Interim Results Announcement

RNS Number : 6927D

BowLeven Plc

28 March 2011

 



28 March 2011

Bowleven plc ('Bowleven' or 'the Company')

Interim Results Announcement

Bowleven, the West Africa focused oil and gas exploration group traded on AIM, today announces its interim results for the six months ended 31 December 2010. 

HIGHLIGHTS

Operational                                                       

·    Sapele-1 exploration well targeting multiple stacked objectives delivered positive results:

o Significant prospectivity of the Douala Basin confirmed;

o Two potentially significant oil and gas condensate discoveries made in the Tertiary interval at Sapele-1;

o Presence of hydrocarbons in the Cretaceous, offshore Douala Basin confirmed.

·    Drilling on the Sapele-1ST (sidetrack) and Sapele-2 appraisal wells progressing on schedule.

·    P50 contingent resources for the Group increased by 31% to 213 mmboe (net) after incorporating initial Sapele-1 Tertiary results.

·    Multi-well drilling programme targeting both Tertiary and Cretaceous prospectivity is underway;  forward programme is expected to evolve as drilling activity progresses.

·    Seismic coverage expanded over the Etinde and Bomono Permits in Cameroon; evaluation of further exploration upside is ongoing.

·    IE-3 appraisal well, offshore Cameroon, tested cumulative maximum rate of around 23,000 boepd; appraisal activities on the IE and IF discoveries are progressing.

Corporate

·    Successfully raised $112 million via equity placing in November 2010.

·    Group cash balance $189 million at 31 December 2010, no debt.

·    Fully funded for current drilling programme on Etinde; significant financing flexibility.

2011 OUTLOOK

·    Ongoing exploration and appraisal activity in Cameroon is likely to include:

o Completion of Sapele-1ST well and testing programme to appraise the Deep Omicron oil discovery;

o Completion of the Sapele-2 appraisal well targeting Lower and Deep Omicron fairways;

o Further exploration/appraisal wells targeting Tertiary and Cretaceous prospectivity in the Douala Basin;

o Identification of potential leads and prospects from newly acquired MLHP-6 3D seismic prior to formulating the 2012 Etinde drilling programme;

o Further appraisal activities on the block MLHP-7 discoveries; and

o Generation of leads and prospects from the new Bomono 2D seismic ahead of planned 2012 drilling programme.

·    Convert resources to reserves; progress IE and IF development projects towards sanction.

Kevin Hart, Chief Executive of Bowleven plc, said:

"We are delighted with progress made towards our overarching objectives of exploring the significant potential of the Douala Basin and converting resources to  reserves on Etinde.  In an exciting and eventful period for Bowleven, the ground-breaking Sapele-1 well has highlighted the significant Tertiary and Cretaceous potential of the acreage,  an important step towards realising our vision for the Basin.

Operational activity in Cameroon will continue at pace.  The near term focus is on appraising the extent of the Sapele-1 Tertiary oil and gas condensate discoveries. The Sapele-1ST and Sapele-2 wells are already underway and are progressing on schedule.  In addition, the multi-well forward programme also envisages block MLHP-7 appraisal drilling, further Tertiary drilling on block MLHP-5 and a return to the Cretaceous, a play that has the potential to transform the Douala Basin and Bowleven.  It is an exciting time for the team and we look forward to pursuing the multiple opportunities our acreage has to offer."

ENQUIRIES

For further information please contact:

Bowleven plc

Kevin Hart, Chief Executive                                          00 44 131 524 5678

Kerry Crawford, Head of Investor Relations                 00 44 131 524 5678

Brunswick Group LLP

Patrick Handley                                                            00 44 207 404 5959

Natalia Erikssen

RBS Hoare Govett                                                      

Stephen Bowler                                                            00 44 207 678 8000

Jamie Buckland                                                            00 44 207 678 8000

A presentation to analysts is scheduled for 09.30 (BST) on Monday 28 March 2011.  A copy of this announcement and the presentation will be available on the Bowleven website: www.bowleven.com

The presentation will be recorded and an audio version will be available on the Bowleven website to listen to on demand approximately four hours after the presentation has concluded.

