net Cash (used in)/from Investing Activities (32,202) (11,707) 130,379 ------------------------------------------ ------------- ------------- ----------- Cash Flows from Financing Activities ------------------------------------------ ------------- ------------- ----------- Net proceeds from issue of ordinary shares 445 71 71 ------------------------------------------ ------------- ------------- ----------- Funding from non-controlling interest - 3,395 4,323 ------------------------------------------ ------------- ------------- ----------- Net Cash Flows from Financing Activities 445 3,466 4,394 ------------------------------------------ ------------- ------------- ----------- Net (Decrease)/Increase in Cash and Cash Equivalents (37,086) (13,252) 124,335 ------------------------------------------ ------------- ------------- ----------- Effect of exchange rates on cash and cash equivalents (163) (1,070) (38) ------------------------------------------ ------------- ------------- ----------- Cash and cash equivalents at the beginning of the period 144,751 20,454 20,454 ------------------------------------------ ------------- ------------- ----------- Cash and Cash Equivalents at the Period End 107,502 6,132 144,751 ------------------------------------------ ------------- ------------- -----------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
Shares Attributable
Equity Foreign Held to owners Non-
Share Exchange in Other Retained of parent controlling Total
Capital* Reserve Trust Reserves Deficit company interest Equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
================= ========== ========== ======= ========== =========== ============== ============= ==========
At 1 July 2014 801,515 (54,720) (489) 14,644 (174,730) 586,220 1,303 587,523
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Loss for the
period - - - - (80,970) (80,970) (45) (81,015)
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Other
comprehensive
income for
the period - (1,947) - - - (1,947) - (1,947)
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Total
comprehensive
income for
the period - (1,947) - - (80,970) (82,917) (45) (82,962)
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Proceeds from
issue of share
capital 71 - - - - 71 - 71
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Exchange on
transfer of
EBT - - 32 - - 32 32
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Share based
payments - - - 1,029 - 1,029 - 1,029
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Funding from
non-controlling
interest - - - - 2,376 2,376 1,019 3,395
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Transfer between
reserves - - - (1,328) 1,328 - - -
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
At 31 December
2014 801,586 (56,667) (457) 14,345 (251,996) 506,811 2,277 509,088
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Loss for the
period - - - - (8,889) (8,889) (115) (9,004)
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Other
comprehensive
income for
the period - 3,801 - - - 3,801 - 3,801
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Total
comprehensive
income for
the period - 3,801 - - (8,889) (5,088) (115) (5,203)
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Share based
payments - - - 920 - 920 - 920
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Funding from
non-controlling
interest - - - 650 650 278 928
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Shares purchased
by EBT - - (126) - - (126) - (126)
----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
Grant of
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March 30, 2016 02:00 ET (06:00 GMT)
warrants - - - 285 - 285 - 285 ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Transfer between reserves (746,526) - 478 (136) 746,184 - - - ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- At 30 June 2015 55,060 (52,866) (105) 15,414 485,949 503,452 2,440 505,892 ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Loss for the period - - - - (131,938) (131,938) (95) (132,033) ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Other comprehensive income for the period - (6,926) - - - (6,926) - (6,926) ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Total comprehensive income for the period - (6,926) - - (131,938) (138,864) (95) (138,959) ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Proceeds from issue of share capital 445 - - - - 445 - 445 ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Share based payments - - 799 - 799 - 799 ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Shares purchased by EBT - - (445) - - (445) - (445) ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- Transfer between reserves - - 338 (1,346) 1,008 - - - ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ---------- At 31 December 2015 55,505 (59,792) (212) 14,867 355,019 365,387 2,345 367,732 ----------------- ---------- ---------- ------- ---------- ----------- -------------- ------------- ----------
*Includes both share capital and share premium
NOTES TO THE INTERIM STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
1. Accounting Policies
Basis of Preparation
This Interim Report has been prepared on a basis consistent with the accounting policies applied to all the periods presented in these consolidated financial statements.
The disclosed figures are not statutory accounts in terms of section 435 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2015, on which the auditors gave an unqualified opinion and no statements under section 498 (2) or (3), have been filed with the Registrar of Companies.
2. Going Concern
After making enquiries, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis as the Directors are of the opinion that the Group has sufficient funds to meet their ongoing working capital and committed capital expenditure requirements. In making this assessment, the Directors considered the Group budgets, the cash flow forecasts and associated risks.
