Capital markets day presentation 24th jan 2012

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  • 1. Capital Markets Day 24th January 2012
  • 2. DisclaimerImportant NoticeNothing in this presentation or in any accompanying management discussion of this presentation (the "Presentation") constitutes, nor is it intended toconstitute: (i) an invitation or inducement to engage in any investment activity, whether in the United Kingdom or in any other jurisdiction; (ii) anyrecommendation or advice in respect of the ordinary shares (the "Shares") in Bowleven plc (the "Company"); or (iii) any offer for the sale, purchase orsubscription 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 exceptpursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any otherapplicable 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 identifiedby 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 orintentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Companys intentions,beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies ofthe Company and its direct and indirect subsidiaries (the “Group”) and the industry in which the Group operates. By their nature, forward-looking statementsinvolve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-lookingstatements are not guarantees of future performance. The Group’s actual results of operations, financial conditions and liquidity, and the development of theindustry 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 consistentwith the forward-looking statements contained in the Presentation, those results or developments may not be indicative of results or developments insubsequent periods. In light of those risks, uncertainties and assumptions, the events described in the forward-looking statements in the Presentation may notoccur. Other than in accordance with the Companys obligations under the AIM Rules for Companies, the Company undertakes no obligation to update orrevise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. All written and oral forward-lookingstatements attributable to the Company or to persons acting on the Companys behalf are expressly qualified in their entirety by the cautionary statementsreferred to above and contained elsewhere in the Presentation. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 2
  • 3. Presentation Agenda• Overview• Value Realisation• Development & Operations• Economics & Funding• Interim Q&A’s• Asset Overview (Resources)• Exploration• Outlook & Conclusion• Q&A 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 3
  • 4. oil & gasOverview
  • 5. Company Overview Company Assets • 5 Blocks in Cameroon covering 4,644km². • 3 offshore shallow water, 2 onshore; all operated. Nigeria • 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). Cameroon • Onshore Bowleven (operator) 100% Bomono Permit. • SNH back-in rights 20% (Etinde) and 10% (Bomono) at grant of exploitation licence. Equatorial Guinea* Source: Annual Report for 2011. Operator’s volumetrics. Volumetrics update post Sapele-3 pending, excludes EOV. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 5
  • 6. Vision & StrategyVision “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 organic growth and niche acquisitions.”Strategy – Regional Focus on West Africa• 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. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 6
  • 7. Company OverviewBowleven – Finding Resources & Securing Acreage• Current team has drilled 8 wells since joining in early 2007.• Busiest and most successful Operator in Cameroon. Succeeded in opening up Douala Basin and discovering oil on acreage previously considered as gas prone.• Multiple discoveries made – all wells encountered hydrocarbons.• Wells have been targeted to maximise value – oils and rich gas. †• Drill locations have also been considered in context of the desire to maximise the area of retained prospective acreage.• Extensive additional 3D seismic acquired (Block 6, 4C OBC etc). 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 7
