TIDMBLVN
RNS Number : 3092E
Bowleven plc
05 November 2020
5 November 2020
Bowleven plc ('Bowleven' or 'the Company')
Preliminary Results
Bowleven, the Africa focused oil and gas exploration group
traded on AIM, today announces its preliminary unaudited results
for the year ended 30 June 2020.
HIGHLIGHTS
Operational
Etinde, offshore Cameroon
-- Front End Engineering Design (FEED) contract awarded to
Technip in Q1 2020. Commencement was delayed until 1 July 2020 due
to the impact of the COVID-19 pandemic. This contract focuses on
the design and engineering of the onshore gas processing facility,
the IM well head platform and the appropriate production and sales
pipeline infrastructure.
-- FEED is expected to complete in November 2020 and is currently on time and within budget.
-- Work is also progressing on the sub-surface development plan,
including location, number and type of wells required to produce
wet gas from IM reservoirs.
Financial
-- The loss for the financial year was $2.6 million.
-- Bowleven closed the year with $9.1 million of cash and a
financial investment of $2.0 million, giving a total value of funds
of $11.1 million.
-- Having assessed the forecast cash expenditure to Financial
Investment Decision (FID) and the receipt of $25 million on FID
from the JV partners, the Company believes the Group has sufficient
funds to continue in operation for the foreseeable future until at
least FID, which is expected in 2021.
Corporate
-- Bowleven and New Age Ltd (New Age) have jointly appointed a
lead financial adviser, Cofarco, to manage raising investment
finance for the Etinde development.
-- The Etinde JV partners are in discussion with Société
Nationale des Hydrocarbures (SNH) and various other commercial
parties in respect of the sale of gas, Liquified Petroleum Gas
(LPG) and condensate.
-- The Group commenced closing its Employee Benefit Trust during
the year following the cessation of the Group's long-term incentive
plan (LTIP) and employee share option schemes.
-- E&Y resigned as auditor during the year. Following a
tender process, BDO was appointed to the role of auditor in the
interim and will be nominated to be reappointed at the forthcoming
annual general meeting (AGM).
Outlook
Key objectives are to deliver on a revised strategy in FY2021
which include:
-- Working with JV partners on FEED, Commercial and Finance
matters in respect of the Etinde development options with the aim
of Etinde project FID in 2021.
-- The JV partners propose to address the Etinde Exclusive
Exploitation Agreement (EEEA) licence duration as part of the FID
process regulatory submission to the Government of Cameroon. The
risk of the Etinde licence potentially expiring in January 2021 is
considered low to medium at the current time.
-- Disciplined capital management to secure progress towards FID
and thereafter explore funding options regarding development
capital.
Eli Chahin, Chief Executive Officer of Bowleven plc, said:
"Our focus in 2021 will be to work with all of our stakeholders
to ensure FID is achieved and underpinned by a compelling
development plan, which is suitably robust to secure future capex
funding. This combined with a disciplined approach to capital
management will ensure that we are able to deliver maximum value
for the Company's shareholders."
As previously announced, Bowleven intends to host a conference
call for shareholders to go through the Company's 2020 Preliminary
Results. This is now planned for 12pm on Monday 9 November
2020.
If you would like to participate in the call, please contact
Ollie Mills at Celicourt Communications via email at
OMills@celicourt.uk .
ENQUIRIES
For further information, please contact:
Bowleven plc
Eli Chahin, Chief Executive 00 44 203 327 0150
Celicourt Communications Ltd
Mark Antelme 00 44 208 434 2643
Jimmy Lea
Shore Capital (NOMAD and Broker)
Robert Finlay 00 44 207 408 4090
Antonio Bossi
This announcement may include statements that are, or may be
deemed to be "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"anticipates", "projects", "expects", "intends", "may", "will",
"seeks" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions.
