TIDMBLVN
RNS Number : 2157G
BowLeven Plc
19 November 2015
19 November 2015
Bowleven plc ('Bowleven' or 'the Company')
Proposed Acquisition of Licence Interests in Tanzania - Heads of
Terms Signed
Kiliwani North Development Licence and Ruvuma PSA, Tanzania
Bowleven, the Africa focused oil and gas exploration group
traded on AIM, is pleased to announce that it has signed a
conditional Heads of Terms (HOT) with Aminex PLC (Aminex) for the
acquisition of a 25% interest in the Kiliwani North Development
Licence (KNDL) and a 50% interest in the Ruvuma PSA, in
Tanzania.
The proposed transaction is in line with the Group's strategy of
focusing on opportunities in Africa which have the potential to
create material shareholder value, whilst maintaining a robust
balance sheet and strong capital discipline. Consistent with this,
this opportunity offers high quality near-term production and
cashflow, alongside significant exploration/appraisal upside,
located near existing infrastructure, enabling low cost rapid
development and monetisation of discovered resources.
Highlights of the Transaction
-- Bowleven to acquire:
o 25% interest in the soon to be producing Kiliwani North
Development Licence (KNDL); and
o 50% interest in the proven and highly prospective Ruvuma
PSA.
-- The deal provides:
o A low cost entry into a rapidly expanding Tanzanian gas market
with substantial existing infrastructure with spare capacity;
o Near-term high quality production providing cashflow from the
essentially completeKiliwani North development;
o Access to extensive exploration and appraisal potential on the
Ruvuma PSA, with the opportunities for near-term gas-to-power into
the local market and longer term gas sales into adjoining major
existing trans-Tanzanian pipeline to Dar Es Salaam; and
o Appraisal drilling on Ruvuma PSA early 2016.
-- Aggregate gross consideration of up to $28 million comprising
$8.5 million cash, $10 million carry, $5 million share-based
element and $4.5 million in contingent payments.
As at 31 October 2015, the Group had a cash balance of circa
$120 million and no debt with a further $40 million receivable in
staged cash proceeds ($15 million on completion of drilling/end
September 2016 and $25 million on Etinde FID).
Kevin Hart, Chief Executive of Bowleven plc, said:
"The decision to enter into this Heads of Terms with Aminex
follows the extensive screening of a large number of opportunities
in Africa.
Consistent with the Group's strategy, the deal affords Bowleven
the opportunity to participate in highly attractive production and
material appraisal/exploration assets without compromising its
robust balance sheet and strong capital discipline.
In particular, the onshore Ruvuma acreage mirrors the near-term
in-situ gas-to-power development possibilities being progressed at
Bomono, whilst the extensive, material prospective resources open
up the opportunity for substantial future gas sales via the
existing proximal processing infrastructure and pipeline.
During the forthcoming period of exclusivity we look forward to
working closely with Aminex in order to finalise the proposed
transaction."
Asset Details
The HOT relates to the KNDL and the Ruvuma PSA in Tanzania where
Aminex currently operates both licences.
Kiliwani North Development Licence (KNDL), Tanzania
The KNDL, offers the potential for near-term production with
proximate infrastructure for a gas-to-power development. The KNDL
contains the Kiliwani North gas field which Aminex, operator,
expects to produce initially at up to approximately 30 million
standard cubic feet of gas per day. The Kiliwani North-1 (KN-1)
well has now been tied into the main pipeline infrastructure and is
awaiting completion of the adjacent Songo Songo gas processing
plant, which is expected to be completed shortly.
Independently assessed unrisked mean gross gas-in-place and P50
gross contingent resources at Kiliwani North are estimated to be 44
bcf and 28 bcf respectively. The resources are classified as
contingent pending signature of the Gas Sales Agreement (GSA). The
GSA terms have been largely completed and Aminex are waiting for
final payment protection terms to enable signature of the GSA.
Aminex, operator, holds a 55.575% interest (pre-transaction),
RAK Gas 23.75%, Solo Oil 6.175% and Bounty Oil & Gas 9.5%, TPDC
5%
Ruvuma PSA, Tanzania
The Ruvuma PSA, onshore Tanzania, offers the potential for
near-term production post appraisal and exploration drilling
planned in 2016, alongside significant upside potential identified
on block.
Independently assessed unrisked mean gross gas-in-place and P50
gross contingent resources for the Ntorya discovery are estimated
to be 153 bcf and 70 bcf respectively.
Independently assessed unrisked prospective mean gross
gas-in-place volumes for the Ruvuma PSA are 4.2 trillion cubic feet
(tcf). Aminex, operator, holds a 75% interest (pre-transaction) and
Solo Oil 25%.
