Interim Results 26 th March 2012 Disclaimer Important Notice - - PowerPoint PPT Presentation

Investor / Analyst Presentation Interim Results 26th March 2012

26 MARCH 2012 INTERIM RESULTS PRESENTATION

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Disclaimer

Important Notice Nothing in this presentation or in any accompanying management discussion of this presentation (the "Presentation") constitutes, nor is it intended to constitute: (i) an invitation or inducement to engage in any investment activity, whether in the United Kingdom or in any other jurisdiction; (ii) any recommendation or advice in respect of the ordinary shares (the "Shares") in Bowleven plc (the "Company"); or (iii) any offer for the sale, purchase or subscription of any Shares. The Shares are not registered under the US Securities Act of 1933 (as amended) (the "Securities Act") and may not be offered, sold or transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any other applicable state securities laws. The Presentation may include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or

• intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions,

beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies of the Company and its direct and indirect subsidiaries (the “Group”) and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group’s actual results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, may differ materially from those suggested by the forward-looking statements contained in the Presentation. In addition, even if the Group’s results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, are consistent with the forward-looking statements contained in the Presentation, those results or developments may not be indicative of results or developments in subsequent periods. In light of those risks, uncertainties and assumptions, the events described in the forward-looking statements in the Presentation may not

• ccur. Other than in accordance with the Company's obligations under the AIM Rules for Companies, the Company undertakes no obligation to update or

revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in the Presentation.

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Presentation Agenda

• Introduction – Kevin Hart
• Etinde Development – Philip Tracy
• Cameroon Subsurface – Ed Willett
• Financial Overview – John Brown
• Outlook & Conclusion – Kevin Hart
• Q & A

Kevin Hart

CEO

Philip Tracy

Interim Operations Director

Ed Willett

Exploration Director

John Brown

Finance Director

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Company Overview

• 5 Blocks in Cameroon covering 4,644km².
• 3 offshore shallow water, 2 onshore; all operated.
• Overall P50 contingent resource base 217 mmboe* (net).
• Extensive 3D & 2D seismic database; expanded significantly

during 2010/2011 (Bomono & Etinde).

• Substantial prospect inventory continually being developed

across portfolio.

• Offshore Bowleven (operator) 75% Etinde Permit (25% Vitol).
• Onshore Bowleven (operator) 100% Bomono Permit.
• SNH back-in rights 20% (Etinde) and 10% (Bomono) at grant of

exploitation licence. Company Assets

* Source: Annual Report for 2011. Operator’s volumetrics, excludes EOV.

Nigeria Equatorial Guinea Cameroon

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Vision & Strategy

• Strategy focused on creating and realising value through

material exploration success and development.

• Seek value adding partnerships and niche acquisitions as

appropriate.

• Fostering strong external partnerships and in-country

relationships.

• Targeted approach to technical, commercial and political risk.
• Resources to Reserves.

Vision Strategy – Regional Focus on West Africa “It is our vision to build an African focused exploration and production company which in time becomes renowned for its ability to consistently create and realise material shareholder value through exploration led

• rganic growth and niche acquisitions.”

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Results Highlights

• Drilling success - Sapele 2 & 3 encountering oil and gas

condensate.

• 2D seismic and 4C OBC 3D seismic evaluation over Bomono

and MLHP-7.

• Significant progress on Etinde Development plans. Exploitation

application imminent.

• EOV transaction finally nearing completion.
• Bomono farm-out discussions ongoing and drilling planning

advanced.

• Rig secured for 2 firm plus 2 optional wells on Etinde

commencing mid 2012.

• Equity placing raised $123m (net).

Significant Progress

†

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Key Events for 2012-2013

Etinde

• Target to sign MOUs for up to 80mmscf of dry gas sales by

end H1 2012.

• Submission of draft Etinde exploitation application imminent.
• Rig anticipated around middle of 2012.
• 2-4 well offshore appraisal and development drilling

programme commencing with IM-5 well.