These forward-looking statements include all matters that are not
historical facts. They include statements regarding the Company's
intentions, beliefs or current expectations concerning, amongst
other things, the results of operations, financial conditions,
liquidity, prospects, growth and strategies of the Company and its
direct and indirect subsidiaries (the "Group") and the industry in
which the Group operates. By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future. Forward-looking statements are not guarantees of future
performance. The Group's actual results of operations, financial
conditions and liquidity, and the development of the industry in
which the Group operates, may differ materially from those
suggested by the forward-looking statements contained in the
announcement. In addition, even if the Group's results of
operations, financial conditions and liquidity, and the development
of the industry in which the Group operates, are consistent with
the forward-looking statements contained in the announcement, those
results or developments may not be indicative of results or
developments in subsequent periods. In light of those risks,
uncertainties and assumptions, the events described in the
forward-looking statements in the announcement may not occur. Other
than in accordance with the Company's obligations under the AIM
Rules for Companies and the Market Abuse Regulations, the Company
undertakes no obligation to update or revise publicly any
forward-looking statement, whether as a result of new information,
future events or otherwise. All written and oral forward-looking
statements attributable to the Company or to persons acting on the
Company's behalf are expressly qualified in their entirety by the
cautionary statements referred to above and contained elsewhere in
the announcement.
Notes to Editors:
Bowleven plc is an African focused oil and gas group, based in
London and traded on AIM. It is dedicated to realising material
shareholder value from its asset in Cameroon, whilst maintaining
capital discipline and employing a rigorously selective approach to
other value-enhancing opportunities.
Bowleven holds a strategic equity interest in the offshore,
shallow water Etinde permit (operated by NewAge) in Cameroon.
CHAIRMAN & CEO STATEMENT
a strong case for development
2020 was a pivotal year for our company and we are well
positioned to be a leading Cameroon oil and gas producer. Whilst we
still have some work to do, our field is expected to prove worthy
of its world class title.
Dear Shareholders,
2020 has been a milestone year, both for society and for our
industry. The onset of COVID-19 resulted in widespread global
medical and economic issues. Coupled with the Opec oil price war,
further pressure was made on an already tight oil price
environment. We expect to see continued pressure as more developed
economies focus on adopting to a lower carbon future.
At an industry level, the short-term environment remains
uncertain and turbulent, with the absence of any meaningful market
equilibrium leading to significant challenges to our thinking as
executives. This market dislocation was very publicly illustrated
when, in April this year, WTI contracts traded at negative prices
for the first time in history.
Several difficult-to-judge demand and supply catalysts remain
precariously poised to contribute to continued market volatility in
the near term. In these circumstances, final investment decisions
are being delayed/deferred and the sanctioning of higher-cost
projects remains under significant pressure. Today's
underinvestment will invariably lead to a future rebalancing of the
oil and gas market and we remain confident that shareholder
patience will be rewarded. Given Etinde will produce natural gas
and condensates, from an environmental and oil price volatility
perspective, we continue to believe there is strong investment
rationale for developing the asset. The Company continues to place
great importance on addressing environmental, social and governance
issues and is pleased to update on these matters further, later in
the document.
At an operational level, we, along with our partners, have
adapted to the current impact of the pandemic. We placed the
welfare of our employees at the top of the list of priorities and
implemented work-from-home practices to keep our workforce safe. As
a result of the travel bans, office closures and 'social
distancing' measures, the Etinde JV, which included our FEED
contractor Technip, effectively started running its processes and
projects entirely virtually - meaning remote management
presentations, virtual due diligence and online question and answer
forums. So far that approach has been relatively successful,
although some slippage in the Etinde timetable was inevitable, as
the various parties adjusted to remote ways of working. With no
physical data rooms and communal workstations to verify seismic and
geological data, the absence of face-to-face negotiations was
always going to give rise to delays. Further, as we enter
commercial negotiations with our various stakeholders the need to
finalise the incremental development and phasing of development on
the Etinde Permit is our pressing priority.
In February 2020, we were very pleased to see the signing of a
non-binding Letter of Intent (LOI) between Victoria Oil & Gas
Plc (AIM: VOG) and New Age, for the supply of gas from the Etinde
Field. This LOI has the potential to lead to a Gas Supply Agreement
(GSA) further down the line, as the project evolves. This event
marks a considerable step forward regarding the commercialisation
of the licence.
