Bowleven Share Discussion Threads

[oilretire] 19/3/2017 14:08

They'll be a lot of junior O&G companies who have seen their share prices up a lot recently considering making an all share offer to get at Bowleven's cash balance.

AEX ;-)

Now that would make for an ironic situation :-)

[yasrub] 19/3/2017 13:50

I always wondered whether Cairn were a realistic option. Not sure the Entinde % is too low now for them to be interested but some of the ex board members have history there.

[888icb] 19/3/2017 13:16

There is uncertainty about what is going to happen next but whatever happens in my view the share price will rise because the company is worth a lot more than its current market cap.
We just have to wait for a take over or merger. Perhaps COC will buy more shares or someone else will start stake building.I am sure it's going to be interesting but don't see much downside from the current share price

[loglorry1] 19/3/2017 12:28

They'll be a lot of junior O&G companies who have seen their share prices up a lot recently considering making an all share offer to get at Bowleven's cash balance. If your share price has doubled in recent months it makes sense.

I'd be amazed if BLVN have not had these types of offers already. Long term holders should not necessarily welcome them.

Let's not forget the Sunday Times reported last week a landslide victory for CoC and mass BoD resignation. It's not at all clear they have any inside scoop at all.

[aphrodites] 19/3/2017 12:03

Article in Sunday Times 19-3-17

Embattled oil explorer Bowleven has hoisted the “for sale” sign after a shareholder putsch saw top two executives voted off the board last week.

Chairman Billy Allan has kicked off a “strategic review” in an apparent attempt to flush out bidders for the Africa-focused minnow, industry sources said.

Suitors, however, could be deterred by the upheaval in Bowleven’s top ranks. Last week, activist investor Crown Ocean Capital ousted five directors, including boss Kevin Hart, and finance chief Kerry Crawford.

Crown Ocean, which owns 22% of the company, failed to depose Allan, who just survived with 50.65% of votes cast in his favour. He has refused to sack Hart and Crawford — even though they are no longer directors of the company.

Crown Ocean, which is based in Monaco and backed by two German businessmen, has called a second extraordinary shareholder meeting in a bid to remove Allan, and install two more of its appointees on the board.

“We now see a significant danger posed by either a dysfunctional board or one controlled by Mr Allan who could use his casting vote to maintain the status quo and protect his and the old leadership’s entrenched positions,” said Crown Ocean.

The fund began building up its stake in Bowleven, which has a market value of £112m, last year. It believes that the company has not adequately developed its main asset, the Etinde discovery off the coast of Cameroon. It also criticised boardroom pay levels. Hart took home £568,000 last year, compared with £903,000 in 2015.

Crown Ocean wants Bowleven to get out of oil exploration and production and return its excess capital to shareholders.

Bowleven has accused Crown Ocean of a “blatant attempt” to grab its £76m cash pile. Unlike many rivals, Bowleven emerged from the downturn in the oil industry debt-free and with money in the bank. In 2014, when the crude price was near historic highs, it sold a majority stake in Etinde, significantly bolstering its balance sheet.

But Crown Ocean accuses Bowleven management of “destroying shareholder value”. Since 2011 its share price has plunged from a high of nearly 400p to 35.25p last week. Bowleven declined to comment.


As I said earlier in the week, Mr. Allen and nearly all his old cronies must go. Very surprised he has not resigned!

Crown will continue to increase its stake next week to ensure when they next vote they take control of the company and nearly all the old brigade will all be ousted.

With Crown in control, I would not be surprised to see some form of relationship announced shortly with an Asian oil based business.

The business at it stands is worth over 70p and the price today should be a lot, lot higher.

[cyan] 19/3/2017 12:03

Thanks for the link Ohisay.
One could interpret ALLEN's action as a public appeal for a White Knight.

The only thing clear, imo, is that this coming week will see parties buying more shares. Goodness, even Billy may dip into his own pocket.

If you are looking for an early exit around 40p , this is the week that MIGHT just give you the chance, imo.

[ohisay] 19/3/2017 09:42

Stranger and stranger.



Embattled oil explorer Bowleven has hoisted the “for sale” sign after a shareholder putsch saw top two executives voted off the board last week.

Chairman Billy Allan has kicked off a “strategic review” in an apparent attempt to flush out bidders for the Africa-focused minnow, industry sources said.

[symbo] 18/3/2017 18:35

The one question that I would like an answer to is.....who is lying about the apparent initial approach by coc and the suggestion of a mb at the pertaining share price rate. I think the answer to that question would tell us much about what's going on and where we will end up. Really strange that there has been no supporting evidence from either side. I'm tempted to think that both sides were up for it and perhaps one renaged on the deal and tried to shaft the other, this lead to bad blood and hence current situation and leaves them both in a bad view and consequently not able to say much either way.
Perhaps that's fanciful but the situation remains very odd!

[belo horizonte] 18/3/2017 13:52

Not apportioned exploration costs. As I understand it, the total exploration costs are assigned to the JV and any benefits from the JV, i.e. possible dividends to the parent companies, are in proportion to the JV interest of each party. It is not a case of reimbursing exploration costs but offsetting them against income before tax. The money retained within the JV as a result of the offset can be used to further develop the assets as additional capital expenditure. It cannot be distributed as cash to the JV partners unless the JV is wound up; in which case there will be tax liabilities.

[loglorry1] 18/3/2017 13:31

If it helps KH was once touting a value of $1bn post tax NPV for 100% of Etinde (at size it is now) at $70 oil. This was around the time of the Petrofac deal. He later went on to sell 40% for $250m inc carry etc. Appraisals may lead to increased size obviously.

[benjimun] 18/3/2017 13:00

Belo..
I reading from your comments that the JV partners can take offset their apportioned exploration costs incurred and offset it agains their local country tax bill.

