By Sa’ad Bashir, in Dar es Salaam
Bowleven has completed due diligence on the Kilwani North Development Licence and Ruvuma PSA, both onshore Tanzania.
And the company feels it should simply leave these assets alone.The AIM listed minnow has “decided not to pursue its interest in the proposed acquisition”.
The terse statement announcing the cancellation of plans is at odds with the exuberance projected in the November 19, 2015 release about the Heads of Agreement between Bowleven and Aminex, (the holder of the licences).
The deal had an aggregate gross consideration of up to $28Million comprising $8.5Million cash, $10Million carry, $5Million share-based element and $4.5Million in contingent payments.
The plan was for Bowleven to acquire:
- 25% interest in the soon to be producing Kiliwani North Development Licence (KNDL); and
- 50% interest in the proven and highly prospective Ruvuma PSA.
The company was hoping it would gain:
- A low cost entry into a rapidly expanding Tanzanian gas market with substantial existing infrastructure with spare capacity;
- Near-term high quality production providing cash flow from the essentially complete Kiliwani North development;
- Access to extensive exploration and appraisal potential on the Ruvuma PSA, with the opportunities for near-term gas-to-power into the local market and longer term gas sales into adjoining major existing trans-Tanzanian pipeline to Dar Es Salaam.
An Appraisal drilling was even planned for Ruvuma PSA early 2016.
Now, everything has been cancelled.