During March 2020, Technip was appointed to the role of Front
End Engineering Design (FEED) contractor, to lead the onshore and
offshore elements of the first phase of the field development
programme. The reservoir engineering and sub-surface development
aspects of the wider FEED process continue to be undertaken by our
partner, New Age, as Operator. We are also fortunate to benefit
from the extensive support provided by LUKOIL and our host
Government of Cameroon. The initial phase of the development
concept proposed by the JV partners comprises an onshore gas
processing, storage and export facility linked to an unmanned well
head platform with associated pipeline infrastructure.
On the financial side, Bowleven continues to benefit from a
robust balance sheet, with a cash balance of $7.4 million as at 30
October 2020. The Company also continues to operate in a lean
fashion, with a very low G&A spend compared with its peers in
the space. Also, it is important to note that we will receive a
payment of $25 million from the JV partners once FID is achieved,
which, as before, we now expect to be in 2021.
In mid-2020, a Paris-based financial advisory firm, Cofarco, was
appointed by Bowleven and New Age to support the process of
obtaining financing for the project. Discussions will likely
advance alongside completion of the FEED work, with a range of
potential senior debt providers. Engagement continues with the
Government of Cameroon on a range of environmental, fiscal and
regulatory matters with a view to obtaining the consents and
agreements necessary to be in a position to reach a final
investment decision in 2021 at the latest. Delays have been on
account of several factors, most notably ensuring the most economic
plan meets with stakeholder consensus, the impact of the COVID-19
pandemic on the various workstreams (both in and outside Cameroon),
and the geological work with regard to IE which is ongoing. Our
efforts have been continuing to accelerate whatever is feasible to
do so with a view to ensure the field development plan is that
which delivers the best value accretion.
Environmental, Social, and Health Impact Assessment (ESHIA) is
critical to the JV and particularly for a project of this size for
the country of Cameroon. This work is progressing with relevant
international standards being part of FEED. This is in combination
with our corporate social responsibilities (CSR) responsibilities
on account of which the JV has donated medical equipment to two
local hospitals in Douala and Limbe in relation to the fight
against COVID-19.
Stakeholder engagement is encouraging and has become an
increasingly important project requirement, with heightened
expectations from governments and lending institutions. The
integration of these factors into project decision-making will be a
key success factor to the delivery of long-term project value.
Due to the delays caused by the outbreak of COVID-19 and despite
significant operational progress being made this year, an FID on
Etinde is now expected during 2021. Notwithstanding this somewhat
minor delay in timing, the Company remains confident that the
current trajectory will generate value for all Bowleven
stakeholders once our efforts are realised.
In December 2020, Matt MacDonald, Chairman, will step down from
the Board following his three-year contract tenure and we have
secured a high calibre individual to replace him. We welcome Jack
Arnoff as a Non-Executive member of the Board. The Company would
like to thank Matt for his significant contribution throughout his
stewardship which has been key to imposing the capital and cost
discipline to assist the Company in funding its way to FID. We wish
him well. A process is ongoing and a replacement Chairman will be
named in due course. Given our continued focus on corporate costs,
we are content with the size of the reduced Board and don't feel
further Board expansion is needed to secure FID.
OUTLOOK
As the technical engineering phase of the Etinde FEED approaches
conclusion at end of the calendar year, our immediate focus will be
on the commercial, fiscal and financing elements of the project.
Engagement with the Government of Cameroon on a range of
operational, fiscal and regulatory matters has commenced alongside
socialisation of the concept select report which had been tabled
early in February 2020.
Having regard to the current spot price for Brent crude hovering
around $40 per barrel in October 2020, and the cost efficiencies
realised through the FEED process, the economics of Etinde is such
that the capital returns are suitably robust to be sanctioned in
the current environment, assuming the required capital investment
can be secured.
