Update: Farm-down allows investors to look to the future
Bowleven (BLVN) has announced the completion of the company’s farm-out of interests in the Etinde permit and receipt of $165m in cash (an estimated $5m to follow). This is a major step for the company, partly monetising its interest and gaining a significantly strengthened balance sheet. This puts the company in a rare peer group among E&Ps – fully funded for value-accretive development with spare capital to continue exploration – the cash pile should allow the company to be countercyclical in outlook and perhaps able to take advantage of stock market weakness. As we were explicitly expecting the farm-down, our core valuation remains largely unchanged at 73p/share after adjusting for FX moves and oil price forecasts changes, well above the current share price.Bowleven is an oil and gas company focused on Africa, where it holds a combination of development and exploration interests in Cameroon. Co.'s assets are aggregated into a single reporting segment: Africa operations, which focus on exploration and appraisal activities in Cameroon. All assets that are aggregated in this segment are in the exploration phase.
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