BowLeven Rises Most in Four Months on Accord With Petrofac
BowLeven Plc (BLVN), the U.K. oil explorer focusing on Cameroon, jumped the most in four months in London after finding a partner to help it develop a permit in the central African nation.
BowLeven rose 7.7 percent, the biggest gain since July 6, to 80.50 pence, valuing the Edinburgh-based company at 237 million pounds ($379 million).
Petrofac Ltd. (PFC), a U.K. oil and gas engineering company, agreed to provide BowLeven with access to as much as $500 million for the first stage of the development of the Etinde permit off Cameroon, BowLeven said today in a statement. The Scottish explorer plans to supply gas from the MLHP-7 block fields to Ferrostaal AG from 2016 to make fertilizers in the African country.
“It took us six month to consummate it,” Chief Executive Officer Kevin Hart said in a phone interview. “The working assumption is that the funding will cover all” of the first- stage development costs.
Vitol SA, one of the world’s largest oil traders, is BowLeven’s partner in the Etinde area.
“A lot of the value in here isn’t just in the gas it’s also in the liquids production as well,” Hart said. BowLeven will be marketing oil separately to the planned agreement with Ferrostaal.
BowLeven expects to finalize the gas sale agreement for about 70 million cubic feet a day to Ferrostaal by July next year, according to Hart. It may also supply as much as 15 million cubic feet a day to substitute fuel oil burning at a power station located nearby the fertilizer plant.
“The project offers Petrofac the opportunity to provide integrated services covering onshore and offshore facilities development, drilling services and training and operations,” Andy Inglis, of Petrofac Integrated Energy Services, said in a separate statement.
BowLeven plans to integrate the Sapele discoveries in the second phase of the Etinde project development. The area holds about 1.2 billion barrels of oil equivalent resources in the Deep Omicron deposit.
“It will be a relatively modest subsequent investment, because of the infrastructure that will be put in place,” Hart said. “We are probably looking at two or three wells, an unmanned platform and a pipeline.”
The oil explorer held about $120 million in cash and expects to receive about $60 million for drilling the IM-5 appraisal well on block MLHP-7, it said in a separate statement.
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