The current industry under-investment, instigated by the demand
slump and low commodity prices, would suggest that the timing to
first gas production for Etinde in 2023/24 offers a favourable
point in the investment cycle. As ever, the economic investment
case of the Etinde project remains strong, with the Company's
interest in the Etinde project alone having a value of $150 million
(as per 2019 valuation model). Well above the Group's current
market capitalisation.
The importance of the development of Etinde to our shareholders
serves to keep the Board and executive team focused at this
challenging time for the industry. We are in active discussions
with stakeholders to mitigate the funding challenges to secure the
first extraction of molecules in a capital efficient way to enable
project sanctioning.
The Board believes that the production and cash flow from the
Etinde project, when combined with our existing unleveraged balance
sheet, will deliver significant value for our investors, secure the
long-term sustainability of the Company, and secure sufficient
flexibility to further grow our business into the coming
decade.
Eli Chahin Matt McDonald
Chief Executive Officer Chairman
4 November 2020 4 November 2020
Group Income Statement
for the year ended 30 June 2019
Audited
Unaudited Restated
2020 2019
$000 $000
======================================== ==== ========== ============
Revenue - -
Administrative expenses (3,260) (5,012)
Impairment charge - (62,007)
---------------------------------------------- ---------- ------------
Operating loss before financing costs (3,260) (67,019)
Finance and other (expense)/income 635 458
---------------------------------------------- ---------- ------------
Loss from continuing operations before
taxation (2,625) (66,564)
Taxation - -
---------------------------------------- ---- ---------- ------------
Loss for the year (2,625) (66,564)
---------------------------------------------- ---------- ------------
Basic and diluted loss per share
($/share) (0.01) (0.20)
----------------------------------------- --- ---------- ----------
Statements of Comprehensive Income
for the year ended 30 June 2020
Group
Audited
Unaudited Restated
2020 2019
$000 $000
========================================== =========== ========== ==========
Loss for the year (2,625) (66,564)
------------------------------------------------------ ---------- ----------
Prior year adjustment - IFRS 16 adoption (5) 8
Other Comprehensive Income:
Items that will be reclassified to
profit and loss:
Currency translation differences - -
------------------------------------------ ----------- ---------- ----------
Total comprehensive loss for the year (2,630) (66,556)
---------------------------------------------- ------ ----------- ----------
Group Balance Sheet
30 June 2020
Audited
Unuadited Restated
2020 2019
$000 $000
=============================== === ========== ==========
Non-current assets
Intangible exploration assets 152,104 150,000
Property, plant and equipment 67 107
------------------------------------ ---------- ----------
152,171 150,107
Current assets
Financial investments 2,010 4,134
Inventory 2,577 1,545
Trade and other receivables 1,272 1,852
Deferred consideration - -
Bank deposits - 500
Cash and cash equivalents 9,102 10,482
------------------------------------ ---------- ----------
14,961 18,513
----------------------------------- ---------- ----------
Total assets 167,132 168,620
------------------------------------ ---------- ----------
Current liabilities
Trade and other payables (1,478) (411)
Lease liabilities (34) (36)
------------------------------------ ---------- ----------
(1,512) (447)
Long term Liabilities
Lease liabilities (2) (37)
------------------------------------ ---------- ----------
Total liabilities (1,514) (484)
------------------------------------ ---------- ----------
Net assets 165,618 168,136
------------------------------------ ---------- ----------
Equity
Called-up share capital 56,517 56,517
Share premium 1,599 1,599
Foreign exchange reserve (69,857) (69,857)
Other reserves 2,927 2,354
Retained earnings 174,432 177,523
------------------------------------ ---------- ----------
Total equity 165,618 168,136
------------------------------------ ---------- ----------
Company Balance Sheet
30 June 2020
Audited
Unaudited Restated
2020 2019
$000 $000
=================================== === ========== ==========
Non-current assets
Property, plant and equipment 67 106
Investments in Group undertakings 145,099 145,099
---------------------------------------- ---------- ----------
145,166 145,205
Current assets
Financial investments 2,010 4,134
Trade and other receivables 8,090 5,127
Bank deposits - 500
Cash and cash equivalents 9,088 10,476
---------------------------------------- ---------- ----------
19,188 20,237
--------------------------------------- ---------- ----------
Total assets 164,354 165,442
---------------------------------------- ---------- ----------
Current Liabilities
Trade and other payables (230) (204)
Lease liabilities (34) (36)
---------------------------------------- ---------- ----------
(264) (240)
Long term Liabilities
Lease liabilities (2) (37)
---------------------------------------- ---------- ----------
Total Liabilities (266) (277)
---------------------------------------- ---------- ----------
Net assets 164,088 165,165
---------------------------------------- ---------- ----------
Equity
Called-up share capital 56,517 56,517
Share premium 1,599 1,599
Foreign exchange reserve (147,715) (147,715)
Other reserves (2,310) (2,883)
Retained earnings 255,997 257,647
---------------------------------------- ---------- ----------
Total equity 164,088 165,165
---------------------------------------- ---------- ----------
The Company has elected to take the exemption under section 408
of the Companies Act 2006 to not present the individual parent
undertaking Income Statement. The result for the Company for the
year was a loss of $1,184,000 (2019: loss of 77,926,000).