  • 8. Etinde Drilling HistoryTrack Record – Wells and Resources 2007 2008 2009 2010 2011 Sapele-1 (Feb 2011)• 100% Drilling success rate. IE-2z (March 2007) Vitol 33-43m Net Pay Tested 8,800boepd farm-in• Focus on liquids. 55m Net Pay Sapele-1ST (June 2011) Tested 3,101boepd D-1R (July 2007)• Gross resources up 166% since 2006. 19m Net Pay Tested 5,655boepd 11m Net Pay IF-1R (August 2008) IE-3 (August 2010) Sapele-2 (Aug 2011)• Operator’s estimates, excludes Sapele-3 and Tested 3,812boepd Tested 22,909boepd Tested 3,119boepd Alpha-Epsilon System: 61m oil column from 5 zones 35m Net Pay 40m Net Pay Sapele-3 (Oct 2011) Etinde P50 Gross Resource 19m Net Pay IM IC Manyikebi IE mmboe IF Deep Omicron Fairway Sapele-3 SNA-1X Sapele-1/1ST D-1R Sapele-2 20km 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 8
  • 9. Key Events for 2012-2013Mobilise for CommercialisationEtinde• Target to sign MOUs for up to 80mmcf of dry gas sales by end H1 2012.• Draft Etinde Exploitation Application on track for submission on 31st March 2012.• Rig due to be delivered following completion of operations for † Noble Energy. Anticipated around middle of year.• 2-4 well offshore appraisal and development drilling programme commencing with IM well.• Project financing - discussions already commenced.• Gas Sales Agreements, FID and finalisation of debt finance targeted for 2013.Bomono• Drilling campaign scheduled to commence mid 2012. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 9
  • 10. Strong Management Team Kevin Hart Philip Tracy Ed Willett Chief Tabetando John Brown Peter Wilson CEO Interim Operations Exploration Director Chairman EurOil Finance Director Director/General Director Counsel • Management team with track record of finding, financing and delivering oil and gas projects to market. • Excellent in-country relationships through EurOil with appropriate ministries and SNH. • Bowleven and Vitol JV well-aligned in objective of exploiting gas and liquids in the Etinde Permit, as a matter of priority. • Development project to be EurOil driven with Bowleven and Vitol to contribute management and technical expertise. • Bowleven now positioned to deliver home-grown production and cashflow in 2015. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 10
  • 11. oil & gasValue Realisation
  • 12. 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 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. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 12
  • 13. Gas Solutions – Multiple Options Third Party led Alternative In House Solutions Fertiliser Power LNG Methanol Small Scale Reinjection (Ferrostaal) (AES Sonel) (Cameroon/Bioko) (JV) LNG (JV) 80-185 60-110 60-110 Dependent 70mmscfd 10mmscfd mmscfd mmscfd mmscfd on Reservoir • Negotiations advancing. • Being progressed in parallel. Liquids focused – gas enabled• Gas pricing TBC. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 13
  • 14. Third Party Gas SolutionsFertiliser Plant Fertiliser Plant Volume : 70mmscfd Dry Gas. Start up : 2015 Status : Draft MOU under negotiation (10 year supply). Location : Limbe. Ferrostaal & SNH as promoters will be owner/operator of facility. Notes : • LOI between Ferrostaal and SNH announced in October 2011. • Plant’s annual production 600k tonnes Ammonia, 700k tonnes Urea • Strong domestic and Central Africa fertiliser market (Cameroon currently imports fertiliser). • Site inspection and survey completed for preferred plant location at Limbe. • Comparable projects by Ferrostaal in Trinidad and Oman. • FEED sanction 2012. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 14
  • 15. Third Party Gas SolutionsPower Plant (GTE) Existing AES Power Plant Volume : 10mmscfd Dry Gas initially (pre-plant upgrade). Start up : ASAP Status : Draft MOU under negotiation with AES Sonel (10 year supply). Location : Limbe (adjacent to existing refinery). Notes : • In conjunction with larger scale offtake solution. • Dual fuel power source plant already in use at Limbe, conversion less than 12 months. • Significant supply constraints within country. • Studies underway (USTDA backed) to double plant capacity (currently 85MW). 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 15
