Bowleven confirms $110m placing

9th Jun 2009 07:59

Africa-focused oil explorer Bowleven is raising $110m (£68m) from a placing to fund further appraisal of the IF oil field, offshore Cameroon.Bowleven, currently valued at just £64m, said Merrill Lynch International and RBS Hoare Govett are helping raise the money via an accelerated book-building process.Details of the number of placing shares and placing price will be announced once the process has finished.The company said it has net cash of about $17m, no debt and remains funded for its current work commitments to at least the end of 2009. But these commitments don't include proposed further discretionary appraisal activities in respect of the IF field. Bowleven wants to drill at least one appraisal well there, probably in the last quarter of this year, with an option for a second.The cost of drilling two appraisal wells is put at $65-75m, interpretation of new 3D seismic data would set the company back $10-15m, while $8-12m could be spent on front end engineering and design for development of the IF field.Earlier this month, an independent survey on the IF oil discovery on Block MLHP-7 of the Etinde permit confirmed a low estimate of reserves at 23.9m barrels, a best case of 53.1m barrels and high estimate 94.3m barrels. "Our combined views suggest that further appraisal is definitely warranted and that a commercial development is very likely," chief executive Kevin Hart said at the time.