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Bowleven PLC on Friday reported a narrowed annual loss, partly thanks to cost reductions, but warned its cash is ‘depleting’ and it has a ‘pressing need’ to raise equity. A deal on the table is at ‘a very substantial discount’ to the stock’s current market price. The Edinburgh, Scotland-based oil and gas exploration company is developing the Etinde project offshore Cameroon. Shares were down 3.9% to 0.63 pence on Friday morning in London. They are down 74% in the past 12 months. Bowleven reported a pretax loss of $2.0 million for the half-year that ended June 30, narrowed from $2.5 million a year before. Bowleven has no revenue, so the narrowed loss was thanks to lower administrative expenses and a swing to positive finance income from negative. Bowleven is awaiting the acquisition of a 37.5% stake in Etinde, and operatorship, by Perenco SA. It expects this to happen by early 2024. This, it hopes, will provide a ‘catalyst’ for fund-raising efforts and the monetisation of Etinde. ‘The pace of development to date has been unfortunate of course,’ the company said, ‘but we remain of the belief that the operational credibility and project backing of Perenco for Etinde should be a positive outcome for all stakeholders that will reset the business into the coming years.’ In the meantime, Bowleven warned, ‘our working capital funds are depleting’. It said it had $1.0 million in cash as of October 31. As a result, it has ‘a pressing need to raise additional equity to fund our operations’. ‘The board has been in discussions with the company’s major shareholder in relation to the provision of new equity capital and has been considering an indicative proposal which contemplates it providing equity capital at a very substantial discount to the current market price of Bowleven’s ordinary shares,’ the company said. Bowleven’s largest shareholder is Crown Ocean Capital P1 Ltd, with a 28.9% stake, according to Morningstar. Bowleven said on Friday that the shareholder has provided a ‘comfort letter’ confirming it will provide financial support to the extent that cash resources are not otherwise available for at least the next 12 months. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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