About the company
Bahamas Petroleum PLC (LON:BPC) has five offshore licences covering four million acres and applications for a further five.
According to broker Shore Capital, the explorer is on the “critical path towards drilling”.
A series of agreements are in place as part of a coordinated approach towards drilling an initial exploration well in the first half of next year.
Some big names were hired with Halliburton providing well services on a Seadrill drilling rig, and Baker Hughes providing other equipment.
“BPC [Bahamas Petroleum has set a clear course towards the drilling of a maiden well on its southern licences, which have been substantially de-risked and delineated over several years and continue to provide world-class prospectivity,” said Shore’s analyst Craig Howie.
How it is doing
The company’s hotly-anticipated first exploration well is expected to get underway in late May or early June.
It said that the well, to be called Perseverance-1, will be drilled in the northern segment of the ‘B Structure’ to target some 770mln barrels of recoverable prospective resources, with the ‘upside case’ estimates potentially pitched twice as high.
The B Structure is seen across some 70-80 kilometres and could host up to multi-billion barrels of crude resources.
Funded for Perseverance
BPC recently doubled a £8mln convertible loan facility with a local family office to £16mln, though it still wants to bring in a farm-in partner to help with costs of drilling the well.
In a statement, the group said the estimated cost of drilling its 100%-owned and operated Perseverance #1 well, targeting recoverable prospective resources of up to 1.4 bn barrels of oil, is between US$25mln and US$30mln.
The company's overall funding capacity for its strategy is now approximately US$45mln.
What the boss says: Simon Potter, chief executive
“Materially increasing the size of the facility with the same investor on an immediate, unconditional basis is, in and of itself, a tremendous boost for the project,
“Moreover, for the company to achieve this in the face of the decline in oil price and the global adverse impact of the Covid-19 virus is an enormous vote of confidence in the company, our planned drilling activity and the robust nature of our prospects."
What brokers say
SP Angel analyst Sam Wahab, in a note on 20 February, said: “Whilst a farm-out would be the company’s preferred source of funding for its first well, the [convertible] facility does provide shareholders comforts that BPC’s long-awaited well will be delivered this year in our view.
“If successful, Perseverance-1 would be transformational for the company, and indeed the frontier region in which it operates.”
- Spudding of Perseverance
- Farm-in partner found
- Oil price rallies