Bahamas Petroleum Co - Operational Update - Perseverance #1
Bahamas Petroleum Company plc
("BPC" or the "Company")
Operational Update - 'one month out' to Perseverance #1
In the lead-up to the drilling of Perseverance #1, BPC's obligation exploration well in The
· Perseverance #1 is on track to spud before the end of 2020:
o 100% equity to BPC, drilling of this potential basin-opening well anticipated to take between 45 and 60 days, with 'tight-hole' procedures in place
o targeting recoverable prospective resources of 0.7 billion barrels of oil, with an upside of 1.44 billion barrels, solely for the northern portion of the B structure
o in the event of success, Perseverance #1 would substantially de-risk the total B structure, which extends for between 70 and 80 kms, has a mapped areal closure of over 400 km2, and has a 'best estimate' aggregate recoverable resource potential in excess of 2.0 billion barrels
· The Stena IceMAX, one of the most technically capable drill ships in the world, has completed all necessary vessel and equipment inspections, and is scheduled to leave dock in The
· Specific transportation procedures, isolation mandates and quarantine protocols are in place to minimise any risk of Covid-19 disruption to the operation, supplementing comprehensive, approved environmental safety standards and procedures; the Bahamas Defence Force and US Coastguard have been briefed on operating and safety preparations
· All material contracts and supply arrangements completed, logistics and mobilisation plans finalised
· Formal confirmation from the Government of The
· Within BPC, the outcome of the Perseverance #1 well is now set within the strategic context of a portfolio business, with production and cashflow generating assets and a growing opportunity set of complementary assets across multiple jurisdictions
"Many shareholders have been extremely patient and have stayed the distance, as has the majority of the management team, and we are now in the position to deliver the Perseverance #1 exploration well in compliance with our long-held exploration licences in The
At the same time, our activities, in the event of success, have the capacity to be economically transformative for the nation of The
BPC is fully committed to ensuring safe and responsible operations, and has assembled an experienced team of drilling personnel, supported by many of the world's largest and most respected oil services contractors, with a collective track record of drilling many thousands of wells safely, all around the globe. We are especially pleased that one of the most modern, technically capable drilling vessels in the world will soon leave port ahead of drilling. In support of this, logistics plans to mobilise both equipment and personnel safely to site have been finalised, funding is in place, and we have completed a huge body of work to ensure that best practices have been applied as our health and environmental safety plans and protocols have been developed, contracted, and approved.
I look forward to updating shareholders of our continued progress - this is an exciting time for BPC."
About Perseverance #1 Well
Perseverance #1 is an offshore oil exploration well, 100% owned and operated by BPC, to be drilled starting in late 2020 at a location in the far southern territorial waters of The
The Perseverance #1 well is targeting the northern segment of the B megastructure as previously identified by 3D seismic analysis. 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 at the crestal point on the northern segment of the very large B structure. The well will be located in water approximately 520 metres deep, and will be drilled to a target depth of 4,822 metres, but with a capability to be able to reach 5,600 metres, 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.
The best estimate prospective recoverable oil resource at the Perseverance #1 location is 767 million barrels, with an upside of 1.444 billion barrels (assuming the same recovery factor). 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 approximately 75 kilometres along strike and accommodates over 400 km2 of mapped closure with the entire structure having a combined 'best estimate' prospective resource of in excess of 2.0 billion barrels, and gross column height of up to 1,000 meters.
In accordance with Bahamian law and the terms of BPC's licences, as a precursor to drilling operations BPC was required to prepare and submit a comprehensive Environmental Authorisation to the Government of The
Perseverance #1 will be drilled making use of the Stena IceMAX, one of the most technically capable, advanced drill ships available in the world. The rig is dynamically positioned, dual-derrick, has an integrated Managed Pressure Drilling system on board and an advanced well management and safety system, which will be deployed for the duration of drilling. Befitting of the transformational, flagship nature of this well, a number of leading international oilfield companies will be providing equipment and specialist technical services for various aspects of the drilling program, including Halliburton, Schlumberger, BakerHughesGE and Weatherford.