  • 16. Third Party Gas SolutionsLiquefied Natural Gas GdF - Liquefied Natural Gas Volume : 85-185mmscfd Dry Gas from Etinde. Start up : Earliest 2017 Status : Term sheet signed establishing commercial framework Location : Kribi. GdF and SNH as promoters will be owner-operator. Notes : • Countrywide offshore gas aggregation scheme (270km pipeline, 4 FEED supply sources). • Pre-FEED (Foster & Wheeler) completed end-2011 on a first LNG train with 2.5-3.5mtpa capacity. • Facility to be situated at Kribi at deep water harbour project. Site preparation work ongoing. • Bankability study completed by Société Générale and Standard Chartered. • Upstream committee established to coordinate opportunities and possible synergies. • Next steps are resource certification and feedgas HOA. • FEED commences 2013. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 16
  • 17. In House Gas SolutionsMethanol Plant Methanol Plant Volume : 60-110mmscfd Dry Gas. Start up : TBC Status : Under Evaluation. Location : Limbe Notes : • 0.6-1.3Mtpa Methanol plant. • Cost screening and feasibility study completed H2 2011. • Next steps - partner evaluation of engineering and technical definition. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 17
  • 18. Third Party Gas SolutionsLiquefied Natural Gas Small Scale Liquefied Natural Gas Scheme Volume : 60-110mmscfd Dry Gas. Start up : TBC Status : Under evaluation. Location : Limbe Notes : • 0.35Mtpa LNG plant. • Cost screening and feasibility study completed H2 2011. • Next steps - partner evaluation of engineering and technical definition. • Least mature of options. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 18
  • 19. In House Gas SolutionsReinjection Reinjection Volume : Reservoir dependent. Start up : TBC Location : TBD. Notes : • Possible to enhance liquids yield through reservoir pressure maintenance. • Ongoing reservoir studies and core analysis. • Capex would need offshore compression, additional injector wells and dry gas pipeline from shore (all liquids stripping and compression to be done onshore). 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 19
  • 20. Maximising Liquids Value Delivery Point Gas OptionsPhase 1 – MLHP-7 IM Target 2015 Power (AES) Up to 10mmscfd IE 3rd Party Led Fertiliser (Ferrostaal) IF Up to 70mmscfd Oil, Condensate Liquids Stripping & up to Up to 80mmscfd (Primary NGL Plant LNG 90mmscfd of Dry Gas Processing) Up to 80mmscfdOnstream 2016- Omicron Deep & wet gas Subsequent Lower Phases Alternative In-House Solutions Epsilon C4’s C3’s C5’s Butane Propane Methanol Cond. c.60-70mmscfdFuture Phases D-Discovery Small Scale Potential (D-1R) Total Liquids Production LNG c.60-70mmscfd 10-15% Shrinkage Other existing & • All liquid offtake is marketable internationally i.e. free marketing rights for oil. Future Discoveries Reinjection • 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. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 20
  • 21. Value Optimisation: Gas supply configuration to maximise liquids yield Total Mean WGIIP & Initial Liquids Yield* Test Yields 600 bbls/mmcf 1,272 1,272bbls/mmcf IF 1,272 500 Omicron Deep 313-329 IF IE 127-292Initial Liquids Yield bbls/mmcf Lower Omicron 121 400 D1-r 59 Sapele Omicron IM TBC (IM-5) Deep 300 • Test yields exclude NGLs IE which could provide 200 Sapele Lower significantly enhanced liquids Omicron production e.g. IE Field IM additional c.70bbls/mmcf. 100 D1-r 0 0 200 400 600 800 1000 1200 1400 WGIIP bcf Mean WGIIP bcf Note: D-1r and Lower Omicron based on sample yields; *Operator’s estimates. Note: D-1r and Lower Omicron based on sample yields * Operators estimates 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 21
  • 22. oil & gasDevelopment & Operations
  • 23. Maximising Liquids Value Delivery Point Gas OptionsPhase 1 – MLHP-7 IM Target 2015 Power (AES) Up to 10mmscfd IE 3rd Party Led Fertiliser (Ferrostaal) IF Up to 70mmscfd Oil, Condensate Liquids Stripping & up to Up to 80mmscfd (Primary NGL Plant LNG 90mmscfd of Dry Gas Processing) Up to 80mmscfdOnstream 2016- Omicron Deep & wet gas Subsequent Lower Phases Alternative In-House Solutions Epsilon C4’s C3’s C5’s Butane Propane Methanol Cond. c.60-70mmscfdFuture Phases D-Discovery Small Scale Potential (D-1R) Total Liquids Production LNG c.60-70mmscfd 10-15% Shrinkage Other existing & Future Discoveries Reinjection • Single multiphase pipelines to shore-based facilities. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 23