• Project financing - discussions already commenced.
• Gas Sales Agreements, FID and finalisation of debt finance

targeted for 2013.

• Continued work on our extensive prospect and lead inventory.

Bomono

• Drilling campaign scheduled to commence H2 2012.

†

Mobilise for Commercialisation

• il & gas

Etinde Development

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Etinde Drilling History

2007 2008 2009 2010 2011

• 100% Drilling success rate.
• Focus on liquids.
• Gross resources up 166% since 2006.
• Operator’s estimates, excludes Sapele-3 and

Alpha-Epsilon System: Track Record – Wells and Resources

IE-3 (August 2010) Tested 22,909boepd from 5 zones 40m Net Pay IE-2z (March 2007) Tested 8,800boepd 55m Net Pay IF-1R (August 2008) Tested 3,812boepd 61m oil column D-1R (July 2007) Tested 5,655boepd 11m Net Pay Sapele-1 (Feb 2011) 33-43m Net Pay Sapele-1ST (June 2011) Tested 3,101boepd 19m Net Pay Sapele-2 (Aug 2011) Tested 3,119boepd 35m Net Pay Sapele-3 (Oct 2011) 19m Net Pay 20km

IC IM Sapele-3 IE Manyikebi SNA-1X Sapele-1/1ST Sapele-2 D-1R IF

Etinde P50 Gross Resource

mmboe

Deep Omicron Fairway

Vitol farm-in

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Etinde Existing Discoveries (Pre Sapele-3 Update)

Overview of Gross Unrisked Mean Volumes In place*

Deep Omicron fairway *Operator’s estimates.

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IF IE

Sapele

All Liquids & Gas Condensate to Limbe Limbe Hub and Power Plant Douala GTE and Gas supply

Bomono

20km

Phase 1

Concept: Combined Hub and Spoke Development

Fully Integrated Holistic Option to Maximise Synergies

• Potential to accelerate

development/production.

• Facilitates phased approach.
• All processing onshore;

unmanned offshore platforms.

• Provides flexibility for future

expansion.

Indicative Etinde Concept Assumptions (gross) Class 5 Estimates Core Hub Limbe Processing facility $275-325million Each Spoke 2-3 wells $20-30million each Wellhead Jacket $25-30million each Pipeline $1-2million/km

IM

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Gas Handling – The Key to Monetising Resources

• Etinde resources are predominately gas-associated liquids.
• In order to realise the value of Bowleven’s existing discoveries,

finding a solution for the associated gas is key.

• In common with nearly all African countries, Cameroon has only

a small but rapidly expanding market for gas.

• Until very recently the Cameroon Government had a strong

preference for any Cameroon gas, including Etinde gas, to be earmarked for use in aggregated LNG (GdF) scheme.

• Whilst gas sales to a third party is clearly preferable it is not a

pre-requisite to development as alternative ‘in house’ solutions exist.

• Commercialising gas is a key objective of the work programme

that has been agreed by the JV for 2012.

• Production will provide the cashflow base for ongoing

development – plus further exploitation of the existing extensive prospect inventory.

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Alternative In House Solutions

Gas Solutions – Multiple Options

Fertiliser

(Ferrostaal)

70mmscfd Power

(AES Sonel)

10mmscfd LNG

(Cameroon/Bioko)

80-185 mmscfd Methanol

(JV)

60-110 mmscfd Small Scale LNG 60-110 mmscfd Third Party led

• Negotiations advancing.
• Being progressed in parallel.

Liquids focused – gas enabled

Reinjection

(JV)

Dependent

• n Reservoir
• Gas pricing TBC.

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Cond.

Phase 1 – MLHP-7 Target 2015

Subsequent Phases Onstream 2016-

Potential Future Phases

Maximising Liquids Value

• All liquid offtake is marketable internationally i.e. free marketing rights for oil.
• Strong local and pan-African market for Propane & Butane (Cameroon

currently imports from Equatorial Guinea).

• Current concept is phased development.
• Flexibility in gas disposal options maintained.

