Bowleven, the oil explorer which recently announced an oil discovery in Cameroon, has raised £80m towards funding the project.
As suggested here last week the company has taken advantage of recent share price strength to tap shareholders for cash, and they seem to have happily stumped up. It has completed a placing of 77.5m new shares at 103p each, and in the market its shares dipped 3.75p to 111.25p. It said 2012 would be a significant year for the company in terms of growing and developing its reserves, but it needed a strong financial base to undertake its appraisal and exploration programme:
Without the additional funding there would be a significant impact on the company's ability to carry out its proposed 2012 programme and also to finance its working capital requirements through 2012.
It estimated that as things stand, at the end of October it would have $15m of net cash. As part of its update it also revealed it has relinquished a permit in Gabon, which would lead to a write off of $42m in unsuccessful exploration costs. Phil Corbett at RBS said:
A successful fund raising should relieve the pressure on the share price in recent months given the funding overhang, and there could be a relief rally in the near-term. However, the pressure will be on management to use the proceeds wisely to advance the Etinde resource base [offshore Cameroon] to a point where an accretive farm-down and/or outright sale can be achieved.
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