These materials contain forward-looking statements regarding Bowleven, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward-looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are, by their nature, subject to significant risks and uncertainties and actual results, performance and achievements may be materially different from those expressed in such statements. Bowleven undertakes no obligation to revise any such forward-looking statements to reflect any changes in its expectations with regard thereto or any change in circumstances or events after the date thereof.

Note to Announcement:

(1)        The technical information in this release has been reviewed by Ed Willett, who is a qualified person 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 and a member of the Petroleum Exploration Society of Great Britain with over 25 years' experience in oil and gas exploration and production.

Notes to Editors:

Bowleven is a West Africa focused oil and gas exploration group, based in Edinburgh and traded on AIM since 2004. Bowleven's strategy is focused on creating and realising material value through exploration led organic growth.

Bowleven holds equity interests in 7 blocks in Cameroon and Gabon, with 4 blocks located offshore in shallow water, and 3 onshore, with 6 of these blocks operated by Bowleven. The Etinde Permit (Bowleven 75%; Vitol 25%) comprises approximately 2,316 km² of exploration acreage located across the Rio del Rey and Douala Basins. There is an extensive multi-well exploration and appraisal drilling programme ongoing on the Etinde Permit during 2011.

Bowleven's overall P50 contingent resource base is 213 mmboe (net).

CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT

The recent period has represented an exciting and highly encouraging time for Bowleven.  Significant progress has been made towards the Group's two overarching near term objectives, namely: 

1)   Further "Exploring the Douala Basin in Cameroon" and unlocking the potential of our acreage position in this relatively unexplored area encompassing both our onshore Bomono Permit and a substantial part of the offshore Etinde Permit; and

2)   Converting "Resources to Reserves" through the ongoing appraisal and subsequent  anticipated development sanction of the IE and IF discoveries on block MLHP-7 of the Etinde Permit.

These key objectives remain the primary focus of the business as we endeavour to create significant additional value for our stakeholders.

Details of the recent milestones reached and activities undertaken to achieve these objectives are provided below.

Operational activity has recently reached record levels within the Group.  Following straight on from the drilling of the encouraging IE-3 appraisal well, and the highly successful and potentially transformational Sapele-1 exploration well, we are now embarking on an extensive 2011 work programme.

The operational highlights of the 2011 programme are likely to include:

·    Completion of Sapele-1ST (sidetrack) and testing programme;

·    Drilling the Sapele-2 appraisal well approximately 5 km down dip from the original discovery well;

·    Further Tertiary exploration/appraisal wells on the Douala Basin acreage with the flexibility to drill the deeper Cretaceous potential;

·    Interpretation of the new block MLHP-6 seismic and the identification of prospects as potential candidates for 2012 drilling locations;

·    Further appraisal activities on the block MLHP-7 discoveries; and

·    Evaluation of the 500 km of 2D seismic acquired over Bomono and the identification of prospects for drilling in 2012.

Exploring the Douala Basin

The Douala Basin is an emerging hydrocarbon province that until recently has seen limited exploration activity.  The historic view that the Basin was gas prone has been transformed by the discovery of liquids by other operators in the area and Bowleven's own oil and gas condensate discoveries in the Sapele-1 exploration well.

The Sapele-1 well location was selected to intersect multiple independent exploration targets in both the Tertiary and Cretaceous intervals from a single location, albeit in necessarily sub-optimal locations.

In the Tertiary interval Sapele-1 encountered (based on wireline log evaluation, pressure gradients and fluid samples) the Deep Omicron oil and the Lower Omicron gas condensate discoveries. Given the stratigraphic nature of these discoveries further  evaluation and appraisal is ongoing to establish their extent and confirm commerciality. Sapele-1ST (sidetrack) and Sapele-2 are both currently drilling and the principal objectives of these wells are to appraise the Deep Omicron (Sapele-1ST) and the Lower and Deep Omicron (Sapele-2) discoveries encountered at Sapele-1.  Initial fairway mapping indicates that the Omicron fairways cover the majority of block MLHP-5 and, as a result, further Tertiary drilling is anticipated.

