Formal approval for Bowleven project gives little reaction

Today’s announcement that Cameroon Oil and Gas explorer, Bowleven, had the formal decree awarding the Etinde Exploitation Authorisation (EA) signed by the President of Cameroon appears to have been brushed off by investors with the shares barely rising.

The EA gives Bowleven and its joint venture partners, which will include SNH, the Cameroon State oil company, development and exploitation rights over block MLHP-7 for an initial period of 20 years with the option to renew for up to a further 10 years.

The next big news is the signing of the Gas Sales Agreement (GSA)for a fertiliser plant with Ferrostaal for 20 year supply. The GSA was originally targeted for the first half of 2014 but clearly things have slipped, presumably because of the farm out deal with Lukoil and the delay in the signing of the EA by the Cameroon authorities.  With the shares still below 40p, shareholders badly need this deal signed and delivered.

Larger investors seem to have lost faith with Chief Executive Kevin Hart as evidenced by today’s muted reaction to the Presidential approval of the Etinde development. After participating in some $700 million of fund raising and seeing the shares at these levels, it is probably not surprising that the institutions are sitting on their hands for now with the shares rising around 1p.

Contrarian Investor UK

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