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Dragon Oil Explores Possible Offer for BowLeven; Shares Soar

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Feb. 17 (Bloomberg) -- Dragon Oil Plc, an oil explorer focused on Turkmenistan, said it’s considering an offer for BowLeven Plc, a driller working in Cameroon. BowLeven soared in London trading.

BowLeven shares jumped 62 percent to 120 pence, valuing the company at 353 million pounds ($559 million). That was the biggest gain since March 2009.

Dragon “notes the recent movement in BowLeven’s share price and confirms that it is in the preliminary stages of exploring a possible offer,” the Dubai-based company said in a statement. Dragon “would like to emphasize that there can be no certainty that any offer will ultimately be made.”

BowLeven confirmed it had seen the announcement of Dragon’s possible offer and said it would make its own announcement in due course.

Dragon, which had $1.5 billion in cash at the end of last year, is examining plans to join projects in Central Asia, Iraq and Africa, Chief Executive Officer Abdul Jaleel Al Khalifa said Jan. 23. Last year, the company joined a project in Tunisia to diversify into Africa.

BowLeven surged 60 percent on Oct. 14 after the Sapele-3 well discovered oil in the Douala Basin at the Etinde permit in Cameroon. It raised $124 million in a share sale on Oct. 19 with a 36 percent increase in ordinary stock capital to fund a drilling program this year.

“BowLeven has yet to achieve a clear plan for monetizing its full resource potential,” said Stuart Joyner, an analyst at Investec Securities in London. “We think more likely than not that BowLeven will partner and secure funding” for projects.

In August, Vitol Group, BowLeven’s partner in Cameroon, decided not to participate in the Sapele-3 exploration well drilling. Before the share sale the company had projected in September to hold about $60 million in cash post drilling the well.

BowLeven would need to invest at least $400 million to pump first oil and gas in 2015, CEO Kevin Hart said Sept. 14.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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