Bowleven plc, the Africa focused oil and gas exploration group and Victoria Oil & Gas Plc, an integrated energy company with operations in Cameroon, both trading on AIM, are pleased to announce that they have signed a farm-out agreement ("the Agreement") relating to the Bomono production sharing contract ("Bomono PSC").
Gas produced from the Bomono PSC will be fed into the customer distribution network owned and operated by Gaz du Cameroun S.A. ("GDC"), a wholly owned subsidiary of VOG.
First gas supply to the GDC network is anticipated to start following granting of a Provisional Exploitation Authorisation ("PEA") and other approvals.
This Agreement, which has been negotiated by the parties over several months, aligns Bowleven's intention of realising near term value from Bomono through commercial production of its Bomono gas deposit with VOG's business of commercialising local onshore gas deposits using its established gas infrastructure and customer network.
The transaction provides the ability to minimise the timescale to first production and optimises the proven advantages of Bowleven's upstream expertise and VOG's established gas supply business that feeds a diverse range of industries and the local power grid.
The initial plan is that gas currently suspended at Moambe be brought onstream and that further drilling be considered to supply the growing domestic market in and around the Douala area.
Farm Out Highlights
The farm-out transaction relates to the Bomono PSC, onshore Cameroon. EurOil is operator of the Bomono PSC.
Bowleven completed extended well flow tests on the Moambe well that exceeded 7mmscf/d. The Moambe and Zingana exploration wells drilled at Bomono were then suspended as future producers.
As previously announced by Bowleven, the detailed prospect inventory prepared indicates there is 146bcf and 263bcf of mean un-risked GIIP in the Tertiary and deeper Cretaceous reservoir intervals respectively.
Additional Transaction Details:
Kevin Hart, Chief Executive Officer of Bowleven plc, commented:
"We are delighted to be working together with VOG to unlock the potential of Bomono by accelerating the monetisation of the existing resources, whilst gaining access to VOG's extensive infrastructure and gas marketing experience. This deal offers shareholders the opportunity to access VOG's robust commodity pricing framework, which offers attractive returns relative to a gas to power option, and requires minimal further investment by Bowleven to reach first production. Retaining a 20% interest allows Bowleven to participate in the further upside potential identified on the acreage with a clear evacuation route to the attractive growing local gas market.
We are pleased to have reached this mile-stone for Bomono and look forward to working together with both VOG and the Cameroon authorities to realise the maximum potential this asset has to offer."
Ahmet Dik, Chief Executive Officer of Victoria Oil & Gas plc, commented:
"This is a mutually beneficial deal, which provides additional gas sources to our pipeline and considerable exploration upside, some 146 bcf and 263 bcf of un-risked GIIP. It also delivers an additional 2,327km2 of onshore license area and early production potential from the Moambe well that will help meet the expanding gas market in Douala. Our gas infrastructure pipeline is only 9.5km from Moambe well and on the Bonaberi side of Douala where we see considerable industrial growth potential. VOG's commitment to building and expanding further Cameroon gas infrastructure is being cemented and we are grateful for the support from SNH and the Government with our continued contribution to the growth of the Cameroon economy".