It has taken a bit longer than I had hoped, but we have now had the first sign that AIM-listed Bowleven (BLVN) might be set to come good. I tipped this stock at around 31p a year ago in the ShareProphets Christmas tip-fest, hoping that it would be all over by now, and top-sliced at above 37p. Since then the shares have drifted slowly back to the mid 20s but now the company announced plans to cough up 15p a share as a special dividend next month and the shares have responded higher to 32p. I hope a few managed to follow my upgrade to BUY during November, at just 25p. This was always an asset play: the company had a pile of cash and a decent stake in the Etinde field off Cameroon – but did not have control over it. Two drills last year (fully carried) with some success (but not the gusher some may have been hoping for) and here we are. So where does all this leave us?
The dividend will cost Bowleven around £50 million – which is around $64 million. At the last balance sheet the company had cash and investments of around $80 million which will therefore leave just $16 million over as a war chest. But the company sounds very confident of the $25 million payment which will be triggered on a Final Investment Decision by the joint venture partners in the short to medium term, stating that the dividend takes into account: The Board's expectation of reaching FID on Etinde in the short to medium term, triggering a payment of $25 million from JV partners. We also know that: The upcoming Etinde work programme and budget has now been agreed amongst the upstream joint venture partners for 2019. The detailed effort will contribute towards the interpretation of the data and the development options for the block with a view to its commercialisation.
Since I assume that Bowleven had been hanging on to the cash in order to keep its options open with regard to participation in future spending on Etinde (and return surplus cash to shareholders) it sounds as though things are well on the way. As I read it, the $25 million bonus looks to be on the way, at least in principle. And that suggests that the joint venture partners, Lukoil and New Age, are going for it – which suggests further upside. That will leave the company with around $40 million in cash. Add on the special dividend of $64 million and we are up to $104 million, or £82 million, and a fully diluted 20% stake in Etinde. As things stand, Bowleven is capitalised at £107 million which suggests that either the market is discounting the cash or only valuing Etinde at £25 million. That sounds very low indeed, especially when compared to the sale of 40% of Etinde for $180 million (so far), free carry on last year’s drilling and another $25 million on the Final Investment Decision (which now looks to be almost in the bag).
It is entertaining to compare the proved assets of Etinde, at apparently a whopping discount, to the assets of UK Oil and Gas (UKOG). I know which I would rather be holding now! It is also worth noting, as Waseem Shakoor does, that we have a mightily unusual situation in that we have an AIM-listed company – and an oil/gas play at that – RETURNING cash to shareholders. He also notes that while some were slating Crown Ocean (who led the removal of the old board), we have now seen costs slashed, cash handed back and two (feely carried) appraisal wells. This is great stuff for Crown Ocean, which will be delighted to be getting around half of its investment back in cold hard cash. One might wonder why Bowleven is holding on to the other $16 million. I daresay we might find out when the plans for Etinde this year are made public – perhaps Bowleven is going to pony up a small amount towards current plans. One thing I’m pretty sure of, however, is that there won’t be enough for the company to blow it on anything new. With 15p per share now winging its way back to me, I’m happy enough. And as Waseem Shakoor notes, this all marks out Crown Ocean as an activist investor to watch – and follow. Everything it promised has been done. At 32p this still looks cheap, and especially so if the $25 million comes in. Now, where’s that bottle of Ouzo?
Filed under: Bowleven, Anglo African, Morrisons, Greene King, Joules, Accrol, Optibiotix, Bluejay Mining
RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.
Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.
Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.
We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.
You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.
There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.
Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?
Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now
We've put together a panel of top tipsters, including:
Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"
Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit
Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks
Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books
Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers
Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies
Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments
The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view
Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.