Edinburgh based Bowleven has scaled back overheads in a year of “strategic change”, the firm’s new chief executive revealed today.
The oil and gas explorer is to enter 2018 with a group cash balance of $86 million and with no debt.
It comes after a boardroom coup and subsequent job cutting announced in May.
The Cameroon focused company ruled out any further exploration activity in the near future as it looked to cut general and administrative expenses by half.
Eli Chahin, a senior advisor to Alix Partners, joined the firm after a general meeting on March 14, during which shareholders voted to remove five directors.
Chahin was later confirmed as chief executive, filling the boots of Kevin Hart, a former Ellon Academy pupil who left the firm after the boardroom coup
Mr Hart, previously finance director at Cairn Energy, was ousted from his position of chief executive on the recommendation of activist investor Crown Ocean Capital.
He had led Bowleven since 2006.
Mr Chahin updated investors earlier today on the changes that have taken place since his appointment.
He said: “After a year of significant strategic change for Bowleven, I am confident that the company is well placed to support the advancement of its existing asset base in Cameroon and has the potential to deliver shareholder value into 2018 and beyond.
“We enter the year with a strong cash balance and a deferred consideration structure in place post completion of the Etinde farm-out transaction, no debt or outstanding work programme commitments.
“Additionally, we have scaled back the overhead base of the organisation, but retained a fit for purpose operating model from which to progress the monetisation of our assets.”
Bowleven holds equity interests in three blocks in Cameroon, with one block located offshore in shallow water (operated by NewAge) and two onshore (operated by Bowleven), which are currently the subject of a farm-out transaction for 80 % interest.
The firm plans to operate a “tightly managed” appraisal drilling campaign on Entinde, offshore Cameroon, with joint venture (JV) partners.
Two carried appraisal well locations have been agreed between the partners targeting combined additional in-place volumes of up to 2 tcf of gas and associated liquid resource.
Drilling is to progress once agreed by the Etinde JV partners.
Pre-March 2017, the board signed an agreement to farm out 80% of the group’s interest in the onshore Bomono Production Sharing contract to Victoria Oil & Gas Plc (“VOG”).
The commercial terms and legal documentation remain the subject of negotiations owing to various stakeholder discussions.
Cameroon Government approval for the completion of this farm-out arrangement has not been received to date.
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