Group Cash Flow Statement
for the year ended 30 June 2020
Audited
Unaudited Restated
2020 2019
$000 $000
============================================= === ========== ==========
Cash flows from operating activities
Loss before tax (2,625) (66,564)
-------------------------------------------------- ---------- ----------
Adjustments to reconcile Group loss before tax to net cash used
in operating activities:
Depreciation of property, plant and
equipment 50 78
Impairment charge - 62,007
Non-cash operating costs - 1,080
Inventory impairment - 150
Finance (income)/expense (635) (458)
Equity-settled share based payment
transactions 112 151
Profit on disposal of financial investments (7) -
Profit/Loss on sale of property, plant
and equipment (3) 24
-------------------------------------------------- ---------- ----------
Adjusted loss before tax prior to
changes in working capital (3,108) (3,532)
Decrease/(Increase) in trade and other
receivables 58 207
(Decrease) in trade and other payables (23) (383)
Net cash used in operating activities (3,073) (3,708)
Cash flows from investing activities
Purchases of property, plant and equipment (11) (22)
Purchases of intangible exploration
assets (1,602) (1,380)
Receipts from sale of financial investments 2,500 14,043
Transfer from bank deposits 500 -
Receipts from sale of property, plant
and equipment - 12
Dividends received 259 388
Interest received 87 1,597
-------------------------------------------------- ---------- ----------
Net cash from investing activities 1,733 14,638
Cash flows from/(used in) financing
activities
Lease payments (40) (40)
Special dividend paid - (63,142)
-------------------------------------------------- ---------- ----------
Net cash Flows from/(used in) financing
activities (40) (63,182)
Net decrease in cash and cash equivalents (1,380) (52,252)
-------------------------------------------------- ---------- ----------
Cash and cash equivalents at the beginning
of the year 10,482 62,734
Effect of exchange rates on cash and
cash equivalents - -
Net decrease in cash and cash equivalents (1,380) (52,252)
================================================== ========== ==========
Cash and cash equivalents at the year
end 9,102 10,482
Company Cash Flow Statement
for the year ended 30 June 2020
Audited
Unaudited Restated
2020 2019
$000 $000
--------------------------------------------- --- ---------- ----------
Cash Flows from Operating Activities
Loss before tax (1,184) (77,926)
-------------------------------------------------- ---------- ----------
Adjustments to reconcile Company loss before tax to net cash
used in operating activities:
Depreciation of property, plant and
equipment 49 76
Impairment of investment - 76,659
Finance (income)/expense (645) (394)
Equity-settled share based payment
transactions 112 151
Profit on disposal of financial investments (7) -
--------------------------------------------- --- ---------- ----------
Adjusted loss before tax prior to
changes in working capital (1,675) (1,434)
(Increase) in trade and other receivables 15 (307)
Decrease in trade and other payables 10 (352)
Net (Cash used) in operating activities (1,650) (2,093)
Cash flows from investing activities
Proceeds from sale of financial investments 2,500 14,043
Purchases of property, plant and equipment (11) (22)
Increse in inter-company funding (3,033) (2,955)
Transfer from bank deposits 500 -
Dividends received from financial
investments 259 388
Interest received 87 1,597
-------------------------------------------------- ---------- ----------
Net Cash from investing activities 302 13,051
-------------------------------------------------- ---------- ----------
Cash flows (used in)/from financing
activities
Lease payments (40) (40)
Special dividend paid - (63,142)
-------------------------------------------------- ---------- ----------
Net cash flows (used in)/from financing
activities (40) (63,182)
Net decrease in cash and cash equivalents (1,388) (52,224)
-------------------------------------------------- ---------- ----------
Cash and cash equivalents at the beginning
of the year 10,476 62,700
Effect of exchange rates on cash and