The Cretaceous stratigraphy drilled at Sapele-1 represents a new play, previously untested within this part of the Douala Basin.  Plans to deepen the Sapele-1 well in the Cretaceous interval were halted prematurely at 4,673 metres (TD) in early February 2011 due to technical limitations after encountering a rapid influx of high pressure gas.   Based on analysis of the major step change in pressure encountered and seismic interpretation, it is believed that the well may have encountered a significant hydrocarbon column in the Cretaceous.  A principal objective of the Sapele-1 well was to prove the concept of the Cretaceous play offshore.  Although further exploration drilling is required to assess the prospectivity of the Cretaceous, the well has confirmed the presence of reservoir and hydrocarbons (including oil) in the Cretaceous and consequently has extended the play fairway significantly offshore in the Douala Basin.  Given the significant potential identified, the 2011 Etinde programme will be planned with the flexibility to include further Cretaceous drilling with the higher specification Sapphire Driller rig.

Activity has intensified across the Douala Basin in recent times, with neighbouring operators acquiring seismic, drilling exploration wells and more recently sanctioning development projects.  Bowleven is well-positioned to access this emerging opportunity via both its offshore Etinde and onshore Bomono acreage. 

Bowleven has also stepped up its activities in the Basin and this momentum is expected to continue.  Given the level of activity planned, discussions are progressing well for an extension to the exploration period within the terms of the Etinde PSC.  The near term Douala Basin drilling focus is on block MLHP-5.  This however is expected to continue and expand into block MLHP-6 and the onshore Bomono Permit as the extensive seismic acquired over these areas during 2010/11 is interpreted and evaluated.

Although it is still at an early stage of evolution we believe that the Douala Basin has the potential to become a major hydrocarbon producing area in the future.

Resources to Reserves

As at 31 December 2010, Bowleven's combined P50 contingent resource base on a net basis is 213 mmboe (gross basis 281 mmboe).  This represents an increase of 31% on both a net  and gross basis from the resources disclosed in the 2010 Annual Report.  This upward revision relates to the initial volumetrics included for the Tertiary discoveries encountered in the Sapele-1 well.  Appraisal drilling is already underway with the Sapele-1ST sidetrack and Sapele-2 appraisal well and the results of this drilling have the potential to augment these initial volumes.

The Group remains focused on converting resources to reserves on block MLHP-7.  A notable step towards this was achieved in the period with the completion and testing of the IE-3 appraisal well. Planned appraisal activities are progressing on both the IE and IF fields and a further MLHP-7 appraisal well is anticipated.

Further volumetric updates are anticipated as appraisal activity, including drilling, is carried out on Etinde.

In addition to the contingent resource noted above, there remains a significant unrisked prospective resource inventory across the Etinde and Bomono Permits.  Sapele-1 has highlighted the potential of the Douala Basin and the well results are being used to calibrate the seismic and to de-risk other prospects and leads identified in the area.  Moreover, the interpretation of newly acquired seismic will be integral in extending Bowleven's Basin-wide prospect inventory.  The drilling of further exploration wells will be required to confirm this resource potential and future drilling is expected to target both the Tertiary and Cretaceous prospectivity identified across our acreage. 

Operations

It has been an active period for the Group with appraisal and exploration drilling on the shallow water Etinde Permit and seismic activity on both Etinde and the onshore Bomono Permit.  The multi-well drilling campaign on Etinde is well underway and with a second rig contracted and operating, the 2011 programme is expected to be our busiest yet.

Cameroon - Etinde Permit

Drilling

Drilling activity is centred around Bowleven's dual strategy of transferring resources to reserves and further investigating the potential of the Group's acreage through high impact exploration wells.

The Noble Tommy Craighead jack-up rig was contracted for a programme of two firm plus up to two contingent wells.  The IE-3 appraisal well (MLHP-7) was the first well in the campaign and the Sapele-1 exploration well (MLHP-5) the second.  The rig is now drilling Sapele-1ST to an estimated vertical depth of circa 3,682 metres (4,761 metres measured depth).  Drilling is expected to take a further 10 to 20 days (excluding testing) depending on the pace of drilling. After completing this well the intention is to release the rig for a mandatory recertification process.  On conclusion of this process, which is expected to take three to five months, the rig will be available to complete the contract.

