Bowleven, the oil exploration group which recently raise £80m to fund its project in Cameroon, has slipped back after its latest drilling update.
The company's shares are down 1p at 73p, compared to the 103p price at which it placed 77.5m new shares a month ago. It said the Sapele-3 exploration well had found signs to suggest it was oil bearing at lower levels, and the well was being suspended until further tests. But Evolution Securities analyst Richard Griffith said the results were far from conclusive, and investors would have to wait until an appraisal programme next year to get a clearer idea of the potential:
The latest Sapele-3 result has more questions than answers. We believe the shares are unlikely to perform until the appraisal programme starts in 2012. Timing and funding of any commercial discoveries remain the key concern for Bowleven investors. Hence we cut our recommendation to neutral and target price to 80p a share in the short term.