cash equivalents - -
Net decrease in cash and cash equivalents (1,388) (52,224)
-------------------------------------------------- ---------- ----------
Cash and cash equivalents at the year
end 9,088 10,476
-------------------------------------------------- ---------- ----------
Note
The increase in inter-company funding to subsidiaries has been
reclassified from a movement in working capital to an investing
activity. The 2019 comparatives have been adjusted accordingly
Group Statement of Changes in Equity
for the year ended 30 June 2020
Foreign
Called-up exchange Other Retained Total
share capital Share Premium reserve reserves earnings equity
$000 $000 $000 $000 $000 $000
At 1 July 2018 56,517 1,599 (69,857) 1,076 308,290 297,625
IFRS 16 adoption - - - - 2 2
At 1 July 2018 as restated 56,517 1,599 (69,857) 1,076 308,292 297,627
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
Loss for the year - - - - (66,564) (66,564)
IFRS 16 adoption - - - - 8 8
Other comprehensive income for - - - - - -
the year
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
Total comprehensive income for
the year - - - - (66,556) (66,556)
Special dividend payment - - - - (63,142) (63,142)
Share based payments - - - 207 - 207
Transfer between reserves - - - 1,071 (1,071) -
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
At 30 June 2019 audited 56,517 1,599 (69,857) 2,354 177,523 168,136
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
Loss for the year - - - - (2,625) (2,625)
IFRS 16 adoption - - - - (5) (5)
Other comprehensive income for
the year - - - - - -
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
Total comprehensive income for
the year - - - - (2,630) (2,630)
Share based payments - - - 112 - 112
Transfer between reserves - - - 461 (461) -
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
At 30 June 2020 unaudited 56,517 1,599 (69,857) 2,927 174,432 165,618
-------------------------------- --------------- ---------------- ---------- ---------- ---------- ---------
Company Statement of Changes in Equity
for the year ended 30 June 2020
Foreign
Called-up exchange Other Retained Total
Attributable to Owners of Parent share capital Share premium reserve reserves earnings equity
Company $000 $000 $000 $000 $000 $000
At 1 July 2018 56,517 1,599 (147,715) (2,446) 398,789 306,744
IFRS 16 adoption - - - - 4 4
At 1 July 2018 as restated 56,517 1,599 (69,857) (2,446) 398,793 306,748
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
Loss for the year - - - - (77,926) (77,926)
IFRS 16 adoption - - - - 8 8
Other comprehensive income for the
year - - - - - -
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
Total comprehensive income for the
year - - - - (77,918) (77,918)
Special dividend payment - - - - (63,142) (63,142)
Share based payments: Transfer from
subsidiary
undertaking - - - (1,715) 989 (726)
Share based payments - - - 207 - 207
Transfer between reserves - - - 1,071 (1,071) -
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
At 30 June 2019 audited 56,517 1,599 (147,715) (2,883) 257,647 165,165
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
Loss for the year - - - - (1,184) (1,184)
IFRS 16 adoption - - - - (5) (5)
Other comprehensive income for the
year - - - - - -
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
Total comprehensive income for the
year - - - - (1,189) (1,189)
Share based payments - - - 112 - 112
Transfer between reserves - - - 461 (461) -
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
At 30 June 2020 unaudited 56,517 1,599 (147,715) (2,310) 255,997 164,088
-------------------------------------- --------------- -------------- ---------- ---------- ---------- ---------
NOTES TO THE PRELIMINARY FINANCIAL STATEMENTS
For the year ended 30 June 2020
(1) Accounting Policies
Basis of preparation
The financial information in the preliminary financial
statements has been extracted from the statutory accounts which
have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union (EU)
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention as modified by the
revaluation of certain financial assets and liabilities (including
derivative instruments).
