Apart from the company’s miserable share price performance under the leadership of the current board, one of the biggest gripes Bowleven’s shareholders have is the board’s failure to deploy any of its huge war chest in a value–accretive manner.
The last few years has seen the worst bear market in oil & gas in well over 30 years. And what has Bowleven’s board done?
Nothing other than pursue an expensive failed exploration programme in Cameroon, beset with operational failures, which is now subject to legal arbitration and launch a failed bid to acquire gas interests in Tanzania from Aminex.
Quite why Bowleven’s board committed such a significant proportion of the company’s funds on the high-risk Bomono exploration play is anyone’s guess. At a time when the world was awash with oil and the price was crashing, wouldn’t it have made better commercial sense to spend more effort on acquiring low cost producing assets?
During the last few years many oil & gas companies have been desperate for working capital, as funds dried up. This has been a buyer’s market for companies with cash. That Bowleven’s board stuck so rigidily to its original plan, without adjusting to market conditions, speaks volumes.
Had the board had the sense to pick up some producing assets on the cheap, Bowleven’s share price could be trading at a significant premium to its current level, having benefited from the strengthening market outlook.
Instead the board sat on its hands (for a change) and did nothing. Now it finds itself subject to a potential shareholder action. The sooner there is significant change in Bowleven the better.