3. Intangible Exploration Assets/Impairment Loss
Exploration
and appraisal
expenditure
Group $'000
======================================== ===============
Cost
---------------------------------------- ---------------
At 1 July 2014 550,745
---------------------------------------- ---------------
Additions 18,067
---------------------------------------- ---------------
Impairment (75,959)
---------------------------------------- ---------------
At 31 December 2014 492,853
---------------------------------------- ---------------
Additions 22,414
---------------------------------------- ---------------
Net proceeds on disposal of intangible
exploration assets (210,605)
---------------------------------------- ---------------
At 30 June 2015 304,662
---------------------------------------- ---------------
Additions 33,797
---------------------------------------- ---------------
Impairment (133,458)
---------------------------------------- ---------------
At 31 December 2015 205,001
---------------------------------------- ---------------
Net book value
---------------------------------------- ---------------
At 31 December 2015 205,001
---------------------------------------- ---------------
At 30 June 2015 304,662
--------------------- --------
At 31 December 2014 492,853
--------------------- --------
In consideration of the current macro-economic environment and prevailing market conditions in the oil and gas industry which has resulted in a prolonged period of lower global oil prices, an impairment review of the carrying value of intangible exploration assets in the financial statements has been carried out.
In carrying out the impairment assessment of each asset, the recoverable amount of the asset is determined using a discounted cash flow model and is compared to the net book value of the intangible exploration asset in the financial statements.
Given the market downturn, the Group's long-term oil price assumption has been reduced to $65 per bbl from $80 per bbl (as disclosed in the Annual Report as at 30 June 2015). Similarly a gas price of $7/mmscf has been utilised for Bomono, gauged against local market pricing in the absence of a gas sales agreement for the asset at this juncture. The pre tax discount rate has been calculated based on the post tax rate of 10% (unchanged from prior reporting period). Each intangible asset detailed below is considered to be a single cash-generating unit.
As a result of this impairment review an impairment charge of $133.5 million has been recognised in the Income Statement (H1 2015: $76.0 million), the detail of which is provided below.
Etinde
The recoverable amount of the Etinde cash-generating unit calculated on the above basis is $168.4 million. As a result of the impairment review a charge of $60.7 million is recognised in the Income Statement.
The discounted cash flow model used to assess the Etinde recoverable amount represents a conservative case, and only considers an initial development supplying gas to the planned fertiliser plant excluding any potential additional resources and offtake solutions that may result from planned appraisal drilling, in particular that of the Intra Isongo formation which will be targeted by the two planned appraisal wells. Bowleven's estimated share of the drilling and testing of these wells is covered by a $40 million net carry provided under the Etinde farm-out transaction that completed in March 2015.
Bomono
The recoverable amount of the Bomono asset calculated on the basis detailed above is $36.6 million resulting in an impairment charge of $61.0 million in the Income Statement.
In December 2015 the Group submitted the Bomono Exploitation Authorisation Application (BEAA) to enable progression to the development phase post completion of drilling and testing activities (exploration licence expiry 12 December 2015). The Group is actively engaged with the Minister of Mines (who is responsible for granting EAs) providing clarifications requested pre award. As part of the ongoing process SNH have also indicated support of an exploration licence extension pending EAA progression.
The discounted cashflow model utilised is based on the EA submission and assumes a small initial in-situ gas-to-power development. Meanwhile, development planning work is continuing, discussions are progressing regarding the possible sale of gas and the team are in the process of evaluating the potential of both the shallower and deeper reservoirs encountered following the completion of drilling and testing activities in January 2016. A full inventory of existing contingent and prospective resources is currently being compiled.
Kenya block 11B
Kenya block 11B is the sole asset held in Bowleven Kenya (owned by Bowleven 70% and First Oil 30%). Exploration costs of $11.8 million have been incurred to date ($8.8 million of which was funded by First Oil). With two months remaining in the current phase of the licence and pending conclusion of forward plans on the block, the recoverable amount of the asset has been reduced to zero and a charge $11.8 million recognised in the Income Statement.
4. Other Notes
a) The basic earnings per ordinary share is calculated on a loss of $132,033,000 (H1 2014: loss of $81,015,000) on a weighted average of 324,491,784 (H1 2014: 324,302,272) ordinary shares.
