Bowleven jumps after $250m Etinde project gets approval

Exploration and development group Bowleven has said the approval from the President of Cameroon for its proposed deal to sell a stake in its Etinde project to LUKOIL and NewAge has now been formalised.

In June, the Africa-focused company reached a $250m (£162m) deal with LUKOIL, which would see LUKOIL acquire a 30% stake in the Etinde project, while NewAge’s stake would increase from 20% to 30%.

On Tuesday, the AIM-group said the approval had been formalised and added it will receive an initial payment of $170m within the next 15 business days.

"The completion of the Etinde farm-out places us in a strong position to exploit further our existing asset base,” said group chief executive Kevin Hart.

“The resulting consideration of cash and carry, together with an expanded and strengthened joint venture, will enable us to progress both the Etinde development and importantly to participate in the near-term appraisal of the exciting Intra Isongo formation.”

LUKOIL and NewAge will pay the remaining $80m by investing as much as $40m to carry Bowleven on two appraisal wells on the project, with $15m to be paid in cash on completion of appraisal drilling.

The remaining $25m will be paid in cash once the final investment decision on Etinde’s development is made.

Bowleven shares jumped 9.14% to 31.65p at 12:52 on Tuesday.