TIDMBPC
RNS Number : 9823V
Bahamas Petroleum Company PLC
13 August 2020
13 August 2020
Bahamas Petroleum Company plc
("BPC" or the "Company")
Operational and Corporate Update
Bahamas Petroleum Company plc ("BPC"), the Caribbean and
Atlantic margin focused oil and gas company, with exploration,
appraisal, development and production assets across the region, is
pleased to provide the following update in relation to a range of
operational and corporate matters.
Corporate Presentation
BPC has today released an updated corporate presentation, which
is available on the Company's website at www.bpcplc.com as well as
via the following link:
http://www.rns-pdf.londonstockexchange.com/rns/9823V_1-2020-8-12.pdf
The presentation provides consolidated introductory information
on BPC's expanded portfolio of assets, following the recent
completion of the merger with Columbus Energy Resources plc,
including the Company's intended work programme, as well as a clear
statement of the Company's goals and targets in the coming 18
months in terms of exploration activities, resource and reserve
maturation, production growth and potential cash generation
(depending on oil price assumptions). Shareholders are encouraged
to read this presentation in detail. Specifically contained within
this presentation, BPC has provided the following key statements,
goals and targets which the Company has commenced working
towards:
Vision and Strategy: The Company has sought to articulate a
clear statement of its vision and strategy, as follows:
-- Vision: To be a n Exploration and Production (E&P)
business generating reliable, growing production and thus free
cashflows capable of supporting core exploration activities, which
in combination creates significant value for all shareholders.
-- Strategy: A portfolio approach to asset ownership across the
full life cycle of the hydrocarbons business that appropriately
balances risk and reward, ensures access to capital on competitive
terms, and effectively leverages core expertise and experience
within the Company.
In seeking to deliver on our vision and enacting our strategy,
the Company will focus on:
Exploration: core to the Company's ongoing strategy is
maintaining access to large, meaningful exploration opportunities
and appraisal activities across the portfolio. This is encapsulated
in the Company plans for the imminent drilling of the Perseverance
#1 well in The Bahamas and maturing of a prospect inventory in
Uruguay. The Perseverance #1 well is targeting P(50) recoverable
prospective resources of 0.77 billion barrels of oil, with an
upside of 1.44 billion barrels, solely from the northern structural
closure portion of the B structure. In total the B structure
extends 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 billion barrels. The Company's contract
for a drilling rig with Stena Drilling provides a window for
drilling activities to commence between 15 December 2020 and 1
February 2021. In addition, the Company expects over the coming 12
months to further mature its prospect inventory and exploration
plans in the highly prospective South West Peninsular (SWP) of
Trinidad, which will include a full assessment of the potential
from deeper reservoir horizons.
Production: currently, the Company's producing assets in
Trinidad and Tobago have average production of between 400 to 450
barrels of oil per day ("bopd"). The Company is targeting achieving
a stable production level of approximately 500 bopd per day (net)
by end 2020, building to 2,500 bopd (net) by the end of 2021, both
of which targets the Company considers can be achieved through a
combination of maintaining and then increasing production through
(i) increased data integrity, (ii) automation, (iii) overall
increased field activity - returning to the levels last seen in
2018, (iv) selective new wells, (v) enhanced oil recovery (EOR)
programmes, and (vi) other growth initiatives including production
from appraisal of the existing Saffron discovery and extended well
tests ("EWT") in Suriname. In the longer term, the Company
considers that the assets in Trinidad and Tobago and Suriname
provide a bridge to future production from the Company's project in
The Bahamas (assuming a successful exploration outcome). In the
success case, the Company believes that 15,000 bopd (net) would be
an appropriate aggregate production target by the end of 2025.
Reserves and Resources : currently, there is no consistent
estimation of reserves and resources across the Company's expanded
portfolio. For this reason, BPC has initiated a programme of work
to commission an independent third-party Competent Person's Report
(CPR) for the Company's various assets and licences in The Bahamas,
Trinidad and Tobago, Suriname, and Uruguay - a further announcement
will be made on the completion and issue of said report. Based on
information currently available, BPC believes that at the
conclusion of this exercise the Company will be able to report a
current portfolio-wide 2P reserve of 1 mmbbl (net). Thereafter,
ongoing maturation of resource and reserves across the portfolio is
a core busines objective, and based on information currently
available, the Company is targeting a 2P reserve as at end of 2021
of 10 mmbbl (net), and longer-term of 50 mmbbl (net) at end of 2025
(which could be considerably greater depending on the level of
success assumed in The Bahamas).
