TIDMBLVN
RNS Number : 9381E
BowLeven Plc
12 May 2017
12 May, 2017
Bowleven plc ('Bowleven' or 'the Company')
Corporate Update and
Award of Options
Bowleven, the Cameroon focused oil and gas group traded on AIM,
is pleased to announce an update on progress with the Company's
strategic efficiency programme and on the current status of its
existing assets. The Company also announces the adoption of a
Transformation Incentive Plan designed to align employees'
interests with the Company's longer term strategic objectives.
Corporate Update
At a general meeting held on 14(th) March 2017 (the "General
Meeting"), Bowleven's shareholders voted in favour of certain
resolutions to change the composition of the board. Shortly after
the General Meeting, a strategic review (the "Strategic Review")
was launched to consider all options open to the Company, with a
view to maximising value for all shareholders.
Following detailed consideration by the Board, the Strategic
Review was completed with the Company announcing that the Board
would remain focused on maximising value for its shareholders and
was committed to the rationalisation of the cost base, alongside
the preservation and enhancement of Bowleven's existing assets. The
Board also confirmed that it did not expect to pursue any new
exploration activity at the current time.
The Board has initially focused on the implementation of a
number of efficiency programmes, in line with its stated
objectives. These include:
-- A reduction in head office staff to a level commensurate with
the future strategy of the organisation as a holding company that
does not expect to pursue any new exploration activity, in the
absence of an overwhelming case to the contrary. A process to
reduce overall U.K. headcount from 18 to 5 Full Time Employees
(FTE) is underway. The use of contractors will underpin any
additional support needed to ensure the Company continues to
protect and enhance shareholder value, as well as maintaining a
proper stewardship over the Etinde and Bomono assets.
-- Streamlining Cameroon headcount and costs has also commenced.
The Company will continue to maintain an appropriate presence in
Cameroon to preserve and enhance value from its Etinde and Bomono
assets. The Board intends to retain technical capacity and
institutional knowledge as required so as to enable Bowleven to
meet its contractual obligations under the terms of the joint
venture and to pursue the most efficient route to value
maximisation in relation to both Etinde and Bomono, in due
course.
-- As a result of these changes, the Board anticipates that,
once staff reductions and other cost rationalisations efforts are
complete, the monthly group G&A costs will be reduced to
approximately US$0.35 million per month in the second half of 2017,
compared to monthly group G&A costs of US$0.6 million per month
in the 6 months to December 2016. In order to achieve these
material cost reductions, the Group expects to incur one off costs
in the region of $3-4 million during 2017.
-- The Etinde JV continues to engage with La Société Nationale
des Hydrocarbures du Cameroun ('SNH)' and the Cameroon authorities
through the JV Operator, New Age (African Global Energy) Limited,
to agree the plans for the development of the Etinde resources. The
JV Operator has submitted a request to SNH to convene an Operating
Committee Meeting to agree the forward plan.
-- On Bomono, the Company is engaging with SNH to discuss the
outstanding approval of the Bomono Farm-In which will allow Bomono
hydrocarbons to be produced into the VOG, Gas du Cameroon,
pipeline.
To that end, meeting dates are being offered to work-out an
all-party solution to allow this transaction to conclude and allow
work to commence to connect Bomono into the domestic gas market
through the existing pipeline infrastructure.
-- The Board will continue to consider all options as to
identify the most value accretive proposition for shareholders.
Once the development options as to gas monetisation of both the
Etinde and Bomono assets have been determined and costed, the Board
anticipates being in a position to determine the cash requirements
of the business and whether there are surplus assets that can be
returned to shareholders.
Implementation of Transformation Incentive Plan
The Board has adopted a Transformation Incentive Plan (the
"Plan"), with effect from 9 May 2017. The Plan is a discretionary
benefit offered by the Company to its employees and has been
designed to align the interests of employees with the Company's
long term business goals and performance through the potential for
share ownership. The remuneration committee of the Company (the
"Committee") retains the right to decide, in its sole discretion,
whether or not and to whom awards under the Plan will be granted
and may vary the terms of awards made under the Plan in certain
circumstances.
The aggregate number of any issued or unissued ordinary shares
in the capital of the Company being the subject of the Plan from
time to time shall not in any circumstance exceed 5 per cent. of
the issued ordinary share capital of the Company. This limit shall
not affect the ability of the Company to grant awards under any
other employee share plans adopted by it from time to time.
Grants under the Plan which have vested may be exercised within
10 years from the date of grant.
Award of Option
Eli Chahin was appointed Acting Chief Executive on 30(th) March
2017 and has since been confirmed as Chief Executive on a full time
basis. We as a Board are delighted that he has agreed to take the
chief executive role.