A second rig, the Vantage Sapphire Driller jack-up, came on contract in early March 2011 on a three firm wells plus one contingent well basis (subject to a break option at the end of the second well, exerciseable by the joint venture).  This rig spudded the Sapele-2 well on 17 March 2011 and drilling is expected to take approximately 50 to 60 days (excluding testing).  The well is being drilled to an estimated target depth of circa 3,724 metres in water depths of around 25 metres.

Several further drilling locations have been identified on MLHP-5, including both Tertiary and Cretaceous targets. In addition to the current and planned drilling on MLHP-5, an appraisal well on MLHP-7 is anticipated.  The specific timing for the MLHP-7 appraisal well will be influenced by the completion of ongoing appraisal work.  The forward programme is expected to evolve as drilling activity progresses.

Seismic

The acquisition of 658 km² of  new marine 3D seismic and reprocessing of existing 3D seismic over Etinde was completed during 2010.  The reprocessed survey has significantly improved seismic imaging and this, combined with the newly acquired seismic over the IF field, will be used in planning future appraisal and development activity on MLHP-7.   In addition, seismic coverage over Etinde has been significantly extended through the acquisition of new seismic over MLHP-6 and the eastern edge of MLHP-5.  This seismic will be integral in developing a Permit-wide prospect inventory and in planning future exploration drilling on the acreage.

Appraisal/Development

Considerable attention has been given to appraisal activities on the existing MLHP-7 fields during the period.  Following the completion of the IE-3 appraisal well (including multi-interval testing) the focus, in collaboration with our joint venture partner (Vitol), has been on evaluating the extensive dataset acquired from IE-3 and building a dynamic model for the IE field.  In addition, the newly acquired 3D over the IF field is now being interpreted. Alongside this appraisal activity, conceptual development planning for the MLHP-7 fields is progressing.  Currently the preferred development route, ensuring potential synergies are exploited, is an FPSO combining both IE and IF field areas.  In addition, the recent oil and gas condensate discoveries in Sapele-1 on MLHP-5 add a potential further dimension to development strategy and planning for Etinde.  Preparations are ongoing on an appraisal plan for block MLHP-5 and an addendum to the block MLHP-7 appraisal plan.

Cameroon gas monetization

The GDF and SNH initiative to progress the monetisation of the substantial undeveloped gas resource within Cameroon via an in-country gas aggregation scheme to supply an LNG facility is moving forward.   A pre-FEED project has commenced and is expected to be completed in the first half of 2011.  The Etinde Permit fields are seen as key potential upstream contributors to the proposed LNG plant and preliminary discussions have commenced with GDF/SNH on the commercial aspects of the project.

Cameroon - Bomono Permit

The programme to acquire 2D seismic on Bomono, onshore Douala Basin, was completed at the end of January 2011, resulting in the acquisition of 500 kilometres in total. Processing and interpretation of the new data is underway.  The new seismic will be used to update the prospect and lead inventory for the Permit and subsequent selection of well locations for drilling in H1 2012.

Gabon - EOV Permit

The Group is in the process of disposing of its entire interest in the EOV Permit, offshore Gabon.  An initialled SPA has been agreed and focus has been on engaging with the various authorities in Gabon to formalise the disposal.  Despite the prolonged process significant progress towards completion has been made.

Proceeds expected include a cash consideration of $35 million and a working capital adjustment from the effective date of the transaction.

Gabon - Epaemeno Permit

An 18 month extension to the exploration term (to February 2012) was confirmed by the Gabonese authorities in September 2010.  Addax, as operator, is preparing for drilling activity in early 2012 and is planning the necessary civil works during 2011 on finalising the intended well location.

New Ventures/Farm-out Opportunities

Bowleven continues to review potential opportunities to acquire additional acreage in West Africa, its region of focus, and to review farm-out opportunities to optimise the exploitation of its overall portfolio for shareholders.

Vitol

The farm-out transaction whereby Vitol acquired a 25% participating interest in the Etinde Permit in return for funding a $100 million (gross) exploration/appraisal work programme completed in June 2010. Consequently, Vitol-funded activities during 2010 included the extensive 3D seismic acquired on the Permit and IE-3 appraisal and Sapele-1 exploration wells.  Vitol has an option (exerciseable by 31 March 2011) to acquire a further 10% interest in block MLHP-7 only in return for funding a further agreed $50 million (gross) appraisal programme.  The principal focus of Vitol's participation in Etinde is to move the existing discovered resource base towards development sanction. Consequently, Vitol has been actively involved in ongoing appraisal activities on block MLHP-7 and this is expected to continue as the joint venture formulates the optimal path to development.