What I was not sure of was whether that deal is specific to the Cameroon govt.
ie they would look to reimburse exploration costs once commercialsiation is reached as a sweetner to devlop the assets.

Either way would be interesting to see what that value that is and what it might hadd to the value of the company.

[belo horizonte] 18/3/2017 12:17

The explorations costs of any nature are retained by the Joint Venture. Normally these capitalised costs can be offset against income in the P&L statement. Therefore it reduces the taxable income (and any potential dividends) but increases cash in the Joint Venture which can fund further exploration. There are actually a number of options available for treating exploration costs due to the specific nature of O&G exploration, with dry wells/producing wells etc. I don't know how royalties are calculated in Cameroon but they could well be based on sales.

[benjimun] 18/3/2017 11:55

As an aside I was looking through the brochure that BLVN sent out trying to solicit my support. I noticed the following:
P21 subsection e) MHLP-5 MHLP-6 Drilling:
The section describes what was found and that was not commercially viable but remains open for future development.. then the last paragraph states
'Past exploration costs associated with the blocks MHLP-5 and MHLP-6 form part of the cost pool retained by the joint venture for recovery against the potential development on block MLHP-7'

So am I understanding correctly that any royalties to cameroon are deferred/reduced until the cost associated have been recovered via profits from Etinde MLHP-7?

Do we know how much that is approximately and whether that cost recovery is BLVNS alone or split out post farmout? Past exploration costs is just drilling correct,
would not seismic data gathering not count?

I bring this up as it occurs tome that these costs migh be significant and need to be included in the Etinde valuation BLVN is bought outright.

[belo horizonte] 18/3/2017 11:15

Best plan for Billy is to buy a serious amount of shares in the company and cut costs to suit the current reality of the company's holdings. At present a non-shareholder is defying the wishes of a legitimate shareholders vote. He and other sore losers prefer to go on the basis of a head count rather than a vote count. Couldn't make it up.

[glavey] 18/3/2017 03:13

WINNET'S WORLD
ACT 2, SCENE 3 - 'Let's hope billy has a plan'

BILLY: "Kev, what say we sell the furniture so they have nowhere to sit?"

KEVIN: "Yes, and we can hide the key to the toilets, that should do it!"

[gark] 17/3/2017 22:31

I reckon that is a typo and should read 74mn shares. With 34mn not sure they would have enough to call for another EGM.

[thatbrat] 17/3/2017 22:23

Yes, Winnet, me too. I have tried to be supportive of longer-term higher reward strategy. That is exactly why I invested here. But have reached my limit, hence must adapt to current situation.
Do keep posting. Your posts are measured, thoughtful and valuable, in amongst many which are overly aggressive and personal. Thx.

[winnet] 17/3/2017 21:36

Of course that brat, etinde is worth much more posts appraisals. Thus the forcing out of billy and co, who would have value returned to to shareholders, not coc.

Unfortunately i personally haven't got enough amo to fight coc. Let's hope billy has a plan.

[thatbrat] 17/3/2017 20:56

More important than Lechartier’s 1 year stint at Afren (or 3 at Petroceltic), is perhaps his 5-6yrs work at Perenco as New Business lead, Perenco being a prominent operator in Cameroon.
If Etinde is only suggested to be going on the market for around 50-72p to a single buyer, COC would be severely limiting their potential upside if they were not to open up the sale to companies beyond NA and Luk, eg: Perenco or Addax (prominent Cameroon operators) and others. At 50-70p Etinde is an absolute steal for any of these companies; much cheaper than actually exploring for O&G, if you know how to evaluate the asset properly. Fully monetized value for Etinde (previous posts) prospective resources is vastly beyond 50-72p. That is what all the handbag-swinging is about.
Opening up an Etinde sale may see some very interesting bidding…Not just a sale to NA (as predicted on these boards). There are plenty of prospective buyers out there at these prices…
Not to mention NA and Lukoil bidding against each other for control (as distinct from operatorship) of the Etinde asset.
I had hoped that retaining BA as Chairman with the new COC directors would assist in managing openly the development or disposal of the Etinde asset. However, with COC involvement, the shareholder-base (by number of shares, not the disingenuous ‘number of shareholders’ measurement) has changed from high-reward, long-term investment strategy, to shorter-term low/moderate fast-turnover model. Non-COC supporters should be aware of this and adapt accordingly, or purchase more equity to preserve their strategy-position.
Although the above is speculative, the African dealspace is dynamic, and Etinde is a tinderbox! Lets get the above companies bidding against each other for Etinde…where are the matches…?

[thegrumpster] 17/3/2017 20:15

"Deal is in Cameroon Gov. hands. Bowleven can only walk away if gov. says no to deal and that is extremely unlikely."
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"Someone" could persuade the Government to drag their heels until after the 30th June, while the other party might do the opposite?

Plus it only mentions two conditions of the "amongst other things".
Admittedly only those two points might be the "conditions precedent" that allow either of the parties to terminate the agreement?

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From the agreement RNS:

"Completion is subject to, amongst other things:

Ø The grant of a PEA over the Bomono PSC. The PEA application was submitted by Bowleven to the Cameroon authorities as requested following Ministerial approval for the award of a two-year extension to the Bomono PSC (to 12 December 2018);

Ø The approval by the Cameroon Government of the assignment of the equity interest from EurOil to GDC Bomono; and

Ø Should these conditions precedent not be satisfied by 30 June 2017, both Bowleven and VOG have the right to terminate the Agreement."

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The RNS might have been worded this way by the BOD to give investors the impression that BVLN was locked in to this agreement. But they'd have to be pretty demented not to have allowed for a way to slide out, if needed.