IM IE IF

Omicron Deep & Lower

Epsilon

D-Discovery (D-1R) Other existing & Future Discoveries Oil, Condensate & up to 90mmscfd of wet gas Liquids Stripping (Primary Processing) NGL Plant Up to 80mmscfd Dry Gas Power (AES) Up to 10mmscfd Fertiliser (Ferrostaal) Up to 70mmscfd LNG Up to 80mmscfd Delivery Point Gas Options

C4’s

Butane

C3’s

Propane

Methanol c.60-70mmscfd Small Scale LNG c.60-70mmscfd Reinjection

Total Liquids Production 10-15% Shrinkage 3rd Party Led Alternative In-House Solutions

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IF Sapele Omicron Deep IE D1-r IM Sapele Lower Omicron

100 200 300 400 500 600 200 400 600 800 1000 1200 1400 Initial Liquids Yield bbls/mmcf

Total Mean WGIIP & Initial Liquids Yield*

1,272

Value Optimisation: Gas Supply Configuration to Maximise Liquids Yield

Test Yields bbls/mmcf IF 1,272 Omicron Deep 313-329 IE 127-292 Lower Omicron 121 D1-r 59 IM TBC (IM-5)

Note: D-1r and Lower Omicron based on sample yields; *Operator’s estimates.

• Test yields exclude NGLs

which could provide significantly enhanced liquids production e.g. IE Field additional c.70bbls/mmcf.

1,272bbls/mmcf

WGIIP bcf

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Key Milestones Gantt Chart

• il & gas

Cameroon Subsurface

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Cameroon Overview

Relatively underexplored - an emerging oil story

Douala Basin

• MLHP 5 & 6, OLHP 1 & 2.
• Onshore and shallow
• ffshore areas.
• Highly prospective

acreage.

• Number of onshore oil

seeps.

• Tertiary and Cretaceous

leads.

• Onshore early exploration

phase on 2D dataset.

• Offshore mature

prospects portfolio on 3D dataset.

Rio del Rey Basin

• MLHP 7.
• Shallow offshore area.
• Highly prospective

acreage within a proven active hydrocarbon system.

• Tertiary oil and gas-

condensate discoveries.

• Established portfolio of

additional Tertiary prospects.

• Maturing exploration with

transition into an appraisal/development phase.

Cretaceous Turonian plays accessible in onshore area and shallow waters.

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MLHP-6 MLHP-5 MLHP-7

IE IM IF Limbe Hub and Power Plant

Combined Hub and Spoke Development

MLHP-7

• Potential to accelerate

development/production.

• Facilitates phased approach.
• All processing onshore;

unmanned offshore platforms.

• Provides flexibility for future

expansion.

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Etinde Existing Discoveries

IM – Gas Condensate Field

• Discovered by TEPCAM in 1967 with the IM-1 well.
• 3 additional wells drilled from 1971-1981 discovering and

appraising Gas-Condensate in the Upper and Middle Isongo.

• High quality reservoir sands with excellent deliverability.
• Gas composition from IM-4 Upper Isongo DST 11.4mmscfd,

827bcpd yields a CGR 72.5bbl/mmscf – similar to Alba Field (Equatorial Guinea).

• Only one well successfully penetrated Middle Isongo; CGR is

uncertain at this reservoir level.

• Mean WGIIP 466bcf (Upper and Middle Isongo)*.
• Bowleven will begin operations on the IM-5 well in mid 2012.
• Well to appraise Middle Isongo reservoir and enhance the

established volumes and confirm CGR. Present Historical

• The IM-5 well is likely to be used as a future producer.
• It is anticipated that the IM Field will be used as one of the

first phase producers into the Etinde Hub & Spoke development. Future

IM-1 IM-2

IM-1 IM-2 IM-3 IM-4

*Operator’s volume.

