Perenco will not go ahead with its pursuit of the Etinde asset, throwing the project – and Bowleven’s future – into doubt.
Bowleven reported that Perenco had sent a notice of termination to New Age (African Global Energy). Perenco struck the deal in mid-2022 to buy out New Age at the Cameroon project for an undisclosed amount. Perenco declined to comment.
The long stop date was in July 2023.
Bowleven CEO Eli Chahin said the termination of the deal was “unfortunate as we believed it could have represented an opportunity to accelerate development progress at Etinde”.
The company will now have to reconsider the proposed development plan at the project with the partners, Chahin said, “to assess the efforts now required to secure FID. We will update shareholders in relation to Etinde developments in due course.”
Bowleven has begun discussions, the company said. In December, at its AGM, Bowleven said the problem in progressing the deal had been approval from the Cameroon government.
Cash squeeze
The company had pared back spending in order to prioritise survival while it waited for approval. In 2023, it set out plans to raise funds. However, the fundraising hinged on the Perenco deal. As the deal got bogged down, there was a “very significant reduction in the proposed offer price”.
As of the end of October, Bowleven had $1 million in cash. Its spending in 2022-23 was $1.8mn and as such the company had to declare going concern issues. The company said it needed $2-3mn to sustain it to reach the closing of the Perenco agreement. Now that this door has closed, Bowleven has even fewer options available.
Panmure Gordon director Ashley Kelty said it remained to be seen whether New Age could find another buyer or raise money for Etinde itself. “But this looks like Etinde will remain a pipedream for a few more years”, he said.
Bowleven’s major shareholder, Crown Ocean Capital, had previously set out plans to buy shares at a “significant discount”. The company reports its Etinde stake to be worth $155mn.