BowLeven Announces Possible FirstAfrica Offer

BowLeven said that it has approached the board of FirstAfrica Oil PLC with the outline terms of a possible offer for the entire issued and to be issued ordinary share capital of FirstAfrica.

The Board of FirstAfrica has indicated its support for the principles of the Proposed Offer. The suspension of FirstAfrica's ordinary shares from trading on AIM was announced on 9 November 2006 pending clarification of FirstAfrica's financial position.

BowLeven believes the Proposed Offer offers attractive value for FirstAfrica shareholders.

BowLeven holds interests in three blocks offshore Cameroon, one of the most attractive oil and gas exploration areas in West Africa, and has substantial experience within its management team of developing offshore upstream oil and gas projects. There is clear logic in combining the asset portfolios of BowLeven and FirstAfrica and using BowLeven's existing financial resources and additional financing to be raised by BowLeven to bring, in particular, FirstAfrica's East Orovinyare Oil Field offshore Gabon into production.

The Proposed Offer

Subject to the satisfaction or waiver of the pre-conditions set out below, and on the terms and conditions to be set out in any firm offer announcement, BowLeven is prepared to make an offer of one BowLeven ordinary share for every 190 ordinary FirstAfrica shares.

The Proposed Offer values the existing issued share capital of FirstAfrica at approximately 30.2 million based on the closing price of 214.5 pence per BowLeven share on 14 November 2006.

This represents a premium of 25.4 per cent. to the price of 0.9 pence per FirstAfrica share at the point the ordinary shares of FirstAfrica were suspended from trading on AIM on 9 November 2006 and a premium of 21.4 per cent. to the average closing price of 0.93 pence per FirstAfrica share for the 30 calendar days ending on 9 November 2006.

Pre-conditions

The pre-conditions to the Proposed Offer include:

  • completion of confirmatory due diligence to the satisfaction of BowLeven;
  • BowLeven raising the appropriate financing for the enlarged group; and
  • the formal recommendation of the Proposed Offer by the FirstAfrica Board.

BowLeven reserves the right to waive, in whole or in part, any of the above pre-conditions at its discretion. In the event that BowLeven were to acquire FirstAfrica it would assume its assets and liabilities at completion.

Other matters

BowLeven also intends to make appropriate offers to the holders of options.

This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the City Code on Takeovers and Mergers (the "Code"). Accordingly, there can be no certainty that any offer will ultimately be made, even if the pre-conditions to the Proposed Offer are satisfied or waived.

In accordance with Rule 2.10, BowLeven confirms that it has 34,044,925 ordinary shares of 10p each in issue with ISIN GB00B04PYL99.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of BowLeven or of FirstAfrica, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of BowLeven or of FirstAfrica, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of BowLeven or of FirstAfrica or any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk .

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.

BowLeven is an African oil and gas group, based in Edinburgh and traded on AIM. BowLeven holds interests in three blocks offshore Cameroon, one of the most attractive oil and gas exploration areas in West Africa. BowLeven has operated in Cameroon since 1999.

Jefferies International Limited ("Jefferies International") which is regulated in the United Kingdom for the conduct of investment business by the Financial Services Authority, is acting for BowLeven as financial adviser in connection with the matters set out herein and no-one else and will not be responsible to anyone other than BowLeven for providing the protections afforded to customers of Jefferies International, nor for providing advice in relation to the matters described herein.

Hoare Govett Limited ("Hoare Govett") which is regulated in the United Kingdom for the conduct of investment business by the Financial Services Authority, is acting for BowLeven as corporate broker in connection with the matters set out herein and no-one else and will not be responsible to anyone other than BowLeven for providing the protections afforded to customers of Hoare Govett, nor for providing advice in relation to the matters described herein.

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