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Bowleven lashes ‘defamatory’ Crown Ocean

UK player hits out at largest shareholder’s claims as it posits its own ‘facts’ ahead of key meeting

UK junior Bowleven has labelled accusations against it by shareholder Crown Ocean Capital as “defamatory” as it swatted away a series of claims made by the agitator group, including of the “catastrophic financial performance” of the company.

Bowleven urges ‘No’ vote on investor move

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Bowleven’s board urged shareholders to vote against all recommendations made by the private investment company - its largest single shareholder - at a general meeting, which it began the process of convening earlier this week.

London-listed Bowleven is resisting what it sees as a takeover attempt by the 16.23% stakeholder, with the company’s non-operated interest in the Etinde gas field project off Cameroon the prized asset. Crown Ocean has denied there is any attempt to take over the company.

Bowleven earlier this week called proposed changes to the company from Crown Ocean as “self-serving”, leaving the latter to come out fighting with a lengthy list of grievances against the UK minnow – including perceived mismanagement and the overpayment of directors.

NewAge ready to discuss development of Etinde

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In a statement on Friday, however, Bowleven’s board addressed what it termed “10 significant errors” in Crown Ocean’s open letter “that should not pass unchallenged”. These included challenging the claims that $44 million had been spent on directors’ pay in the past 10 years, with Bowleven saying the actual figure is $33 million – and that the current cumulative total of $1.08 million per annum to the three directors is “wholly in line with similar-sized industry peers”.

Crown Ocean, which Bowleven abbreviated to “COC” throughout in Friday’s statement, accused the company of not implementing sufficient cost savings measures during the industry downturn. Bowleven claimed, however, that it has cut staff from around 70 to 24.

The shareholder accused Bowleven directors of using a share buyback programme to influence the stock, something Bowleven’s board not only denied but said “to suggest otherwise is defamatory”.

"The board has never used, and would under no circumstances contemplate using, the purchase by the company of its own shares to influence the share price. To suggest otherwise is defamatory."
Bowleven board of directors

Bowleven also said Crown Ocean’s claim that it never expressed interest in a management buyout (MBO) was false. “The management … was approached by COC in 2016 with a view to seeking their support for an MBO at a level equivalent to the cash balance of the company. COC expressed its interest in funding the MBO by borrowing against the cash balance held by the Company, apparently unaware of the incompatibility of this proposal with UK company law,” Friday’s statement read.

“The chief executive cfficer of Bowleven met with a representative of COC on 15 August 2016, at which COC was informed that a bid in the range contemplated by COC was not capable of recommendation to shareholders.”

Etinde wells 'hanging' on New Age decision

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Further claims by Crown Ocean of the “questionable independence” of Bowleven directors and that the latter was responsible for delays in appraisal drilling at Etinde were similarly knocked back, as were claims made in relation to the company’s other asset in Cameroon, the Bomono permit.

Responding to Friday’s statement from Bowleven, Crown Ocean said: “We see no need to add to either our view or the facts as previously stated and we wish to avoid irritating fellow shareholders with repetition. We stand fully behind our open letter to shareholders.”

Plans for appraisal drilling on the Etinde permit – which Bowleven used to operator - have been put on the back-burner as current operator New Age seeks to first finalise a development solution for the gas discovery.

Etinde drilling to target 3 Tcf resource for LNG project

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New Age was intending to drill a pair of appraisals this year targeting up to an additional 2 trillion cubic feet of in-place gas resources, plus liquids, which could lift overall volumes at the find to as much as 3 Tcf.

However, the drilling campaign, which was expected to begin last year, was postponed as New Age is still evaluating development options – including scope for an early-stage development – that align with the government’s preferred offtake options.