TIDMBPC
RNS Number : 3625B
Bahamas Petroleum Company PLC
30 January 2020
30 January 2020
Bahamas Petroleum Company plc
("Bahamas Petroleum" or the "Company")
H1 2020 Operations Roadmap to Drilling
On track to deliver Perseverance #1 exploration well results in
Q2 2020
Targeting recoverable P(50) oil resources of 0.77 billion
barrels, with an upside of 1.44 billion barrels
Bahamas Petroleum Company, the oil and gas exploration company
with significant prospective resources in licences in The
Commonwealth of The Bahamas, is pleased to provide the following
update on its planned H1 2020 drilling campaign.
Highlights
-- Drilling of exploration well expected to commence in April
2020 with results expected to follow later in Q2 2020
o Licences and exploration well 100 per cent. owned and operated
by BPC
-- Well location finalised for northern segment of the B structure
o the well has been named Perseverance #1
o targeting P(50) recoverable prospective resources of 0.77
billion barrels of oil, with an upside of 1.44 billion barrels,
solely for this northern structural closure portion of the B
structure
o In total the B structure extends for between 70 and 80 kms,
has a mapped areal closure over 400 km(2) and has an aggregate most
likely recoverable resource potential in excess of 2.0 billion
barrels
-- Temporary field office set up and staffed to deliver well
o well design and planning substantively complete
o major contractors integrated into the well execution team
o procured further long-lead items including drill bits and
casing
o completed tendering for helicopter, supply boats, and various
other required support services
-- Deadline for satisfaction or waiver of all conditions
precedent in relation to the GBP10.25m conditional convertible loan
note extended to 9 March 2020
-- Further announcements on contracting, financing and approvals
expected in lead up to mobilisation and drilling
Simon Potter, Chief Executive Officer of Bahamas Petroleum
Company, said:
"BPC is in the final stages of readiness for the commencement of
drilling our initial exploration well, Perseverance #1, in The
Bahamas, with results from the well expected in Q2 2020. The well
location will be on the northern segment of the B structure,
targeting a P(50) recoverable resource of 0.77 billion barrels, but
with an upside close to 1.5 billion barrels of recoverable oil.
Perseverance #1 has the potential to open a world class, new
frontier basin offshore Bahamas, less than 200 miles from the
world's largest hydrocarbon market/infrastructure. In our view this
makes Perseverance one of the premier prospects that could be
drilled globally this year with the potential to not only
fundamentally alter the status of BPC in the market, but to also
transform the revenue generating capacity of the Bahamian
economy."
Perseverance #1 Well
The Company is on-track to drill Perseverance #1, the Company's
initial exploration well in The Bahamas, and deliver the well
results during Q2 2020.
Perseverance #1, which is 100 per cent. owned and operated by
BPC, is to be located in the northern segment of the B
megastructure. The target P(50) prospective recoverable oil
resource at this location is 0.767 billion barrels, with an upside
of 1.444 billion barrels (assuming the same recovery factor), and
downside volumes approximating to the minimum economic field size
at currently prevailing oil prices. This location has been chosen,
based upon high resolution 3D seismic data, as the best balance of
lowest technical risk, geological conditions and recoverable
volumes, with a significantly better developed top seal and
reservoir characteristics at this crestal point on the northern
segment of the very large B structure. It is anticipated that any
discovery at this location has the potential to extend into a
larger portion of the overall B structure extending to the
south-east. In aggregate, the entire B structure extends for
between 70 and 80 kilometres along strike and accommodates over 400
square kilometres of mapped closure with the entire structure
having a combined most likely potential resource of in excess of
2.0 billion barrels.
Perseverance #1 will be located in water approximately 518
metres deep, with a target depth of 4,822 metres, but with a
capability to be able to reach 5,600 metres, thereby affording the
ability to evaluate multiple reservoir horizons throughout the
entire stratigraphic column below the Tertiary cover. The ultimate
decision on well depth will depend on real-time drilling results
and geological information.