The Board has taken external advice from independent
remuneration consultants as to the appropriate package for Mr
Chahin, given his existing arrangements, the position of the
Company and what is appropriate in the current market. In light of
this, the Committee resolved on 9 May 2017 to grant Mr Chahin a
right to acquire up to 10,000,000 ordinary shares in the Company
(the "Option") at a nil cost under the Plan.
The Option shall be exercisable subject to and in accordance
with the rules of the Plan including the extent to which certain
performance conditions are satisfied over the performance period
commencing on the date of grant and ending on 31 March 2022. The
Option's performance conditions relate to the Company's share price
performance and the maintenance of annual cash costs below a
certain level, and malus and clawback provisions apply.
Chris Ashworth, Non-Executive Chairman said:
"I am very honoured to have been appointed Chairman of this
company. I believe that we should be able to transform Bowleven
into a major asset for shareholders.
Having undertaken a detailed review of all strategic options
available to the Company, the Board has implemented these necessary
changes in line with our stated strategy. This will ensure that the
Company and the wider group will have the right cost base, so that
it can deal successfully with future demands and protect our
interests in Cameroon, whilst at the same time seeking
opportunities to maximise value for all shareholders. The difficult
decisions, made by the Board and led by Eli Chahin as our Chief
Executive, impact a large number of people. I would like to thank
all the employees of Bowleven for their cooperation and
contribution to Bowleven in the past and through this difficult
transition period."
Eli Chahin, Chief Executive said:
"We are confident that these changes will allow the Company to
move forward on a more appropriate cost base, whilst retaining the
necessary skills, relationships and capacity to progress a route to
shareholder value at both Etinde and Bomono. We move forward from a
position of strength, with a robust balance sheet, strict capital
discipline and an experienced and focused core management
team."
ENQUIRIES
For further information please contact:
Bowleven plc
David Clarkson, Chief Operating Officer 00 44 131 524 5678
Brunswick Group LLP
Patrick Handley 00 44 207 404 5959
Will Rowberry
Cenkos Securities plc (NOMAD)
Derrick Lee 00 44 131 220 6939
Neil McDonald
Notes to Editors:
About Bowleven
Bowleven is a Cameroon focused oil and gas group, based in
Edinburgh and traded on AIM. Bowleven holds equity interests in two
blocks in Cameroon, with one block located offshore in shallow
water (operated by NewAge) and one onshore (currently operated by
Bowleven).
The following notifications are intended to satisfy the
Company's obligations under Article 19(3) of EU Regulation No
596/2014 (the Market Abuse Regulation).
1 Details of the person discharging managerial responsibilities/person
closely associated
---- -----------------------------------------------------------------------------
a) Name Eli Chahin
---- -------------------------- -------------------------------------------------
2 Reason for the notification
---- -----------------------------------------------------------------------------
a) Position/status PDMR (Chief Executive Officer)
---- -------------------------- -------------------------------------------------
b) Initial notification/ Initial Notification
Amendment
---- -------------------------- -------------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
---- -----------------------------------------------------------------------------
a) Name Bowleven plc
---- -------------------------- -------------------------------------------------
b) LEI 213800UITVIP4EWSPE58
---- -------------------------- -------------------------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
---- -----------------------------------------------------------------------------
a) Description of Ordinary shares of 10p each ("Shares")
the financial
instrument, type
of instrument
----
Identification GB00B04PYL99
code
---- -------------------------- -------------------------------------------------
b) Nature of the Grant of Option to acquire Shares pursuant
transaction to the terms of the Bowleven plc Transformation
Incentive Plan.
---- -------------------------- -------------------------------------------------
c) Price(s) and volume(s) Price(s) Volume(s)
---------- -----------
GBP0 10,000,000
---------- -----------
---- -------------------------- -------------------------------------------------
d) Aggregated information
* Aggregated volume
Not applicable
* Price
---- -------------------------- -------------------------------------------------
e) Date of the transaction 9 May 2017
---- -------------------------- -------------------------------------------------
f) Place of the transaction London Stock Exchange
---- -------------------------- -------------------------------------------------
GLOSSARY:
The following are the main terms and abbreviations used in this
announcement:
AIM the market of that name operated by the London
Stock Exchange
Bowleven Bowleven plc (LSE:BLVN) and/or its subsidiaries
as appropriate
G&A general and administrative
JV joint venture
NewAge New Age (African Global Energy) Limited, a privately
held oil and gas company
SNH Société Nationale des Hydrocarbures,
the national oil and gas company of the Republic
of Cameroon
VOG Victoria Oil & Gas plc, an integrated energy
company with operations in Cameroon, traded
on AIM
This information is provided by RNS
The company news service from the London Stock Exchange
END
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