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Etinde Existing Discoveries

IE – Gas Condensate/Oil Field

• Discovered by TEPCAM in 1980 with the IE-1 well.
• 2 Appraisal wells (IE-2z, IE-3) drilled by Bowleven.
• High quality reservoir sands with excellent deliverability.
• IE-3 flowed at a combined rate of 22,909boepd*.
• Rich liquids yield – CGR of 127-292bbl/mmscf, and IE-3 also

flowed oil on test.

• Additional NGL component of c.70mmbbls/mmscf.
• Mean WGIIP 408bcf; 95mmbbl liquids†.
• Bowleven acquired a 4C OBC survey for improved crestal

imaging of the IE Field.

• New seismic data now being interpreted to refine field

structural model and locate the IE-4 appraisal well. Present Historical

• It is anticipated that the IE Field will be used as one of the

first phase producers into the Etinde Hub & Spoke development.

• Appraisal well to enhance proved volumes and located to

maximise liquids production. Future

*Maximum flow rates per interval ranged from 845 to 11,778boepd with a cumulative maximum rate of

14576bpd liquids and >50mmscf gas (total 22,909boepd). † Operator’s volumes.

IE-3 IE-2z IE-1 ID-1

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Etinde Existing Discoveries

IF – Oil Field

• Discovered by Bowleven in 2008 with the IF-1R well.
• 1 well drilled on structure to date.
• High quality interbedded reservoir sands with excellent

deliverability.

• Drill stem tested 3,371bopd 35°API oil with 2.65mmscfd

associated gas, combined rate 3,812boepd.

• Mean STOIIP 225mmbbls*.
• Bowleven acquired a 4C OBC survey for improved imaging
• f the IF Field through a prominent gas chimney with an

extensive seabed expression.

• New seismic data now being interpreted and integrated with

previous mapping to further improve structural definition and

• verall field extent beneath the gas masking effect.

Present Historical

• It is anticipated that the IF Field will be used as one of the

future producers into the Etinde Hub & Spoke development.

• Further wells to target and maximise liquids production.

Future

IF-1R

Biafra Gas Isongo Oil

4C OBC Data

4C OBC data on periphery of the IF gas

• chimney. Signal much

improved from previous volumes allowing some detail in the western flank of IF to be determined. S-wave data yet to be incorporated.

*Operator’s volume.

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MLHP-6 MLHP-5 MLHP-7

Sapele

Limbe Hub and Power Plant IE IM IF

Combined Hub and Spoke Development

MLHP-5

• Potential to accelerate

development/production.

• Facilitates phased approach.
• All processing onshore;

unmanned offshore platforms.

• Provides flexibility for future

expansion.

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Etinde Existing Discoveries

Sapele – Deep Omicron Oil Fairway

• Discovered by Bowleven in 2011 with the Sapele-1 well.
• 4 wells drilled by Bowleven penetrating the stratigraphically

trapped accumulation.

• High quality interbedded reservoir sands with excellent

deliverability, extend across MLHP-5.

• Flow rates for Sapele-1ST 3101boepd*, Sapele-2

3119boepd†.

• Integration of ongoing post-well studies to define future

appraisal and development well locations. Present Historical

• Anticipated that the Deep Omicron oil will form part of the

second phase for the Etinde Hub & Spoke Development. Future

*Sapele-1ST flowed at a stabilised rate of 2,023 bopd of 39.2 degree API oil and approximately 6.47 mmscfd of

associated gas. †DST1 peak flow rate of 381 boepd, comprising 233 bopd of light oil and 0.89 mmscfd of associated gas and DST 2 comprising 1,818 bopd of light oil and 5.52 mmscfd associated gas. ‡ Operators volume.

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Sapele-3: Extending the Fairway

Post Sapele-3 Pre Sapele-3

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MLHP-5&6 - Deep Omicron Volumetrics – Post-Sapele-3 Update

• Volumetric consistent with Press Released methodology:

Post Sapele-3 Fairway Volumetrics

P90 P50 P10 Mean STOIIP mmbbls 216.5 615.2 1726.8 844.7 Associated GIIP bcf 527.9 1532.4 4345.6 2110.6 BOE P90 P50 P10 Mean mmboe* 304.5 870.6 2451.1 1196.5 Previous mmboe* 87 242 1056 477 Previous STOIIP mmbbls 62 171 746 337 Previous Assoc. Gas bcf 149.8 425.3 1862.2 840.2

*conversion assumes 6bcf=1mmboe. All Operator volumes.

