Bowleven and Victoria Oil & Gas ("VOG") have signed a farm-out agreement relating to the Bomono production sharing contract. VOG is a domestic Cameroon gas supplier, and gas upcoming production from Bomono fits in with its strategy of expanding local supply.
Bowleven will retain a 20% operated interest in the Bomono PSC and VOG will have an 80% interest. Bowleven will receive £100,000 worth of new ordinary shares in VOG and a 3.5% royalty from VOG’s production share from the licence, with a cap limiting the total royalty payments to USD20 million. VOG will complete the civil engineering (c.USD6 million) and Bowleven has agreed to pay 50% of any deficit, limited to a USD2 million.
Gas produced from the Bomono PSC is expected to be fed into the customer distribution network owned and operated by Gaz du Cameroun, a wholly owned subsidiary of VOG and the gas will be sold to GDC less a tolling fee. First gas supply to the GDC network is anticipated to start following granting of a Provisional Exploitation Authorisation ("PEA") and other approvals.
Bowleven’s detailed prospect inventory indicates there is 146bcf and 263bcf of mean un-risked GIIP in the Tertiary and deeper Cretaceous reservoir intervals respectively. Completion of the deal is subject to the grant of a PEA over the Bomono PSC and approval from the Cameroon Government.
