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Bahamas Petroleum Company could be worth double as Perseverance well nears - broker

“We sense that announcement of a rig contract will be a particularly noteworthy milestone for investors to look forward to," said analyst Craig Howie.

Bahamas Petroleum Company PLC - Bahamas Petroleum Company could be worth double as Perseverance well nears - broker

Bahamas Petroleum Company PLC (LON:BPC) could be worth nearly double its current price as the company counts down to its maiden exploration well, that’s the view of house broker Shore Capital.

The AIM-quoted explorer last week effectively secured sufficient funding to ensure that the Perseverance-1 well can go ahead, likely in April, with or without a farm-out partner.

In a note today stockbroker Shore Cap said rig contract news could be among the next key milestones.

“Whilst a farm-out deal remains firmly on the agenda, offering the potential to act as a powerful share price catalyst in due course, BPC is now pressing on towards drilling of “Perseverance-1” on a 100% owned and operated basis,” the analyst said.

READ: BPC is a small-cap throwback as high impact exploration is increasingly rare

“With critical components of the well financing package already in place and assuming that a US$13.3m conditional convertible note is finalised as expected, Perseverance-1 is essentially funded, allowing BPC to focus on its drilling plans.

“We expect BPC to make further announcements in the lead up to spudding.”

“We sense that announcement of a rig contract will be a particularly noteworthy milestone for investors to look forward to, as BPC targets significant prospectivity across acreage which has already been substantially derisked and delineated over several years.”

Shore Cap has today updated its valuation to reflect the progress towards Perseverance and, pitched at 8p per share, the broker’s ‘risked NAV’ for the company compares against a current share price of 4.25p.

Howie notes that Perseverance is expected to spud in April with results likely following later in the second quarter.

He describes Perseverance as a “high impact well, targeting world class prospectivity and offering genuine company-making potential” – indeed, at close to 800mln barrels it is among the standout exploration projects available to investors anywhere this year.

Highlighting a potential investment opportunity, the analyst added: “We see significant remaining running room for the shares, in anticipation of continued positive news flow and highlighting the fact that – notwithstanding the obvious exploration risks – our approach continues to be based on conservative assumptions.”

Quick facts: Bahamas Petroleum Company PLC

Price: 1.4 GBX

LSE:BPC
Market: LSE
Market Cap: £31.1 m
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Bahamas Petroleum chief says additional loan is a major boost to the...

Simon Potter, Bahamas Petroleum PLC's (LON:BPC) chief executive, says the increased funding facility from its backer in the region is a tremendous boost to the Perseverance project. The family office concerned has increased its convertible loan facility to £16mln from £8mln. That will...

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