Bowleven’s operating loss in the year ended June 30 widened to $87.8 million (operating loss 2014: $12.0 million) as the company pledged to carry out “significant” operational activity in 2016.
Despite the energy firm’s operating loss, it retains cash balance as at end June of $145.3 million, following the completion of a farm-out deal of the Etinde permit, located offshore Cameroon, to Lukoil and NewAge. On completion of the Etinde farm-out transaction in March, Bowleven received $165 million in cash and a subsequent $5 million cash for working capital. Out of this amount, $9 million was paid to Petrofac for the termination of the previously announced Strategic Alliance Agreement intended to facilitate the development and funding of Etinde on a stand-alone basis. Capital expenditure cashflows during the period were $35.1 million (2014: $18.0 million).
Bowleven plans to work alongside the expanded Etinde joint venture to commence drilling as soon as possible to further appraise the potential of the Intra Isongo reservoirs. As well as evaluating early phase exploration activities in Kenya and Zambia, the company also plans to complete an extended well testing program at its Bomono Permit in Cameroon, in order to determine well deliverability, and will consider further investment opportunities, albeit with a “disciplined approach”.
Kevin Hart, chief executive of Bowleven plc, commented in a company statement:
“Following completion of the Etinde farm-out we are well positioned with a strong financial foundation to deliver on our strategic objectives…The sustained low oil price has created a challenging environment for exploration and production companies and we have taken the time to examine our current cost base to ensure that it is right-sized for current plan, and our strategic objectives.”
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