Cameroon partners re-align Etinde interests

Bowleven has agreed revised terms with Vitol E&P concerning the Etinde permit offshore Cameroon.

Offshore staff

EDINBURGH, Scotland -- Bowleven has agreed revised terms with Vitol E&P concerning the Etinde permit offshore Cameroon.

Under the new agreement, Vitol has an option to farm into 10% of block MLHP-7, Etinde, in return for funding a $50-million program of appraisal work. The arrangement does not extend to blocks MLHP-5 and MLHP-6, Etinde, where Bowleven currently is drilling the Sapele-1 exploration well.

Both parties are determining the scope of technical studies needed ahead of submitting a development and appraisal plan for the IE and IF field areas. Work is in progress to integrate the results of the recent IE-3 appraisal well and to process and interpret newly acquired 3D seismic over the IF field area.

The two companies currently have interests of 75% (Bowleven) and 25% (Vitol) in the Etinde Permit. If Vitol exercises its option, Bowleven’s interest in block MLHP-7 would drop to 65%.

Bowleven estimates it will have around $80 million of cash available for its 2011 program on completing Sapele-1 (excluding testing). This does not include proceeds of around $35 million from the disposal of EOV, offshore Gabon.  Once the remainder of the existing Vitol $100 million carry is exhausted, Vitol will continue to fund activities across the Etinde Permit in accordance with their existing 25 percent equity interest.

Ian Taylor, president and CEO of the Vitol Group said: “The principal focus of Vitol’s participation in Etinde is to move the existing discovered resource base towards development sanction. The extension to the option exercise date gives the joint venture additional time to evaluate the extensive data recently acquired from the IE-3 appraisal well and other activities, before agreeing the optimal next steps to progress the acreage towards development.”

10/04/2010

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