  • 24. EurOil Development Project Organisation Project Steering Committee • Stakeholder Interface • Operational HSEQ • Technical Authorities Development Project Team • Development Management • Gas Usage • Project Finance 3rd Party Expertise • Drilling Operations • Sub-Surface Appraisal • Engineering Design & Construction 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 24
  • 25. Stage Gated Process EXPLORE APPRAISE SELECT DEFINE EXECUTE OPERATE 1 2 3 4 5 Intent to Feed Project Comm’g develop approval Sanction & startup Exploration drilling, seismic, formation evaluation, modelling Drilling /Production Well Field development planning Completions Feasibility Studies Engineering Detail Design Procurement Construction Commissioning and Start UpMaturity of Cost Class 5 Class 4 Class 3 Estimates estimates estimates estimates -40% +50% -20% +40% -15% +25% 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 25
  • 26. Boundary Conditions• Development of gas solution “drives” the project.• The bulk of the value is in the sales of the liquid hydrocarbons.• JV working to define the technical scope of the processing plant required to maximise the value of the liquids and deliver dry gas at the factory gate.• Multiple gas utilisation concepts are being evaluated.• The bulk of the hydrocarbon processing will be performed onshore. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 26
  • 27. Concept: Combined Hub and Spoke Development Fully Integrated Holistic Option to Maximise Synergies Bomono Limbe Hub andPhase 1 Power Plant Douala GTE and Gas IM All Liquids & Gas supply Condensate to IE Limbe IF Indicative Etinde Concept Assumptions (gross) Class 5 Estimates• Potential to accelerate Core Hub development/production. Limbe Processing facility $275-325million• Facilitates phased approach.• All processing onshore; Each Spoke unmanned offshore platforms. Sapele 2-3 wells $20-30million each Wellhead Jacket $25-30million each• Provides flexibility for future expansion. 20km Pipeline $1-2million/km 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 27
  • 28. Key Milestones Gantt Chart 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 IE-4/IF-2 IM-5 MLHP-5 Production Drilling MLHP-6 Field Mapping and Reserve Reserves Simulation CertificationDraft ExploitationExp. Application &Appl. FDP finalised ConceptConcept Screening & Selection FEEDPre-Engineering Studies Pre-FEED Gas Utilisation Studies Debt negotiation ongoing Draft Exploitation Application Exploitation Authorisation Application Submission Gas sales MOU signed Preliminary Investment Export Contracts Gas Sales Agreement Negotiation Final Exploitation Design, Construction, Installation Submission Phase 1 First Investment Production Decision Decision signed Final Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 2015 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 28
  • 29. oil & gasEconomics & Funding
  • 30. Value Optimisation: Gas supply configuration to maximise liquids yield Total Mean WGIIP & Initial Liquids Yield* Test Yields 600 bbls/mmcf 1,272 1,272bbls/mmcf IF 1,272 500 Omicron Deep 313-329 IF IE 127-292Initial Liquids Yield bbls/mmcf Lower Omicron 121 400 D1-r 59 Sapele Omicron IM TBC (IM-5) Deep 300 • Test yields exclude NGLs IE which could provide 200 Sapele Lower significantly enhanced liquids Omicron production e.g. IE Field IM additional c.70bbls/mmcf. 100 D1-r 0 0 200 400 600 800 1000 1200 1400 WGIIP bcf Mean WGIIP bcf Note: D-1r and Lower Omicron based on sample yields; *Operator’s estimates. Note: D-1r and Lower Omicron based on sample yields * Operators estimates 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 30
  • 31. Valuation Assumptions for Indicative Initial Development Economics• Cash at 1.1.2012 US$160million including EOV proceeds. • IM plus 1 well 2012, appraisal costs US$60million included in cash flows.• $1.55=£1. • Etinde Historic Costs to end 2011 US$536 million;• 294,455,919 Bowleven shares in issue. Bowleven share US$394million (net cost recovery• Bowleven development equity 60%; Vitol and State 20% (State $468million). 20% back-in on development sanction). • Phased Hub and Spoke development; 1st production• Inflation 3% p.a. 2015; Platforms on IE and Sapele; Wellheads on IM and IF; ten development wells; pipelines from IE and Sapele to• Discount Reference Date 1.1.2012. processing plant including NGLs.