Details of the Transaction
Bowleven has entered into a conditional HOT with Aminex plc
(operator) for the potential acquisition of a 25% interest in the
soon to be producing KNDL and a 50% interest in the Ruvuma PSA, in
Tanzania. The transaction is inter-conditional upon acquiring both
assets.
The aggregate up to $28 million gross consideration comprises
the following cash, carry and share-based element:
-- $8.5 million in cash and $5 million in shares, payable at
completion (shares are to be retained by Aminex for minimum of 9
months).
-- $10 million net carry in respect of Aminex's retained interest in the Ruvuma PSA.
-- $4.5 million contingent payments comprising:
o $0.5 million on completion of Ntorya-2 drilling (Ruvuma
PSA)
o $4 million upon commercial production and offtaker payment
(Ruvuma PSA), payable in cash or shares at Bowleven's election.
Other Transaction Details:
-- Exclusivity granted by Aminex under HOT for three months to consummate transaction.
-- The effective date of the transaction is 1 January 2016.
-- Completion is subject to, amongst other things:
o Satisfactory completion of due diligence by Bowleven.
o Agreement of a Sale and Purchase Agreement (SPA) for the
transaction.
o Approval by the shareholders of Aminex PLC.
o Approval by the Tanzanian government of the transfer of the
equity interests from Aminex to Bowleven.
Information on Aminex:
Aminex an African-focused oil and gas company with near-term
production, development and exploration assets, is premium listed
on the London Stock Exchange (AEX:LN) and primary-listed on the
Irish Stock Exchange (AEX:ID). Aminex's core assets are in Tanzania
where it operates three Production Sharing Agreements (PSAs), the
soon to be producing KNDL, the Ruvuma PSA where appraisal drilling
is planned and the Nyuni Area PSA. It also has interests in Egypt
and Moldova.
ENQUIRIES
For further information please contact:
Bowleven plc
Kevin Hart, Chief Executive 00 44 131 524 5678
Kerry Crawford, Finance Director
Brunswick Group LLP
Patrick Handley 00 44 207 404 5959
Simon Maine
Macquarie Capital (Europe) Limited (Nomad)
Jon Fitzpatrick 00 44 203 037 2000
Ken Fleming
Nick Stamp
Notes to Editors:
Bowleven is an African focused oil and gas exploration group,
based in Edinburgh and traded on AIM. Bowleven's strategy is
focused on creating and realising material value principally
through exploration led organic growth. Bowleven holds equity
interests in two Permits in Cameroon, with one located offshore in
shallow water (operated by NewAge) and the other onshore (operated
by Bowleven).
Bowleven also holds an equity interest in an onshore block in
Kenya, operated by Adamantine Energy, and has been awarded three
blocks in Zambia, with applications on two blocks pending.
Notes to Announcement:
(1) The technical information in this release has been reviewed
by Ed Willett and David Clarkson, both qualified persons for the
purposes of the AIM Guidance Note for Mining, Oil and Gas
Companies. Ed Willett, Exploration Director of Bowleven plc, is a
geologist and geophysicist, a Fellow of the Geological Society
(FGS) and a member of the Petroleum Exploration Society of Great
Britain (PESGB) with over 28 years' experience in oil and gas
exploration and production. David Clarkson, Operations Director of
Bowleven plc, is a Chartered Engineer and Fellow of the Institution
of Mechanical Engineers with extensive oil and gas industry
experience.
(2) The 25% interest for KNDL is post state back-in as it is
expected that the state will back-in prior to completion of the
transaction. The state have a 5% back-in right to KNDL. Aminex
announced on 5 October 2015 that the Tanzanian Petroleum
Development Corporation (TPDC) had notified them of its intention
to acquire this 5% interest. The interests disclosed in the release
are therefore post state back-in.
(3) The 50% interest in the Ruvuma PSA is pre any back-in by the
state. The state have a 15% back-in right to the Ruvuma PSA.
(4) Independently assessed gas-in-place and resources figures
are extracted from a May 2015 Senergy CPR (as referenced in
Aminex's Annual General Meeting presentation on 20 May 2015).
(5) Bowleven is being advised by Rand Merchant Bank on this transaction.
Glossary of Terms:
(MORE TO FOLLOW) Dow Jones Newswires
November 19, 2015 02:00 ET (07:00 GMT)
Bowleven (LSE:BLVN)
Historical Stock Chart
From Apr 2024 to May 2024
Bowleven (LSE:BLVN)
Historical Stock Chart
From May 2023 to May 2024