Spreadbetting 2005

www.oilbarrel.com

20.12.2005

BowLeven Due To Start Cameroon Seismic Campaign In February Ahead Of Four-Well Programme in Late 2006 But No News Yet From Bachuo-1
BowLeven plans to start its exploration effort over blocks MLHP-5 and MLHP-6, part of its Etinde permit offshore Cameroon, in February 2006. The AIM-quoted firm has hired Veritas to undertake a 700 sq km shoot over the shallow water areas and Western Geco to shoot 350 sq km over the deeper waters to the west. The market reaction to the news was not positive, and investors will be hoping these blocks yield better results than this year’s disappointing exploration efforts on block MLHP-7.

BowLeven will use the new seismic data to line up some drillable prospects for its 2006/7 drilling campaign. It has contracted GlobalSantaFe’s Adriatic VI for a four-well programme, due to kick off in November 2006, with a mix of exploration and appraisal wells planned.

In all, the 3D seismic and drilling campaign adds up to plenty of news flow over 2006 and 2007 but investors are bound to be wary. In October 2005 the company announced its Manyikebi-1 well in MLHP-7 was dry and the shares crashed. Small companies often suffer over-reactions to dry holes but this reaction was compounded because the duster came hot on the heels of an institutional placing priced at £6.50 per share that raised £53 million.

Manyikebi-1, which was targeting the shallow Biafra sands, encountered high quality sands and some 40 ft of net gas pay - but no oil. Prior to drilling, the company had hoped the target sands could hold oil and gas reserves equivalent to 300 million barrels of oil. The results were a set back for the company’s technical analysis of the Biafra sands and the well was plugged and abandoned as a small gas discovery.

The company is still drilling ahead with the follow-up to Manyikebi-1. Bachuo-1 is targeting an Upper Isongo gas/condensate prospect thought to hold several potential gas/condensate bearing reservoirs. Pre-drill estimates talked of 2.5 trillion cubic feet of gas and some 400 million barrels of oil, numbers that will have to be proved by the drillbit. The disappointment of the Biafra sands is not thought to have any bearing on the prospectivity of the Upper Isongo sands. The well is being drilled under tight hole conditions and BowLeven expects to make an announcement early in the New Year.

In the meantime, the company has taken steps to strengthen its management team. In December it announced that former Chevron and Sasol executive Jerry Anthony, who has considerable experience in the Gulf of Guinea, would be joining the company as exploration director. John Morrow, a former project director of BG Group, has been appointed to the board as technical director along with two non-executives, ex-Premier Oil executive Steve Lowden and former Shell International director Robert Walvis (who will add the role of non-exec chairman on Terry Heneaghan’s retirement in July 2006).