Finance  

The Group has reported a loss of $15.7 million for the six months ended 31 December 2010 (H1 2009: profit of $1.0 million). The results for the period include a foreign exchange loss of $8.3 million (H1 2009: foreign exchange gain $7.7 million), primarily due to the recognition of foreign exchange differences on intra-group funding under IFRS as the US dollar weakened against sterling. Administrative expenses for the Group were $7.7 million (H1 2009: $7.0 million).

The majority of expenditure incurred on Etinde in the six months under review was covered by the $100 million Vitol carry. As a result, capital expenditure cashflows during the period were only $16.2 million; primarily on Etinde activities after utilising the carry and seismic activities on Bomono. A net cash inflow of $6.2 million was received from investing activities in the period (H1 2009: cash outflows of $14.2 million) including the $22 million refund from Vitol for spend on Etinde while awaiting final government approval of the Etinde farm-out transaction.

On 26 November 2010, Bowleven issued 22,000,000 ordinary shares at a price of £3.27 per share, raising net proceeds of $112 million.

At 31 December 2010, Bowleven had $189 million of cash and no debt. With Bowleven's existing cash balances the Group is well-placed to fund its 2011 work programme.  In addition, a further $35 million proceeds are pending from the EOV disposal.  As the Group moves from resources to reserves alternative development funding options will also be considered.

Farm-out opportunities across Bowleven's acreage remain under review. The 75% equity interest currently held on Etinde presents an opportunity to bring in additional farm-in partners if appropriate.

Outlook

The recent results from the Sapele-1 and IE-3 wells have provided an excellent and encouraging springboard for the forthcoming period.

We believe that through continued focus, application and team work we can deliver on our key objectives of converting resources to reserves and proving up the significant exploration potential of the Douala Basin.

The Sapele-1 well has provided an invaluable insight into what treasures may be awaiting  discovery. Our future drilling programme will go a long way to determining how extensive these may be.     

Ronnie Hanna, Chairman

Kevin Hart, Chief Executive

28 March 2011

Bowleven plc

GROUP INCOME STATEMENT

for the six months ended 31 December 2010

	6 months ended 31 December 2010 (Unaudited) $’000	6 months ended 31 December 2009 (Unaudited) $’000	Year ended 30 June  2010 (Audited) $’000
Revenue	-	-	-
Administrative expenses	(7,743)	(7,040)	(12,399)
Operating loss before financing costs	(7,743)	(7,040)	(12,399)
Finance income	326	8,059	31,881
Finance costs	(8,298)	-	(1)
(Loss)/profit from continuing operations before taxation	(15,715)	1,019	19,481
Taxation	-	-	-
(Loss)/profit for the Period From Continuing Operations Attributable to Equity Shareholders of the Parent Undertaking	(15,715)	1,019	19,481
Basic and diluted (loss)/profit per share ($/share)	($0.08)	$0.01	$0.10

Bowleven plc

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 31 December 2010

	6 months ended 31 December 2010 (Unaudited) $'000	6 months ended 31 December 2009 (Unaudited) $'000	Year ended 30 June 2010 (Audited) $'000
(Loss)/profit for the period	(15,715)	1,019	19,481
Other comprehensive income:
Currency translation differences	6,382	(9,029)	(35,495)
Total Comprehensive Income for the period  Attributable to Equity Shareholders	(9,333)	(8,010)	(16,014)

