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LONDON -- The shares of BowLeven (LSE: BLVN ) have bounced 3.4% to 98.5 pence as of 9 a.m. EDT after the oil and gas explorer revealed a $9 million first-half loss.
The half-year income statement showed revenue of zero, administration costs of $6 million, and adverse currency movements of $3 million. The AIM-quoted company also revealed that its net cash position had dropped from $142 million to $90 million during the six months to Dec. 31 following capital expenditure of $46 million.
Kevin Hart, chief executive of BowLeven, said:
The recent IM-5 results, which significantly exceeded our pre-drill expectations, have placed us in great stead to deliver the staged development of Etinde. The substantial uplift in both gas and liquids volumes ensures we can move forward with the development plan and gas sales agreement knowing we are underpinned by an extremely robust project. ... We remain convinced that Bowleven is ideally positioned to become a major contributor to Cameroon's hydrocarbon production for years to come and we have the funding flexibility to deliver this potential.
The drilling results of IM-5, a well off the coast of Cameroon, were published earlier this month and showed the amount of "wet gas initially in place" rising 162% to 1.2 billion cubic feet.
The current share price values BowLeven at about 292 million pounds, which, given the group's cash reserves, suggests that a fair amount of the market cap is based on the amount of gas that could be recoverable from the waters off Cameroon. Indeed, since its 2004 flotation, the company has never sold any gas (or oil), while some $780 million has been raised from shareholders and losses of $165 million have been accumulated. The balance sheet shows capitalized exploration expenditure of $479 million, too.
Still, BowLeven saw its shares surge from as low as 33 pence to as high as 390 pence during 2009 and 2010, while news of a bid during 2012 prompted a sudden 50% price spike. That sort of share price potential is always possible with resources shares such as BowLeven.
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