Cashflow: Consistent with the Company's vision and strategy
statements, generating stable and reliable cash flows is a core
business objective of the Company in the future. Presently, the
Company generates a base level of revenues from sale of production
in Trinidad and Tobago. As the Company moves forward with its plans
to grow production (and assuming stable or increasing oil prices),
the Company expects a corresponding increase in revenues and
cashflows. Assuming the Company is able to achieve its production
target of 2,500 bopd (net) by the end of 2021, the Company's
corresponding cashflow targets by the end of 2021 would be for $15
million revenue (on an annual run rate basis). On this basis, the
Company would be seeking to be in a position, by end of 2021, to be
generating sufficient cash flows to cover all overhead and
operating expenses, and potentially making a considerable
contribution to ongoing capital and exploration expenditures).
The management of BPC believe very strongly in providing clear,
measurable milestones, goals and targets for the benefit of
shareholders, as set out in this announcement and the Company's
presentation. The Company will seek to regularly update the market
on progress against these.
Appointment of Investec as joint broker
The Company is pleased to advise that it has appointed Investec
Bank Plc as joint broker. Investec Bank Plc is an international
banking and wealth management group. The firm's corporate and
investment banking division works with growth-oriented companies,
institutions and private equity funds, offering deep sector
experience in resources and oil & gas and providing its broking
clients with a comprehensive range of solutions spanning capital,
advice and treasury risk management.
BPC's existing broking arrangement with Shore Capital continues
unaffected, and the Company's financial advisory mandate with
Gneiss Energy has been extended for at least another nine months
with Strand Hanson continuing as Nominated Adviser. BPC considers
that the ability to assemble a roster of such high-quality advisers
is a testament to the strength of the Company's current position
and the strategic benefit afforded by the recently expanded asset
base, and provides the Company with access to the skills, expertise
and network necessary over the coming months as the Company moves
forward with its expanded programme of activities.
Executive and Board appointments
The Company confirms that Mr Leo Koot is shortly expected to
join the Board of BPC as a non-executive director, once customary
due diligence checks by BPC's Nominated Adviser are completed.
The Company is pleased to announce the appointment of Dr.
Parbodh Gogna to the role of Health, Safety, Environment &
Security (HSE&S) and Government Relations Director, commencing
from 26 August 2020. Dr. Gogna is currently the Chief Medical
Officer for the Australian Department of Home Affairs and Surgeon
General for the Australian Border Force. In this role, he has been
central to evaluating, developing and implementing procedures for
operating during the pandemic, as well as managing liaison across
all levels of Government. Prior to this role, Dr Gogna has had an
extensive leadership career in both private and national health
services roles, with over 30 years of active medical practice, as
well as serving as a captain in the Australian Special Air Service
Regiment. BPC considers securing the services of a person with Dr.
Gogna's experience and skill set to be especially important at this
time, given that the Company is now engaged in active production
operations in remote locations as well as ramping up for offshore
drilling activities, when effective Government interaction and HSE
planning and execution is more important than ever in the context
of Covid-19's global impact. Dr. Gogna will join the Company's
executive leadership group and will be based in Nassau.
Perseverance #1 operational readiness and force majeure
extension
BPC has received proposals for suitable well control insurance
policies for the upcoming Perseverance #1 well, and has instructed
its insurance broker, AON, to begin the process of placing and
binding that policy. The Company expects this process to complete
within the next eight weeks - a further announcement will be made
at that time.
Liaison between BPC's drilling team and Stena Drilling is
already underway, with the teams working to prepare bridging
documentation to manage the interface between the two companies'
management systems. This work will continue over the coming weeks
along with protocols to assure continuous operations and updating
of the logistics plan for uninterrupted essential supplies and
equipment to the drill ship.
The Company has received formal notification from the Government
of The Bahamas that on an interim basis, a 3.5 months force majeure
extension to the second exploration period of the Company's
southern licences in The Bahamas has been granted, such that the
current term of those licences will now extend to at least
mid-April 2021, and by which time BPC must have commenced well
activities.