Bowleven plc

GROUP BALANCE SHEET

As at 31 December 2010

	As at 31 December 2010 (Unaudited) $'000	As at 31 December 2009 (Unaudited) $'000	As at 30 June 2010 (Audited) $'000
Non-current Assets
Intangible exploration assets	327,166	300,960	304,350
Property, plant and equipment	758	812	747
	327,924	301,772	305,097
Current Assets
Inventory	8,657	8,644	6,926
Trade and other receivables	14,147	7,316	43,934
Cash and cash equivalents	189,389	109,966	79,152
	212,193	125,926	130,012
Total Assets	540,117	427,698	435,109
Current Liabilities
Trade and other payables	(24,614)	(9,017)	(23,548)
Total Liabilities	(24,614)	(9,017)	(23,548)
Net Assets	515,503	418,681	411,561
Equity
Called up share capital	37,807	34,280	34,280
Share premium	619,437	510,538	510,538
Foreign exchange reserve	(72,473)	(52,389)	(78,855)
Shares held by employee benefit trust	(944)	(975)	(944)
Other reserves	12,925	11,331	12,076
Retained deficit	(81,249)	(84,104)	(65,534)
Total Equity Attributable to the Equity Shareholders	515,503	418,681	411,561

Bowleven plc

GROUP CASH FLOW STATEMENT

for the six months ended 31 December 2010

	6 months ended 31 December 2010 (Unaudited) $’000	6 months ended 31 December 2009 (Unaudited) $’000	Year ended 30 June 2010 (Audited) $’000
Cash Flows used in Operating Activities
(Loss)/profit before tax	(15,715)	1,019	19,481
Adjustments to reconcile Group (loss)/profit before tax to net cash used in operating activities:
Depreciation and impairment of property, plant and equipment	215	251	496
Finance income	(326)	(8,059)	(31,881)
Finance costs	8,298	-	1
Equity-settled share based payment transactions	849	1,222	2,106
Adjusted loss before tax prior to changes in working capital	(6,679)	(5,567)	(9,797)
(Increase)/decrease in inventory	(1,731)	124	1,842
(Increase)/ decrease in trade and other receivables	(607)	(591)	(804)
Decrease/(increase) in trade and other payables	2,571	1,754	1,490
Exchange differences	57	84	63
Net Cash used in Operating Activities	(6,389)	(4,196)	(7,206)
Cash Flows from/(used in) Investing Activities
Purchases of property, plant and equipment	(226)	(137)	(317)
Purchases of intangible exploration assets	(15,965)	(14,344)	(39,352)
Refund of intangible exploration asset spend incurred on behalf of joint venture partner	22,052	-	-
Interest received	312	255	713
Net Cash from/(used in) Investing Activities	6,173	(14,226)	(38,956)
Cash Flows from/(used in) Financing Activities
Net proceeds from issue of ordinary shares	112,426	533	533
Purchase of own shares	-	(975)	(975)
Net Cash Flows from/(used in) Financing Activities	112,426	(442)	(442)
Net Increase/(Decrease) in Cash and Cash Equivalents	112,210	(18,864)	(46,604)
Net increase/(decrease) in cash and cash equivalents	112,210	(18,864)	(46,604)
Effect of exchange rates on cash and cash equivalents	(1,973)	(1,457)	(4,531)
Cash and cash equivalents at the beginning of the period	79,152	130,287	130,287
Cash and Cash Equivalents at the Period End	189,389	109,966	79,152

Bowleven plc

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months ended 31 December 2010

	Equity Share Capital $'000	Foreign Exchange Reserve $'000	Shares Held in Trust $'000	Other Reserves $'000	Retained Deficit $'000	Total Equity $'000
At 1 July 2009	544,285	(43,360)	-	12,296	(87,310)	425,911
Proceeds from issue of share capital	537	-	-	-	-	537
Cost of issue of share capital	(4)	-	-	-	-	(4)
Total comprehensive income for the period	-	(9,029)	-	-	1,019	(8,010)
Share based payments	-	-	-	1,222	-	1,222
Transfer between reserves	-	-	-	(2,187)	2,187	-
Share purchased by employee benefit trust	-	-	(975)	-	-	(975)
At 31 December 2009	544,818	(52,389)	(975)	11,331	(84,104)	418,681
Total comprehensive income for the period	-	(26,466)	-	-	18,462	(8,004)
Share based payments	-	-	31	853	-	884
Transfer between reserves	-	-	-	(108)	108	-
At 30 June 2010	544,818	(78,855)	(944)	12,076	(65,534)	411,561
Proceeds from issue of share capital	115,110	-	-	-	-	115,110
Cost of issue of share capital	(2,684)	-	-	-	-	(2,684)
Total comprehensive income for the period	-	6,382	-	-	(15,715)	(9,333)
Share based payments	-	-	-	849	-	849
At 31 December 2010	657,244	(72,473)	(944)	12,925	(81,249)	515,503

 

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 2010, on which the auditors gave an unqualified report, 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.  For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements. In making this assessment, the Directors have considered the Group budgets, the cash flow forecasts and associated risks and the future financing for the organisation.