• Single PSC Exploitation Area. • Total Capex to gas delivery point ~US$910million; opex• Liquids (oil, condensate and NGL’s) sold as blend at Brent $90 US$19 million (Phase 1) to US$32 million p.a (all phases). long-term real (2012 terms). • Wet Gas plateau production rate 90mmcfd; 10 year• Gas sales price TBC. plateau; gas shrinkage ~11%; dry gas 80mmcfd.• Post-processing sales gas delivered to Upstream delivery point • Average liquids rate scenarios per mmcf: 125, 250, and in Limbe for Fertiliser and Power Plant. 400 bbls.• No value for post-plateau tail gas or liquids production. • Liquids include depletion condensate, oil, additional condensate C5+ generated through NGLs processing,• No value for Bomono. propane and butane. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 31
  • 32. Indicative Cost Estimates and Phasing (Class 5 ±50%) SubsequentReal 2011 Capex Phase 1 Processing Total PhasesFirst production Date 2015 2015 2017 -Development wells Number 5 wells 5 wells 10 wellsDevelopment wells US$million 135 135 270Wellhead Platforms US$million 50 50 100Pipeline/tiebacks US$million 100 130 230Total Field US$million 285 0 315 600Processing & NGL’s Plant US$million 0 310 0 310Total US$million 285 310 315 910CAPEX Total 2013/2014 2015/2016 2017 2018/2019Development Wells 270 135 45 90Platforms 100 50 20 30Pipelines/Tie Backs 230 100 20 110 Note: Initial capex will beProcessing & NGL’s Plant 310 310 reduced in the event appraisal wells areTotal 910 595 85 0 230 suspended as producers. Phase 1 All PhasesOpex p.a. US$million 19 32Yr of 1st production 2015 2020 onwards 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 32
  • 33. Illustrative Productivity 90mmcfd Wet Gas • Economics are based on constant liquids over the 250bbls/mmcf plateau period. Reality • In reality, fields will exhibit 400bbls/mmcf = 36 mbpd higher initial flush production followed by a declining profile. 250bbls/mmcf = 22.5 mbpd 125bbls/mmcf = 11.25 mbpd Note: Operator’s estimate. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 33
  • 34. Illustrative Initial Development Valuation Bowleven Initial Development Valuation £/share at 1st Jan 2012: Etinde Hub & Spoke $90 Brent; Average Liquids Rates. Liquids Yield bbls/mmscf (Includes NGL’s) Cash • 90 mmcf wet gas Etinde Hub & Spoke NAV • 80 mmcf dry gas • Ten year plateau125 1.69 0.35 1.34 • Total Dry Gas Sales 292bcf • Total Wet gas produced c.330bcf Total Liquids Produced = 41 mmbbls (14% of Mean Etinde Liquid Resources). 2.61 $70/bbl Brent250 0.35 2.95 3.30 $90/bbl Brent 3.92 $110/bbl Brent Total Liquids Produced = 82 mmbbls (27% of Mean Etinde Liquid Resources).400 0.35 4.51 4.86 £/share Total Liquids Produced = 131 mmbbls (44% of Mean Etinde Liquid Resources). Note: Bowleven 294 million shares; $1.55=£1; cash includes EOV proceeds; no value for Bomono or tail production. Operator’s estimates. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 34
  • 35. Bowleven Net Share of Initial Development Cashflow US$ million Annual Bowlevens Net Share of Initial Development Cash Flow US$ million Cumulative 90mmcfd; 250 bbls/mmcf; US$90/bbl; Gas price TBC. 800 4,000 Cost oil 700 3,500 Profit oil 600 3,000 Capex incl. all fees etc Opex 500 2,500 Corporation Tax 400 2,000 Annual NCF Cumm NCF 300 1,500 200 1,000 100 500 0 0 (100) (500) (200) (1,000) (300) Cash flow positive (1,500) ~ 13 months after 1st production (400) (2,000) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Note: Operator’s estimate. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 35
  • 36. Project Funding• Forecast net cash balance at 1Q 2012 ~ $160 million, no debt.• Forecast total 2012 Group expenditure $110 million (assuming 2 wells on Etinde with coring, testing, development studies, plus one Bomono well).• Estimated net share of development capex over life of fields (post SNH back-in) ~US$550million.• Estimated net peak working capital requirement c.US$400million*.• Debt finance market – discussions commenced with a number of banks.• Strong funding relationships within JV with lending institutions.• Significant post back-in equity position (60%) gives further financing flexibility. *(60% of $595 million Phase 1 gross capex =$357million plus taxes of $80million and cost inflation allowance of ~$20million, less corporate cash end 2012 c. $50million). 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 36