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b) The loss attributable to ordinary shareholders and the number of ordinary shares for the purpose of calculating the diluted earnings per share are identical to those used for the basic earnings per share. The exercise of share options would have the effect of reducing the loss per share and consequently is not taken into account in the calculation for diluted loss per share.
c) No dividend has been declared (2014: nil).
5. Electronic Shareholder Communication
As per the prior year Interim Results and recognising increased automation in shareholder communications, the Group no longer produces hard copy Interim Reports. The Annual Report will also be distributed electronically unless shareholders specifically elect to receive a hard copy. Copies can be obtained from the Company on request.
6. Interim Report
This announcement represents the Interim Report and half yearly results of Bowleven plc. The announcement will be available to download from the Company website www.bowleven.com.
GLOSSARY
Actis Actis LLP. Actis is a private equity
firm investing exclusively in Africa,
Asia and Latin America. In 2014,
Actis acquired a 56% stake in Cameroon's
national electricity utility, Eneo
Adamantine Adamantine Energy (Kenya) Limited,
the current operator of, and holder
of a 50% participating interest
in block 11B
AGM annual general meeting
AIM the market of that name operated
by the London Stock Exchange
bbl barrel of oil
BLNG barge mounted LNG
block 11B the production sharing contract
between the Republic of Kenya, Adamantine
Energy (Kenya) Limited and Bowleven
(Kenya) Limited dated 30 May 2012
in respect of the area of approximately
14,287 km(2) onshore Kenya and designated
as block 11B; or, as the context
may require, the contract area to
which this production sharing contract
relates
Board of Directors the Directors of the Company
boe barrels of oil equivalent
Bomono Permit the production sharing contract
between the Republic of Cameroon
and EurOil, dated 12 December 2007
in respect of the area of approximately
2,328km(2) comprising former blocks
OLHP-1 and OLHP-2 onshore Cameroon;
or, as the context may require,
the contract area to which that
production sharing contract relates
Bowleven Bowleven plc (LSE: BLVN) and/or
its subsidiaries as appropriate
Bowleven (Kenya) Bowleven (Kenya) Limited, an affiliate
Limited / Bowleven of the Company, incorporated in
Kenya Scotland
Companies Act the United Kingdom Companies Act
2006 2006 (as amended)
Company Bowleven plc
contingent resources those quantities of hydrocarbons
that are estimated to be potentially
recoverable from known accumulations,
but which are not currently considered
to be commercially recoverable
EA Exploitation Authorisation
EAA Exploitation Authorisation Application
E&P Exploration and Production
Etinde Permit the Etinde Exploitation Authorisation
(EA) area. The Etinde EA, granted
on 29 July 2014, covers an area
of approximately 461km(2) (formerly
block MLHP-7) and is valid for an
initial period of 20 years
Eneo Eneo Cameroon SA, an Actis LLP affiliated
company. Eneo provides over 900
MW of generation and supplies electricity
to more than 1 million customers.
FID final investment decision
First Oil First Oil Expro Limited, a private
UK independent exploration and production
company based in Aberdeen. On 19
February 2016 First Oil Expro Limited
went into administration.
FTG full tensor gravity gradiometry
G&A general and administration
Group the Company and its direct and indirect
subsidiaries
IFRS International Financial Reporting
Standards
IM the Isongo Marine Field area, block
MLHP-7, Etinde Permit
km(2) square kilometres
LNG liquefied natural gas
LUKOIL LUKOIL Overseas West Project Ltd,
a subsidiary undertaking of OAO
LUKOIL
MD measured depth
mmboe million barrels of oil equivalent
MOU memorandum of understanding
mmscfd million standard cubic feet of gas
per day
MW megawatt; a unit of power equal
to one million watts
NewAge New Age (African Global Energy)
Limited
ordinary shares ordinary shares of 10p each in the
capital of the Company
PSC production sharing contract
P50 50% probability that volumes will
be equal to or greater than stated
volumes
SNH Société Nationale des
Hydrocarbures, the national oil
and gas company of Cameroon
tcf trillion cubic feet
US United States of America
2D two dimensional
$ United States of America Dollars
GBP or GB pounds Great Britain Pounds Sterling
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR JLMFTMBITBFF
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