971km²

Previous Volumetric P50 Areal input 36km². Tangental construction 83.2km²

P90 Area Input P01 Area Input Sap-2 (19m) Sap-1 (15m) Sap-3 (11m) Sap-1ST (10m)

Log-Probit Chart

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The Importance of Scale - Horizontal

c.50km M25 For Scale

City of Edinburgh

DOM Fairway, MLHP-5/6, Cameroon

Firth of Forth

Bakken Fayetteville Woodford Niobara Eagleford Haynesville-Bossier Marcellus/Utica/ Devonian (Ohio) New Albany Barnett Antrim c.500km c.500km

• As stratigraphic traps result from a change in lithology, they can form at a variety of scales.
• Continuous-type plays and unconfined play types are known globally e.g. Bakken oil play in Northern USA.
• Characteristics of continuous-type plays:
• Geology
• Production

− lack of obvious trap, large areal extent, abnormal pressures (low or high), close association with source rocks. − large in-place hydrocarbon volume, absence of truly ‘dry’ holes. − serendipitous ‘hit or miss’ character of flow rates and ultimate recoveries per well. − Deep Omicron reservoir properties superior to Bakken: high quality sandstones contained within source rock; high test rates; and fracking not required.

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• Drilling deviated and horizontal wells to enhance productivity and define production ‘sweet spots’.
• Recoverable reserves are ultimately a function of the number and type of wells drilled and the completion methodology.

The Importance of Scale – Vertical (Salisbury Crags vs Deep Omicron)

Sapele-3

Big Ben 314ft/96m

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MLHP-5 – Palaeocene (Epsilon) & Cretaceous

Deeper Prospectivity

• Extensive deeper prospectivity in Etinde MLHP-5 at Paleocene and Cretaceous levels.
• Hydrocarbons encountered with Sapele-1 and Sapele-3.
• Exploration work ongoing.

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Combined Hub and Spoke Development

Bomono

Sapele Bomono IM,IE & IF Limbe Hub and Power Plant

• Potential to accelerate

development/production.

• Facilitates phased approach.
• All processing onshore;

unmanned offshore platforms.

• Provides flexibility for future

expansion.

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• 6 deep wells and c.10 shallow wells drilled in the 1950’s.
• Wells and onshore oil seeps proved active hydrocarbon

system.

• Tertiary and Cretaceous structural and stratigraphic traps

defined in area.

• 285km 2D acquired in Q1 2010 dry season. Further 215km 2D

acquired by end January 2011.

• New 2D data integrated into existing vintage dataset and now

defines a series of structural prospects.

Bomono Overview

Line acquisition 2010 Existing 2D

Log.105 (VOG) March 2010 test rates 55mmscfd and 20bbl/mmscf

Douala 10km Seeps

Historical

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Bomono Proposed Well

Present Future

• Exploration well location selected, planning for immediate

follow-up appraisal wells.

• Farm-out discussions ongoing.
• Anticipated that Bomono discoveries will be linked into the

proposed facilities at Limbe for gas stripping and oil export.

Prospect Unrisked Mean HIIP Oil mmbbls Associated Gas bcf Gas bcf Condensate mmbbls Tertiary D & E Sands. 302 224 Tertiary B & C Sands. 197 4

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MLHP-6

Present Historical Future

• Sparse 2D data and spec-surveys acquired across the

MLHP-6 area.

• Recognition of onshore seeps immediately adjacent to Mt

Cameroon, with shows in peripheral wells (Pungo-1X, 1970).

• No wells on block.
• Bowleven acquired full 3D seismic dataset in 2010 which

affords a new understanding of the Cameroon Line, its evolution and associated prospectivity.

