UK-based, Africa-focused explorer Bowleven completed its Etinde farm-out deal, netting an initial US$165 million cash.
The deal comprised the sale of 30% and 10% interests in the Etinde Permit, offshore Cameroon, to Russian international independent LUKOIL and African explorer NewAge, respectively, in return for a total $250 million.
Bowleven will also get an up to $40 million (net) carry for two Etinde appraisal wells, including testing; $15 million cash to be received on completion of appraisal drilling; and
$25 million cash contingent upon and to be received at Etinde development project final investment decision.
The operatorship of Etinde has transferred to NewAge, with Bowleven retaining a 20% nonoperated interest.
In August last year, Bowleven's Etinde Exploitation Authorization (EA) was formally signed by the President of Cameroon, paving the way for the firm to develop the Etinde area.
The EA gives Bowleven and its partners, which will include SNH, the Cameroon State oil company, development and exploitation rights over block MLHP-7 for an initial 20 years, with the option to renew for up to a further 10 years.
Initial development plans are focused on the IM field on block MLHP-7 and initial dry gas sales are envisaged to be to a proposed fertilizer plant enabling liquids production, said Bowleven at the time.
Kevin Hart, Chief Executive of Bowleven, said: “We are delighted the farm-out transaction to LUKOIL and NewAge has completed. The resulting consideration of cash and carry, together with the expanded and strengthened joint venture, will enable the progression of appraisal and development activities on Etinde.
"Planning for the appraisal drilling on the Intra Isongo is already underway with locations for the two wells nearing finalization. With a carry in place to cover our share of drilling and testing we are looking forward to appraising this exciting reservoir interval.
"Against a challenging market backdrop our strengthened balance sheet following the transaction puts us in a strong position.”