BowLeven Plc, a U.K. oil and gas explorer in West Africa, slumped to a 4 1/2-year low in London trading after agreeing to sell equity amid delays to a project in Cameroon.
The shares tumbled 20 percent to close at 42.3 pence, the lowest price since April 2009. The company’s market value dropped by 31 million pounds to 125 million pounds.
BowLeven conditionally agreed to sell as many as 11.8 million pounds ($18.8 million) of equity at 45 pence a share, it said today in a statement. That compares with yesterday’s closing price of 52.8 pence. It also may raise further funds from current and new investors.
BowLeven, trading almost 90 percent below its peak in 2011, has sought to sell stakes in licenses to bolster funds. The Edinburgh-based company has suffered from delays at a proposed fertilizer-plant project in Cameroon, which it plans to provide with gas.
“The addition of further flexibility remains a priority for the group,” Chief Executive Officer Kevin Hart said in the statement. “Active discussions are under way with a range of potential financial providers, and with a number of specific parties regarding potential farmouts.”
A decision on the fertilizer plant, scheduled to start operating in 2016, has been pushed back to the middle of next year from the end of 2013. The company, which previously said it was fully funded until the final investment decision, said today it had about $20 million in cash at the end of June and no debt.
BowLeven increased the resource estimate for the Etinde gas discovery that will feed the plant by 30 percent and said there are possibilities to use the fuel beyond the plant, which would be built by Germany’s Ferrostaal GmbH. U.K. oil-services company Petrofac Ltd. has agreed to help fund the project if it gets approval.