  • 37. Summary of Key Milestones for 2012Milestone Date StatusGas Sales MOUs by end H1 2012 Negotiations ongoingDraft Exploitation Application by end Q1 2012 Preparation underwayDrilling (2-4 wells) Commence mid 2012 Rig due for release from Noble Energy. Contract signedFinal Exploitation Application end Q3 Concept screening in progressBanking Term Sheet secured end 2012 Dialogue open 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 37
  • 38. oil & gasInterim Q&A’s
  • 39. oil & gasAsset Overview (Resources)
  • 40. Cameroon Overview Relatively underexplored - an emerging oil storyRio del Rey Basin Douala Basin• MLHP 7. • MLHP 5 & 6, OLHP 1 & 2.• Shallow offshore area. • Onshore and shallow offshore areas.• Highly prospective acreage within a proven • Highly prospective active hydrocarbon acreage. system. • Number of onshore oil• Tertiary oil and gas- seeps. condensate discoveries. • Tertiary and Cretaceous• Established portfolio of leads. additional Tertiary prospects. • Onshore early exploration phase on 2D dataset.• Maturing exploration with transition into an • Offshore mature appraisal/development prospects portfolio on 3D phase. dataset. Cretaceous Turonian plays accessible in onshore area and shallow waters. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 40
  • 41. Etinde Existing DiscoveriesOverview of Gross Unrisked Mean Volumes In place* Deep Omicron fairway *Operator’s estimates. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 41
  • 42. oil & gas MLHP-7IM, IE, IF and Biafra Discoveries
  • 43. Etinde Existing Discoveries IM – Gas Condensate FieldHistorical IM-1 IM-2• 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)*.Present IM-4• Bowleven will begin operations on the IM-5 well in late-Q2 2012. IM-1• Well to appraise Middle Isongo reservoir and enhance the IM-2 established volumes and confirm CGR.Future IM-3• 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.*Operator’s volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 43
  • 44. Etinde Existing Discoveries IE – Gas Condensate/Oil FieldHistorical• 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. IE-3• Additional NGL component of c.70mmbbls/mmscf.• Mean WGIIP 408bcf; 95mmbbl liquids†.Present• Bowleven acquired a 4C OBC survey for improved crestal imaging of the IE Field. IE-2z IE-1• New seismic data now being interpreted to refine field ID-1 structural model and locate the IE-4 appraisal well.Future• 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.*Maximum flow rates per interval ranged from 845 to 11,778boepd with a cumulative maximum rate of14576bpd liquids and >50mmscf gas (total 22,909boepd). † Operator’s volumes. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 44
  • 45. Etinde Existing Discoveries IF – Oil FieldHistorical 4C OBC Data IF-1R• Discovered by Bowleven in 2008 with the IF-1R well.• 1 well drilled on structure to date.• High quality interbedded reservoir sands with excellent Biafra Gas deliverability.• Drill stem tested 3,371bopd 35°API oil with 2.65mmscfd associated gas, combined rate 3,812boepd.• Mean STOIIP 225mmbbls*. 4C OBC data onPresent periphery of the IF gas chimney. Signal much improved from• Bowleven acquired a 4C OBC survey for improved imaging previous volumes of the IF Field through a prominent gas chimney with allowing some detail in extensive seabed expression. the western flank of IF to be determined.• New seismic data now being interpreted and integrated with S-wave data yet to be incorporated. previous mapping to further improve structural definition and overall field extent beneath the gas masking effect.Future Isongo Oil• 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.*Operator’s volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 45
  • 46. Etinde Existing Discoveries Etinde – MLHP-7 Biafra Gas FieldsHistorical Timeslice Optical Stack – Biafra Interval• Shallow play prolific in the Niger Delta and Rio del Rey Basin recognised across the MLHP-7 part of the Etinde PSC area. IM-4 Manyu IM-1 Oil ETM-1• Drilled by 6 wells; 2 of which to specifically target the Biafra IM-2 Gas Response IC-1 interval. IM-3• Dry gas encountered in 5 wells with the exception of IM-1 which encountered oil shows. IE Biafra Field• Excellent reservoir quality encountered in all wells. Manyikebi ETM-1 Biafra Discovery• IE & Manyikebi - Mean Dry GIIP 136bcf*. IE-3Present Manyikebi Manyikebi IE-2z IE-1 Biafra Extension ID-1• An areal extensive play being extended into MLHP-6.• Volumetric resource update during Q1-Q2 2012 for IF, IM, ETM and MLHP-6 Biafra prospectivity.Future IF-1R• Potential to incorporate into future phases of the Etinde Hub IF-1R & Spoke Development. Gas Response• Possible potential also remains to fast-track development to provide feedstock gas to AES Sonel (Gas to Power scheme) at Limbe.*Operator’s volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 46
