Bowleven, a West Africa focused oil and gas exploration group, has entered into a revised option agreement with Vitol E&P (Vitol) regarding the Etinde Permit (Etinde), offshore Cameroon.

As per the agreement, which replaces the previous option arrangement, Vitol have an option to acquire a 10% participating interest in block MLHP-7, Etinde, in return for funding an agreed $50m gross appraisal work program.

The option expires on the earlier of the spud date of the next appraisal well on block MLHP-7 or 31 March 2011.

The option arrangement excludes blocks MLHP-5 and MLHP-6, Etinde, where the Sapele-1 exploration well is currently being drilled.

Bowleven said that it will retain operatorship of all three blocks.

The nature of the option and its applicability to only block MLHP-7 reflects Vitol’s primary focus on appraisal and developmental activities and the understandable requirement for further technical work to be completed prior to a firm future development and appraisal plan being agreed on the IE and IF field areas.

Bowleven and Vitol currently have participating interests of 75% and 25% respectively in the Etinde Permit.

In the event of option exercise, Bowleven’s participating interest in block MLHP-7 would be 65% with effect from the date of exercise, with its participating interest in blocks MLHP-5 and MLHP-6 remaining at 75%.

The Etinde PSC effectively restricts the equity that can be transferred to a new participant to a minimum of 25% (pre state back-in).

Consequently by retaining a greater equity position, Bowleven retains the flexibility to bring in a further partner, if deemed appropriate, whilst still retaining a material ongoing position.

The Etinde joint venture is currently drilling the high impact Sapele-1 exploration well on block MLHP-5 (Bowleven participating interest 75%).