Bahamas Petroleum to stick with offshore exploration, management advancing new farm-out deal

Bahamas Petroleum Company Plc (LON:BPC) has reaffirmed it commitment to high impact offshore exploration in the Caribbean, stating its intention to extend its licences and seek partners ahead of new well drilling.

The company, in a statement, told investors that it intends to renew the four southern licences in The Bahamas into a third, three-year ‘drill-or-drop’ exploration period.

“Since the completion of the drilling of Perseverance-1, the company has had discussions with industry counterparties in relation to a potential farm-out of its licences in The Bahamas, and is working to formalise an entirely new farm-out process,” BPC said.

It added that such a deal would introduce a funding and operating partner for the next stage of exploration activity.

READ: BPC details opportunities to add value in Trinidad and Suriname

BPC noted that it is presently in the final stages of integrating the well information with its historical dataset, and, expects to start the farmout process upon completing this work in the coming days.

It highlighted: “The Perseverance-1 well did not result in a commercial discovery. The company is, however, encouraged that the results from the Perseverance-1 well indicated the presence of hydrocarbons.

“Technical results from the drilling campaign support the view that other closures, structures and both shallower stratigraphic and deeper structural plays in the company’s licence areas continue to provide significant prospectivity with multiple viable drillable prospects of scale which merit additional study and exploration activity.”

“The newly acquired technical data from Perseverance-1 will facilitate valuable updates and refinements to basin modelling, biostratigraphy and geochemistry.

“In particular, the significance of the new geothermal gradient data placing the oil maturation window deeper stratigraphically has critical implications for the deeper Jurassic play that produces oil in the Eastern Gulf of Mexico from an analogous play type (and which is the current focus for several companies actively exploring in the region).”

BPC additionally noted the expected final drilling costs from the recently completed Perseverance programme at around US$45mln, up around US$10mln from pre-drill estimates with the overruns said to result from heightened Covid-19 procedures (for an additional US$3mln) and the necessity for sidetrack drilling operations related to mechanical debris in the well (costing US$7mln).

The company said it had US$13mln of cash on hand at the start of March, and, it estimated an additional capital requirement of around US$25 to US$40mln across its business.

It said it expects to “more than cover the difference from various potential funding sources”.

Separately, the company also noted the formal contract extension of an exploration area offshore Uruguay, the Off-1 Block which is host to the Lenteja prospect (estimated as 1.34bn barrel target), is expected in the second quarter of 2021.

Story by ProactiveInvestors