The preliminary announcement has been prepared on a basis
consistent with the accounting policies applied to the statutory
accounts for the year ended 30 June 2020 with the one exception.
IFRS 16 "Leases" was adopted for the first time in the current
year. As a result the prior period balance sheet has been restated
to reflect this change from 1 July 2018 onwards.
These financial statements are presented in US Dollars, the
Group's presentation and functional currency, rounded to the
nearest $000.
The disclosed figures are not statutory accounts in terms of
section 434 of the Companies Act 2006. The statutory accounts give
full disclosure of the Group accounting policies and will be
published as soon as they are available. The 30 June 2020 annual
results presented here are unaudited and the auditor is expected to
issued an un-modified opinion, and containing no statement under
section 498 (2) and (3) of the Companies Act 2006.
On the statutory accounts for the year ended 30 June 2019, the
auditor gave an unqualified opinion that contained an emphasis of
matter drawing attention to significant uncertainties related to
valuation of intangible assets and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006. The
statutory accounts for the year ended 30 June 2019 have been filed
with the Registrar of Companies.
Going concern
Calendar 2020 has seen very significant additional
macro-economic uncertainty developing due to both the prices and
global demand for oil, gas and products due to global market
conditions combined with the results from the ongoing COVID-19
(coronavirus) pandemic. The scale and duration of these
developments remain uncertain but could impact our earnings, cash
flow and financial condition in future periods.
After making enquiries, the Directors are satisfied that the
Group has adequate resources to continue in operational existence
for the foreseeable future at least 12 months from the date of
signing this report. Accordingly, the financial statements have
been prepared on a going concern basis as the Directors are of the
opinion that the Group has sufficient funds to meet ongoing working
capital and committed capital expenditure requirements. The
Directors have considered the likelihood of reaching FID in 2021
and the consequent need to raise additional financing. In this
scenario, the Group is due to receive a $25m cash payment from its
JV partners at FID. The Directors are satisfied that the Group
would be able to secure additional debt and equity funding in order
to finance its share of the Etinde development. The directors
consider that the risk of the Government of Cameroon removing the
Etinde the PSC contract from the Etinde Joint Venture partners Is
low to medium at the current time, for the following reasons:
-- The issue of the January 2021 date has not been raised as a
formal concern by SNH and SNH has approved all annual work
programmes and budgets up to and incuding the year ending 31
December 2020;
-- With SNH approval we have commenced FID and intend to move to
FID and a significant in the near term followed by the Development
of the Etinde licence; and
-- We will request the Government to eliminate this uncertainty
as part of the FID regulatory approval process.
However, should FID not happen in the near term, then the risk
of Licence removal will increase. In this scenario, the Directors
are satisfied that the Group has sufficient existing financial
resources in place to meet its operating costs for at least 12
months from the date of approval of these accounts.
(2) Other Notes
a) The loss attributable to ordinary shares and the number of
ordinary shares for the purpose of calculating the diluted earnings
per share are identical to those used in the basic earnings per
share. The exercise of share options or warrants would have the
effect of reducing the loss per share and consequently are not
taken into account. In the prior year, the loss attributable to
ordinary shares and the number of ordinary shares for the purpose
of calculating the diluted earnings per share were identical to
those used in the basic earnings per share.
b) Directors have not recommended a dividend (2019: nil).
c) As at 30 June 2020 there is a current financial asset of $nil
(2019: $nil) arising from the Etinde farm-out. The amount relates
to the remaining deferred consideration relating to the appraisal
drilling carry.
d) As at 30 June 2020, a contingent asset of $25 million is
disclosed for the FID consideration relating to the Etinde farm-out
and will be credited to intangible exploration assets once further
clarity around Etinde project sanction/FID is obtained.