Given that the relevant force majeure event is presently
continuing (namely, the impact of the Covid-19 pandemic, currently
ongoing in both The Bahamas and in relevant international
jurisdictions), BPC remains in constructive dialogue with The
Government as to the ultimate full extent of the force majeure
extension. However, the interim extension to mid-April 2021, as now
confirmed, is sufficient to provide certainty for the purposes of
the drilling of Perseverance #1, which is scheduled to commence in
the window of 15 December 2020 to 1 February 2021.
Commenting, Simon Potter, Chief Executive Officer of BPC,
said:
"We are making rapid progress on familiarising ourselves with
the potential of our recently expanded portfolio of assets. The
publication today of our latest corporate presentation provides an
initial view as to where we wish to take the portfolio, our targets
and goals, and what our shareholders can anticipate as we get to
grips with leveraging additional performance. We will expand these
metrics as our confidence on delivery grows, but our strategic
focus, as detailed in our new presentation, is simple and
unwavering: to deliver shareholder value through a combination of
high-impact exploration success and growing production cash flows.
Already discrete teams are focused on delivering immediate
objectives, though none more important than the dedicated drilling
team's total focus on the commencement of the Perseverance #1 well
in The Bahamas later this year.
At the same time, the benefits of BPC's portfolio strategy are
already being felt.
First, we welcome Investec as joint broker to the Company, and
the expanded investor reach they bring. A core rationale for
expanding our business was the view that a portfolio of assets
would be of greater interest to larger institutional investors, of
the type with which Investec frequently works. We look forward to
Investec's input over the coming months, including the depth and
quality of their research analysis to complement that already
provided by Shore Capital.
Second, we welcome Dr. Gogna to our team. As we expand
operations across a broader portfolio, and in particular as we
build-up to drilling of our Perseverance #1 well in The Bahamas, it
is extraordinarily reassuring to attract to the organisation
someone with his skills, network and depth of experience,
especially in regards to developing our operating protocols to
ensure continuous and Covid-19 free operations.
We are also pleased to have received confirmation from The
Government of The Bahamas of an interim force majeure extension to
our southern licences, sufficient to ensure drilling can be
completed consistent with the timelines contained in the rig
contract with Stena Drilling, and in full compliance with the term
and obligations of the licences. We are especially grateful to the
Office of the Attorney General in The Bahamas for their
collaborative approach to working with BPC, even whilst a state of
emergency remains in force in The Bahamas.
These are interesting and exciting times for BPC, and we look
forward to keeping shareholders fully appraised of our progress in
the coming months."
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 7409
Rory Murphy / James Spinney / Jack Botros 3494
Shore Capital Stockbrokers Limited - Tel: +44 (0) 207 408
J oint Broker 4090
Jerry Keen / Toby Gibbs
Investec Bank Plc - J oint Broker Tel: +4 4 (0) 207
Chris Sims / Rahul Sharma 597 5970
CAMARCO Tel: +44 (0) 020 3757
Billy Clegg / James Crothers / Hugo Liddy 4980
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
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 internal reserve and resource estimates in this announcement
have been reported in accordance with the Petroleum Resource
Management System ("PRMS").
Technical terms used within this announcement are as defined in
accordance with the PRMS.
ENDS
Notes to editors
BPC is a Caribbean and Atlantic margin focused oil and gas
company, with a range of exploration, appraisal, development and
production assets and licences, located offshore in the waters of
The Bahamas and Uruguay, and onshore in Trinidad and Tobago, and
Suriname. BPC is currently on-track for drilling an initial
exploration well in The Bahamas, Perseverance #1, in late 2020 /
early 2021, with the well targeting recoverable P(50) prospective
oil resources of 0.77 billion barrels, with an upside of 1.44
billion barrels. In Trinidad and Tobago, BPC has five producing
fields, two appraisal / development projects and a prospective
exploration portfolio in the South West Peninsula. BPC's
exploration licence in Uruguay is highly prospective, with a
potential resource of 1 billion barrels of oil equivalent. In
Suriname, BPC has an onshore appraisal / development project.
BPC is listed on the AIM market of the London Stock Exchange.
www.bpcplc.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDSFEESEESSEEA
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