  • 47. oil & gasMLHP-5Sapele Lower & Deep Omicron discoveries,D-1R DiscoveryPalaeocene & Cretaceous discoveries
  • 48. Etinde Existing Discoveries Sapele – Deep Omicron Oil Fairway Historical • 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†. • Mean HIIP 477mmboe (not including Sapele-3 extension)‡. Present • Integration of ongoing post-well studies to provide volumetric update and define future appraisal and development well locations. Future • Anticipated that the Deep Omicron oil will form part of the second phase for the Etinde Hub & Spoke Development.*Sapele-1ST flowed at a stabilised rate of 2,023 bopd of 39.2 degree API oil and approximately 6.47 mmscfd ofassociated gas.†DST1 peak flow rate of 381 boepd, comprising 233 bopd of light oil and 0.89 mmscfd of associated gas and DST 2comprising 1,818 bopd of light oil and 5.52 mmscfd associated gas. ‡ Operators volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 48
  • 49. Sapele-3: Extending the Fairway 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 49
  • 50. Etinde Existing Discoveries Sapele – Lower Omicron Gas-Condensate FairwayHistorical• Discovered by Bowleven in 2011 with the Sapele-1 well.• 4 wells drilled by Bowleven penetrating the stratigraphically trapped gas-condensate accumulation.• Arealy extensive, good quality interbedded reservoir.• Test in Sapele-2, initially flowed wet gas up to 3.1mmscfd, however test curtailed due to a pressure leak in test string.• Mean HIIP 203mmboe*.Present• Geological model evolving with integration of ongoing post- well studies together with planning for future well locations.Future• Anticipated that the Lower Omicron hydrocarbons will form part of the future phasing for the Etinde Hub & Spoke Development.*Mean HIIP of 203mmboe comprises 132mmbbls CIIP and 1219bcf WGIIP; operator’s volumes. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 50
  • 51. Sapele Wells Lessons Learnt• The Sapele wells are drilled in a geologically/operationally challenging environment.• Interbedded reservoir facies with shale source rocks.• Lower and Deep Omicron sandstone reservoirs are laterally extensive/connected and are marked by substantial pressure inversions. This was not known prior to the drilling of the Sapele wells.• The combination of pressure peaks and inversions create situations where the well is markedly over or underbalanced. • Underbalanced situation leads to influx and well control safety issues. • Overbalanced situation leads to formation invasion, damage, mud cake and mud loss to formation.• The overbalance situation in the reservoirs had led to compromise logging and testing results.• Logging environment very demanding, high downhole temperatures frequently exceeding tool ratings, differential sticking on longer tools also key issues.• Subsequent wells will be redesigned to case off different pressure regimes during drilling e.g. Sapele-3. Pore pressure chart for one of the• Sapele-3 drilled within budget and without substantial formation Sapele wells, highlighting the operational margins for Mud Weight invasion. (to include ECD). Note the c.2ppg EMW drop on entering the Deep Omicron reservoir. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 51
  • 52. Etinde Existing Discoveries D-1R – Gas-Condensate FieldHistorical Far Angle Stack• Discovered by Bowleven in 2007 with the D-1R well.• Single well penetration of the stratigraphically trapped accumulation.• Good quality reservoir sandstones of Miocene age.• Well tested 25.4mmscfd with 56bbl/mmscf condensate (combined 5,655boepd); no depletion.• Well test analysis indicative of greater connected volume than can be seismically mapped.• Mean WGIIP 71.5bcf, with 4.4mmbbls condensate*.Present• Geological and geophysical evaluation ongoing. Type II AVO AnomalyFuture• Possible appraisal drilling for possible GOC/GWC.• Anticipated that the D-Discovery will form part of the future phasing of the Etinde Hub & Spoke Development.*Operator’s volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 52