• Variety of play types to explore for in MLHP-6.
• Highly prospective acreage given its position between proven

active hydrocarbon systems.

• Sapele-3 well confirms extension of Deep Omicron & Alpha-

Epsilon System into MLHP-6.

• Kosmos recently signed the new Fako block in the equivalent
• nshore area, on the flanks of Mt Cameroon.
• Possible exploration drilling.

• il & gas

Financial Overview

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Interim Results Summary – six months to 31 December 2011

• Loss of $5.5 million in period (H1 2010: loss of $15.7 million)

including:

• $82.5 million cash invested in oil and gas activities, primarily on

drilling activity on Etinde Permit.

• Net assets of $584 million at 31 December 2011.
• On 8 November 2011, the Company issued 77.5 million
• rdinary shares at a price of £1.03 per share, raising net

proceeds of $123 million.

• Net finance income of $3.0 million (H1 2010: net

finance costs of $8.0 million); arising principally on FX movements on intra-group funding under IFRS.

• Administrative expenses of $4.9 million.
• Unsuccessful efforts charge of $3.6 million relate to

relinquishment of the Epaemeno acreage.

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Funding Overview

• Cash $124 million and no debt at 31 December 2011.
• Proceeds pending from EOV disposal (~$40m).
• Forecast net cash balance at start Q2 2012 approx.

$160 million.

• Estimated total 2012 Group expenditure $110 million (assuming

2 wells on Etinde with coring, testing, development studies plus

• ne Bomono well).
• Moving from resources to reserves; access to debt finance.
• Farm-out opportunities when appropriate.

Significant financing flexibility.

• il & gas

Summary

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Summary

• Exploration success has extended Etinde resources into liquids and across the acreage.
• Energy/Momentum/Means to deliver Etinde to first production.
• Key milestones 2012-2013.
• Q1 2012 – Draft exploitation application & development plan submitted to SNH.
• Mid 2012 – IM-5 well spuds. Signed MOUs for gas sale agreements.
• Q2/Q3 2012 – Bomono operations.
• End Q3 2012 – IM-5 well TD, pre-FEED Etinde Hub & Spoke development commences.
• Late 2012 – Additional well spud (IE/IF, Block 5, Block 6).
• 2013 – Gas sales agreements, FID and finalisation of debt finance targeted.
• 2 - 4 offshore wells are programmed for 2012/13, not all required before the decision point reached for the Etinde Hub & Spoke

development.

• Project financing discussions already commenced.
• Fully funded for 2012. Bomono farm-out discussions ongoing.
• With a potential gas solution and liquids focus, significant cash flow is anticipated from first production – enabling further

exploration and development.

Liquids focused – gas enabled

• il & gas

Contact: Kevin Hart - Tel: +44 131 524 5678 John Brown - Tel: +44 131 524 5678 www.bowleven.com Bowleven Plc. 1 North St Andrew Lane, Edinburgh, EH2 1HX, United Kingdom. info@bowleven.com

• il & gas

Appendix

Indicative cost estimates

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Indicative Cost Estimates and Phasing (Class 5 ±50%)

Real 2011 Capex Phase 1 Processing Subsequent Phases Total First production Development wells Date Number 2015 5 wells 2015 2017 5 wells

• 10 wells

Development wells Wellhead Platforms Pipeline/tiebacks US$million US$million US$million 135 50 100 135 50 130 270 100 230 Total Field US$million 285 315 600 Processing & NGL’s Plant US$million 310 310 Total US$million 285 310 315 910 CAPEX Total 2013/2014 2015/2016 2017 2018/2019 Development Wells 270 135 45 90 Platforms 100 50 20 30 Pipelines/Tie Backs 230 100 20 110 Processing & NGL’s Plant 310 310 Total 910 595 85 230 Phase 1 All Phases Opex p.a. US$million 19 32 Yr of 1st production 2015 2020 onwards

Note: Initial capex will be reduced in the event appraisal wells are suspended as producers.