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Bahamas Petroleum Company inks rig contact for Perseverance exploration well

The 770mln barrel exploration well is now slated to get underway by December 15 this year at the earliest

Bahamas Petroleum Company PLC - Bahamas Petroleum Company inks rig contact for Perseverance exploration well

Bahamas Petroleum Company PLC (LON:BPC) said it has inked a rig contract for its hotly anticipated Perseverance-1 exploration well which is slated to start potentially as early as the fourth quarter.

The contract commits Stena Drilling to provide a state of the art, sixth generation drilling rig and associated equipment and services. The well was delayed recently as a result of the coronavirus (COVID-19) pandemic.

READ: BPC fund approved by Bahamas International Stock Exchange

The contract sets a ‘firm window’ of drilling operations between December 15, 2020, and February 1, 2021, consistent with the project’s licence obligations which were extended amid force majeure.

Significantly, the contract sees the estimated costs reduced by around 15% from previously estimated levels, reflecting changes in the global operating environment.

Perseverance-1 is targeted at some 770mln barrels of prospective oil resources and with the anticipated cost savings the company noted that in a success case it will now be able to fund expanded evaluation works within the same cost footprint.

“This decision - to lock in a rig now, at an  already favourable rig rate, rather than try and second guess what markets and availability will look like later in the year - speaks to our intent to ensure Perseverance #1 is drilled at the soonest opportunity, and provides the necessary certainty needed for operational planning,” Simon Potter, Bahamas Petroleum chief executive said in a statement.

“Acting decisively in this way is consistent with our single-minded focus on technical delivery. Importantly, the commercial parameters in the rig contract have allowed us to not only revise down significantly the anticipated well cost, but also clears the way to revisit our funding strategy with adequate time to ensure we have the funds available as and when we need them, on the best possible terms,” he added.

Quick facts: Bahamas Petroleum Company PLC

Price: 2.4 GBX

Market: LSE
Market Cap: £97.18 m

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