  • 53. Etinde Existing Discoveries Sapele – Palaeocene Alpha-Epsilon SystemHistorical• E-W trending Palaeocene depositional systems have long been recognised in the Douala Basin. MLHP-6• Numerous oil shows and discoveries within this petroleum system; CoCo Marine 1 & 2, Moulongo Marine etc. MLHP-5• Sapele-1 encountered gas and oil shows in Epsilon which Epsilon was latterly confirmed as Palaeocene in age from Complex biostratigraphy.• Sapele-3 well also encountered oil in the same Palaeocene Sapele-3 interval. SNA-1X Sapele-1• Pay zones correlate to bright amplitude seismic data. Sapele-1ST• Mean GIIP 1819bcf for the system*. D1-RSapele-2Present• Gas condensate, dry gas and oil were all encountered at Sapele-1 & 3 validate additional Palaeocene prospectivity.• Liquids volumetric analysis ongoing with the integration of Sapele-3 well results.Future• Anticipated that the Alpha-Epsilon System will form part of future phasing for the Etinde Hub & Spoke development. Palaeocene depositional features from seismic timeslice*Operator’s volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 53
  • 54. Etinde Existing Discoveries Sapele – Cretaceous DiscoveryHistorical Sapele-1• Discovered by Bowleven in 2011 with the Sapele-1 well. Cretaceous Amplitude Map (kick interval).• Medium quality interbedded reservoir sandstones of the Upper Sapele-1 Cretaceous.• The stratigraphically trapped accumulation was found to contain high pressure dry gas.• Sapele-1 was abandoned due to the high pressure influx of gas to the well bore. N• Mean Dry GIIP 1029bcf*.Present• Geological and geophysical evaluation of the Cretaceous interval across the Douala Basin of Cameroon is ongoing to define reservoir fairways, future drilling locations and pressure profiles within the basin.Future• Cretaceous gas reservoirs have the potential to provide significant gas volumes to future production phases.• Pressure encountered require careful operational planning prior Cretaceous to the drilling of future wells into this interval.• Anticipated that the Cretaceous reservoirs will form part of a future phase to the Etinde Hub & Spoke development. Gas Kick*Operator’s volume. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 54
  • 55. oil & gasExploration
  • 56. BomonoHistorical• 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.Present• Prospect selection in progress, with a (commitment) well due Q3 2012.• Planning for immediate follow-up appraisal wells.Unrisked Mean Associated Gas Condensate Oil mmbbls Gas bcf HIIP bcf mmbbls Tertiary D & E 355 186 Sands. Tertiary B & C 326 112 Sands.Future• Anticipated that Bomono discoveries will be linked into the proposed facilities at Limbe for gas stripping and oil export. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 56
  • 57. MLHP-6Historical• 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.Present• 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 onshore area, on the flanks of Mt Cameroon.Future• Further exploration drilling expected on MLHP-6. 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 57
  • 58. oil & gasOutlook & Conclusions
  • 59. 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. • End Q1 2012 – Draft Exploitation Application & Development Plan submitted to SNH, • Q2 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. • Q3 2012 – Additional well spud (IE/IF, Block 5, Block 6). • End Q4 2012 – TD of additional well. • 2013 – Gas Sales Agreements, FID and finalisation of debt finance targeted.• 2 - 4 offshore wells are programmed for 2012, not all required before the decision point reached for the Etinde Hub & Spoke development.• Project financing discussions already commenced.• Fully funded for 2012.• 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 24 JANUARY 2012 CAPITAL MARKETS DAY PRESENTATION 59
  • 60. Contact: John Brown – Tel: +44 131 524 5678oil & gas Kevin Hart – Tel: +44 131 524 5678 info@bowleven.com www.bowleven.com Bowleven Plc. 1 North St Andrew Lane, Edinburgh, EH2 1HX, United Kingdom.