The drilling program for Perseverance #1 is expected to take between 45-60 days, and will be undertaken on a 'tight-hole' basis - an industry protocol (and one required by the Government of The
The Perseverance #1 well in is on track to spud before the end of 2020 - that is, within approximately 6 weeks of the date of this announcement. A separate and distinct operational management and execution group within BPC is entirely focussed on the successful delivery of this core company objective. Key operational developments include:
· Bridging documentation necessary to the proposed drilling campaign has been agreed between
· A 'Drill the Well on Paper' exercise is scheduled to take place on
2. Operational Readiness
· The BPC drilling team is assembled with the capability of operating from a single operational location in
· As noted, the Stena IceMAX is equipped with a Managed Pressure Drilling ("MPD") system, an advanced well management and drilling safety system that represents the 'cutting-edge' of drilling technology currently available. The MPD is operated by Schlumberger, one of the world's pre-eminent oil services companies, who will have specialist technicians and representatives on board the IceMAX for the duration of drilling operations. All relevant MPD preparatory work is complete, including requisite inspections completed and service agreements put in place with Schlumberger.
· The logistics plan for Perseverance #1 has been completed, with complex arrangements finalised for inspection services, supply boats, helicopters and charter airplane services knitting, together operating/shore bases in the
· Consistent with industry standards and as required pursuant to Bahamian and internationally applicable laws, a range of safety drills and inspections have been successfully conducted by BPC staff, independent third-party inspectors and relevant Government/Ministry representatives (both in person and remotely). This includes completion of the rig inspection, helideck inspection, third-party equipment inspection, and inspection of the blow-out preventor ("BOP"), equipment and materials storage etc.
· As previously announced, BPC has placed an extensive suite of insurance policies to cover drilling operations for Perseverance #1, including an appropriate well control policy. This is as required under the terms of BPC's licences in The
· In recent months, BPC has undertaken an extensive body of work, in conjunction with
· Safety and environmental management systems have been finalised and documented along with bridging documents into
· A contract with International SOS has been finalised to provide a project specific Medical Evacuation Response Plan ("MERP") including a credentialled network of medical providers, that complements and progresses the offshore MERP that is provided for on the Stena IceMAX. The MERP includes access to a project specific medical assistance via a 24/7 designated Assistance Centre, out-patient and in-patient case management, and medical assistance for workforce travelling to and from the various project sites.
4. Formation Evaluation Plan
· BPC's geotechnical risk mitigation strategy for the drilling and evaluation of the Perseverance #1 well seeks to effectively de-risk each of the pre-drill risk elements - top seal, reservoir quality, oil quality and source rock presence/maturity. However, as previously noted, the primary objective of the well is to establish the presence and distribution of hydrocarbons throughout the targeted reservoirs.
· Accordingly, BPC has developed a comprehensive formation evaluation plan that prioritises the measurement, logging and acquisition programme to fit this core objective. Considerable attention has been placed on the reliability, robustness and configuration of the Measurement While Drilling (MWD) / Logging While Drilling (LWD) tool. This includes redundancy/duplication in the data gathering processes, and planning for tool assembly in all potential hole sizes. High bandwidth recording will be maintained downhole at all time to be retrieved at each trip/bit run to provide real-time drilling results.
· In the normal course of drilling, a full suite of logging and measurement while drilling logs (gamma-resistivity, sonic density and neutron) will be acquired, thereby providing formation data and a synthetic seismogram (sonic-density), both of which will be used to calibrate real time well data to identified seismic markers to correlate the reservoir targets and age each of the penetrated horizons. In all instances, formation evaluation while drilling (FEWD) tools will gather data on temperature, formation pressures, porosity (including fractures), oil and water saturations and total thickness of the potential hydrocarbon bearing reservoirs regardless of outcome - further augmented by a wide range of wireline logging and sampling should results while drilling be merited.
· The comprehensive formation evaluation data retrieved from Perseverance #1 can be utilised to update the pre-drill volumetric estimates in a successful outcome scenario.
In accordance with the requirements of BPC's licences, BPC has formally notified the Bahamian Department of Environmental Protection & Planning ("DEPP") as to the precise well location, as well as the specific details and technical specifications in respect of the Stena IceMAX drillship, and has obtained the DEPP's consent to same. BPC is currently working with the Government of The
As agreed with the Government of The
BPC has received formal confirmation from the Government of The
In accordance with the AIM Note for Mining and Oil & Gas Companies, BPC discloses
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 647 882
Strand Hanson Limited - Nomad
Tel: +44 (0) 20 7409 3494
Shore Capital Stockbrokers Limited - Joint Broker
Tel: +44 (0) 207 408 4090
Investec Bank Plc - Joint Broker
Tel: +44 (0) 207 597 5970
Tel: +44 (0) 020 3757 4980
Notes to editors
BPC is a
BPC is listed on the AIM market of the London Stock Exchange. www.bpcplc.com
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