Operations
The Company has established a temporary field office (in
Houston, Texas USA), supplementing the Company's existing permanent
offices in Nassau (The Bahamas) and the Isle of Man. The field
office has been staffed to manage and support drilling and well
operations, and includes personnel with a breadth of global
expertise and experience in well design and engineering, offshore
drilling (including the use of Managed Pressure Drilling systems),
logistics and planning. Major well services contractor Halliburton
has integrated staff into the Company's drilling execution
team.
Safety and environmental management systems have been finalised
and documented along with bridging documents into the rig
operator's systems and Safety Case. BPC's incident response systems
and procedure will be tested/verified prior to commencement of the
well by OSRL, the Company's contracted response specialists,
through the organisation of an extensive desktop exercise
simulating an incident requiring an emergency response. This
exercise will include BPC management and operating staff, the rig
operations team, domestic Bahamian authorities and multiple invited
governmental agencies from across the region.
Procurement
Over the past months, the Company has been working to finalise
the process of rig selection and contracting with Seadrill, and to
advance contracting for other services (including the master
services agreement with Halliburton for integrated downhole
services) and various other equipment required for the drilling
campaign.
Physical inspection of the proposed rig is scheduled to occur
shortly, whilst it is in port for class certification.
Subsequently, the Company expects to be in a position to finalise
and enter into the definitive contract for the rig in the coming
weeks.
In parallel, the Company has placed long-lead orders for casing
and drill bits and will shortly be finalising contracts for the
provision of supply vessels, and helicopter services to the rig
following an extensive tendering process. The Company expects to
complete its contracting for a further range of other necessary
services and equipment supplies over the coming weeks.
The Company has appointed AON as its insurance broker, is in
receipt of a number of quotes and is currently working through
these with AON ahead of finalising an appropriate package of
insurance policies for the intended drilling campaign.
Financing
Consistent with its overarching approach to financing for the
Perseverance #1 well, the Company continues to be in discussions
with a number of potential farm-in partners - further announcements
will be made in this regard if and when appropriate.
Institutional marketing of the Bahamian Mutual Fund to
qualifying institutional investors in The Bahamas has been well
received. Indications of demand are expected towards the end of the
subscription period.
In October 2019, the Company entered into a subscription
agreement in relation to a conditional convertible loan note
investment of GBP10.25 million. The rationale, key terms, and
conditions of that agreement were detailed in various announcements
made by the Company at that time (refer specifically to the
Company's announcements made on 21 August 2019 and 10 October 2019,
and also to pages 20 and 21 of the Company's Open Offer Circular,
which is posted on the Company's website and was despatched to all
shareholders on 18 October 2019).
Recognising the extent of the well programme and the consequent
time taken to finalise a number of key contracts, the Company and
the parties to the conditional convertible loan note subscription
agreement have agreed to extend the date for satisfaction or waiver
of all conditions precedent to 9 March 2020, with all other terms
and conditions unchanged. The Company is working to achieve timely
satisfaction (or waiver) of the conditions precedent, and will
advise shareholders accordingly in relation to these, as
appropriate.
Approvals
Over the past several months, the Company has also progressed
discussions with the Government of The Bahamas and submitted
required documents consistent with its application for
Environmental Authorisation in accordance with the timetable agreed
with the Government and its advisers. BPC remains confident of
receiving appropriate approval in a timeframe consistent with the
Company's intended drilling campaign.
Regulatory Statements
In accordance with the AIM Note for Mining and Oil & Gas
Companies, Bahamas Petroleum Company discloses that Randolph
Hiscock, Bahamas Petroleum Company Technical Lead, is the qualified
person who has reviewed the technical information contained in this
document. He has a Masters in geology and is a member of the AAPG.
He has over 35 years' experience in the oil and gas industry.
Randolph Hiscock consents to the inclusion of the information in
the form and context in which it appears.
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information, please contact:
Bahamas Petroleum Company plc Tel: +44 (0) 1624
Simon Potter, Chief Executive Officer 647 882
Strand Hanson Limited - Nomad Tel: +44 (0) 20
Rory Murphy / James Spinney / Jack Botros 7409 3494
Shore Capital Stockbrokers Limited Tel: +44 (0) 207
Jerry Keen / Toby Gibbs / James Thomas 408 4090
CAMARCO Tel: +44 (0) 20
Billy Clegg / James Crothers 3757 4983
www.bpcplc.com
END
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END
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