After the completion of the farm-down to Lukoil/NewAge in 2015, the bulk of Bowleven (LON:BLVN)'s value lies in its 20% interest in the Etinde gas condensate field and significant cash resources. In the current market, these cash resources (with no debt or outstanding work commitments) put it in a strong position as a well-funded developer and mean it has the ability to screen additional inorganic opportunities, as well as take advantage of falling service costs to maximise value. We expect the two carried appraisal wells in the Intra Isongo to be drilled in late 2016/early 2017, with the potential to more than triple the company’s resource base. As the project approaches FID in 2017, we would expect investors to attribute more value to the development but, for now, more than half of our core NAV of 45p/share is made up of cash. Our RENAV of 60p/share includes an uplift from the Intra Isongo and a potential development at Bomono.
Etinde FID delayed…
The final investment decision (FID) has taken longer than we expected at Etinde. This is a consequence of the new operator, the complications of the fertiliser plant requiring co-FID and the promise of the appraisal wells on Intra Isongo, which could add enough to the resource base to enable consideration of alternative/additional offtake solutions. For the moment, we continue to assume the fertiliser plant solution (albeit with FID in 2017), which is relatively robust even at lower oil prices.
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