(3) 2020 Annual Report and Accounts
Full accounts are scheduled to be posted 16 November to
shareholders who elected to continue to receive a hard copy report
and can be obtained free of charge, at the Company's registered
office, 50 Lothian Street, Edinburgh, EH3 9WJ for a period of one
month after publication. For shareholders who opted to receive the
annual report electronically, notification will be provided when
the annual report is available to access from the company website
www.bowleven.com .
GLOSSARY
ABI Association of British Insurers
AGM annual general meeting
AIM the market of that name operated by the London
Articles of Association Stock Exchange
the internal rules by which a company is governed
bbl barrel of oil
bcf or bscf billion standard cubic feet of gas
Board of Directors the Directors of the Company
boe barrels of oil equivalent
Bomono Permit the production sharing contract between the
Republic of Cameroon and EurOil Limited, dated
12 December 2007, in respect of the area of
approximately 2,328km(2) comprising former
blocks OLHP-1 and OLHP-2 onshore Cameroon;
or, as the context may require, the contract
area to which that production sharing contract
relates
Bowleven Bowleven plc (LSE: BLVN) and/or its subsidiaries
as appropriate
CFA Central African CFA Francs
Companies Act 2006 the United Kingdom Companies Act 2006 (as amended)
('the Act')
Company Bowleven plc
CPR Competent Persons Report
contingent resources those quantities of hydrocarbons that are estimated
to be potentially recoverable from known accumulations,
but which are not currently considered to be
commercially recoverable
CSOP Company share option plan
EBT employee benefit trust
Etinde Permit the Etinde Exploitation Authorisation (EA)
area. The Etinde EA, granted on 29 July 2014,
covers an area of approximately 461km(2) (formerly
block MLHP-7) and is valid for an initial period
of 20 years with an initial 6 year period ending
January 2021, by which time development must
commence. SNH have informed the JV of their
intention to exercise their right to back into
this licence but have not signed the Participation
Agreement and funded their share of cash calls
in accordance with the requirements set out
in the PSC.
EurOil EurOil Limited, an indirectly wholly-owned
subsidiary of Bowleven plc, incorporated in
Cameroon
FID final investment decision
FLNG floating liquefied natural gas
G&A general and administration
GIIP gas initially in place
Government Cameroon Government
Group the Company and its direct and indirect subsidiaries
HSSE health, safety, security and environment
IAS International Accounting Standards
IFRS International Financial Reporting Standards
IM the Isongo Marine Field area, Etinde Permit
JV joint venture an unincorporated joint operation.
Joint Venture Partners are the financial investors
who jointly own and operated the unincorporated
joint operations
km(2) square kilometres
LNG liquefied natural gas
LUKOIL LUKOIL Overseas West Project Ltd, a subsidiary
undertaking of OAO LUKOIL
mmboe million barrels of oil equivalent
mmscfd million standard cubic feet of gas per day
mscfd thousand standard cubic feet of gas per day
NewAge New Age (African Global Energy) Limited, a
privately owned oil and gas company
ordinary shares ordinary shares of 10p each in the capital
of the Company
PSC production sharing contract
P50 50% probability that volumes will be equal
to or greater than stated volumes
P90 90% probability that volumes will be equal
to or greater than stated volumes
Q1, Q2 etc. first quarter, second quarter etc.
SNH Société Nationale des Hydrocarbures,
the national oil and gas company of the Republic
of Cameroon
tcf trillion cubic feet
US United States of America
VOG Victoria Oil & Gas Plc
2D two dimensional
$ or US Dollars, USD United States of America Dollars
GBP or GB Pounds, Great Britain Pounds Sterling
GBP
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END
FR USVKRRAUARAA
(END) Dow Jones Newswires
November 05, 2020 02:00 ET (07:00 GMT)
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