     3.   OTHER NOTES

a)   The basic earnings per ordinary share is calculated on a loss of $15,715,000 (H1 2009: profit of $1,019,000) on a weighted average of 197,099,783 (H1 2009: 193,020,451) ordinary shares.

b)   The loss attributable to ordinary shareholders and the number of ordinary shares for the purposes 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 (2009: nil).

d)   On 26 November 2010, the Company issued 22,000,000 ordinary shares at a price of £3.27 per share with a nominal value of $3,512,234. The total aggregate increase in the share premium reserve regarding the issue was $108,653,128, after deducting $2,684,690 in expenses. The balance of the increase in equity share capital of $260,317 relates to the exercising of share options during the period. 

e)   The refund of $22,052,000 due from Vitol for the spend incurred on Etinde while awaiting final government approval of the Etinde farm-out transaction was received during the six months to 31 December 2010.

4.   INTERIM REPORT

This document represents the Interim Report and half yearly results of Bowleven plc. Copies of the Interim Report will be sent to shareholders and can be obtained, free of charge, from the Company at 1 North St Andrew Lane, Edinburgh, EH2 1HX for a period of one month.

GLOSSARY OF TERMS:

The following are the main terms and abbreviations used in this announcement:

Addax	Addax Petroleum Corporation, a subsidiary of China Petrochemical Corporation (Sinopec)
AIM	Alternative Investment Market
BOE or 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 2,328km² comprising former Blocks OLHP-1 and OLHP-2 onshore Cameroon; or, as the context may require, the contract area to which this production sharing contract relates
Companies Act 2006	the United Kingdom Companies Act 2006 (as amended)
Bowleven	Bowleven plc and/or its subsidiaries as appropriate
EOV Permit	the exploitation and production sharing contract between the Republic of Gabon and GGPC Gabon (EOV) Limited (an indirectly wholly-owned subsidiary of the Company) dated 16 February 2004; or, as the context may require, the contract area to which this production sharing contract relates
Epaemeno Permit	the exploitation and production sharing contract between the Republic of Gabon and GGPC Gabon (Epaemeno) Limited (an indirectly wholly-owned subsidiary of the Company) dated 17 November 2004, in respect of an area of approximately 1,340km² onshore Gabon; or, as the context may require, the contract area to which this production sharing contract relates
Etinde Permit	the production sharing contract between the Republic of Cameroon and EurOil Limited (an indirectly wholly owned subsidiary of the Company) dated 22 December 2008 in respect of the area of approximately 2,316 km², comprising former blocks MLHP-5, MLHP-6 and MLHP-7, offshore Cameroon; or, as the context may require, the contract area to which this production sharing contract relates
EurOil	EurOil Limited, an indirectly wholly owned subsidiary of the Company, incorporated in Cameroon
FEED	front end engineering and design
FPSO	floating production, storage and offloading vessel
GDF	GDF Suez S.A.
Group	the Company and its direct and indirect subsidiaries
H1	first half
IE	the Isongo E Field area, Block MLHP-7, Etinde Permit
IF	the Isongo F Field area, Block MLHP-7, Etinde Permit
IFRS	International Financial Reporting Standards
km	kilometres
km²	square kilometres
LNG	liquefied natural gas
mmbbls	million barrels
mmboe	million barrels of oil equivalent
prospect, lead & play	a play is an exploration concept or idea that is conducive to the identification of leads that may, in turn, become prospects when they are ready to be drilled
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 company of Cameroon
SPA	sale and purchase agreement
STOIIP	stock tank oil initially in place
TD	total depth
Vitol	Vitol E&P Limited
2D	two dimensional
3D	three dimensional
$	United States of America Dollars
£	Great Britain Pounds Sterling

 

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