Coronavirus spread pushes Bahamas well drilling to October

London-listed oil company Bahamas Petroleum Company (BPC) has further pushed back the drilling of its first exploration well in The Bahamas, the Perseverance #1.


BPC said on Wednesday that the delay was a result of the “massive, unprecedented, and adverse impact of the spread of the COVID-19 virus.”

According to the company, drilling operations planned for the May/June 2020 timeframe can no longer be assured and are rescheduled to October 2020 onwards.

Cost-effective drilling can best be delivered by ensuring continuous operations throughout the entire period of the 45 – 60 day drill plan uninterrupted.

National and regional shutdowns are impacting the ability of drilling rigs and other mission-critical equipment to get properly prepared and certified for drilling due to travel bans and border closures. Also, The Bahamas declared a state of emergency with a curfew in place on March 17.

This is further compounded given the need to take into account the timing of the traditional hurricane season in The Bahamas which happens between July and mid-October.

“The Board has thus concluded that if the company was to continue to seek to commence drilling in the first half of 2020, there would be an unacceptable level of risk to the company’s ability to operate continuously, responsibly, safely, and within currently established guidelines, timelines and, as a consequence, budgets.

“Accordingly, the company has determined to postpone drilling operations until mid-October 2020 onwards, being after the expected peak in the COVID-19 response, and also after the peak risk period for hurricanes in The Bahamas,” BPC stated.

BPC added that the impact of the response to the spread of the coronavirus, both globally and in The Bahamas, also constituted a force majeure event under the terms of the company’s licenses. Due to that fact, BPC expects to receive a corresponding extension to the current term of the licenses from the Government of The Bahamas.

Simon Potter, CEO of BPC, said: “Given the ever-evolving adverse impact of the response to the spread of the Covid-19 virus – which is changing daily and is affecting everyone and all enterprises, around the globe – it has become clear to us that if we continue to push forward with drilling in the first half of 2020, safe and responsible operations would be compromised.

“Shareholders should be encouraged, however, that we are in a strong position to resume drilling activities toward the end of 2020, compared to where we were just a year ago. The company has cash reserves, and financial backers intent on flexibly supporting the company.

“We also have an approved environmental authorization from the Government of The Bahamas, farm-in discussions remain on foot, and the current crisis is presenting a number of interesting alternative opportunities for us.

“The spread of the Covid-19 virus represents a global threat to our collective way of life, and we all have to face reality over the coming months – which in the case of our company means pausing our drilling plans for a time, as hard as that may be. We hope that all of our shareholders, stakeholders, employees, and contractors take care, and stay safe and well in this extremely difficult time for all.”

No change in cost estimate

BPC said that the cost estimate for the Perseverance #1 well was in the range of $25 – $30 million, with potential contingencies for up to an extra $5 million. The company does not anticipate the cost estimate to change due to the rescheduled start of operations.

All previously agreed financial elements would see total funding availability of around $45 million, and issuance of approximately 1.6 to 1.8 billion new shares of BPC.

As a result of the global COVID-19 crisis, a large number of international drilling programs were canceled or postponed, and a large number of rig contractors are revisiting their work programs.

This is expected to have knock-on effects on rig availability and potentially lower rig pricing in the revised drilling window. BPC is already revisiting discussions with a range of contractors for securing a suitable drilling rig for the revised drilling window.

Furthermore, the company will continue to assess options for a farm-out or similar transaction in the coming months, and stated that a number of interested parties, including oil and gas majors and supermajors, have indicated that they would wish for discussions to continue regardless of the coronavirus global crisis and the recent decline in global oil prices.

BPC is also evaluating some potentially value-creating alternative strategic options presented to the company in light of the global COVID-19 crisis.


Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email.

Also, if you’re interested in showcasing your company, product, or technology on Offshore Energy Today, please contact us via our advertising form where you can also see our media kit.

Lees meer

Bahamas Petroleum ‘confident’ of finding drilling partner soon. Raises $2.5M

Source: BPC

London-listed oil company Bahamas Petroleum Company (BPC) is confident it will soon find a farm-in partner for its offshore acreage in the Bahamas, where it has an obligation to drill an exploration well.

 The company on Friday said it had raised $2.54 million via a share placement. The funds raised, together with the existing cash, will be used as Bahamas Petroleum’s working capital over at least 12 months, as it seeks to secure a farm-in partner to finance an exploratory well on the company’s 100 percent-owned Bain, Cooper, Donaldson, and Eneas licenses.

The government of The Bahamas awarded the company an extension until December 31, 2020, for the second exploration period on the licenses back in late February.

During the extension period, BPC has an obligation to drill an exploration well in the acreage which the company says has “a multi-billion-barrel potential.”

BPC expressed confidence on Friday that it would be able to attract a farm-in partner since the licenses have been extended with discussions already ongoing with “a number of potential farm-in partners.”

Simon Potter, CEO of BPC, said: “Our focus at Bahamas Petroleum remains clear and unwavering: to drill an initial exploration well on our highly prospective acreage in The Bahamas.”

“We have a world-class drill-ready asset, with multi-billion-barrel potential as certified by third parties. The Bahamian regulatory regime is fully enacted, and we have a clear license term through to the end of 2020 […]. Now, with today’s placing, we have secured the funds needed as we continue to seek a farm-out agreement, and thereafter move forward to drilling of the initial exploration well and realizing the offshore potential in The Bahamas.”

As for the development of the southern licenses, BPC presented a conceptual forward work plan in June 2017, with an exploration well planned in 2018 – which didn’t happen – and in case of a discovery, an appraisal well would follow in late 2019, and if all goes well, a production would start in 2023 via an FPSO.

It is also worth noting that the search for a partner was not the first one BPC conducted for these licenses. The company suffered a setback last year after an unnamed oil major pulled out from exclusive talks over a potential a farm-in.

Offshore Energy Today Staff

 

Lees meer

Bahamas Petroleum license quartet extended until end of 2020

Source: BPC

The government of The Bahamas has awarded an extension of the second exploration period on four offshore licenses to Bahamas Petroleum Company (BPC).

The four licenses in question are the 100 percent-owned Bain, Cooper, Donaldson, and Eneas licenses. BPC said the licenses would be extended until December 31, 2020. During the extension period, Bahamas Petroleum Company has an obligation to drill an exploration well.

After this period, based on the results of the initial exploration well, BPC will have the option to apply for a production lease over all or part of the license area. Bahamas Petroleum will also have the option to extend the licenses into a third exploration period and/or apply for an appraisal extension.

“The notification received from the Government also stipulates that the Government and BPC must in the coming months agree a forward work program for 2019 and 2020 and a reconciliation of license fees already paid, including during the period of disruption, with any future license fees due up to the end of 2020,” BPC said.

The forward program will include the process for environmental authorization based upon an application already submitted by the Bahamas Petroleum Company in April 2018.

Bahamas Petroleum Company last year suffered a setback after an unnamed oil major pulled out from exclusive talks with BPC over a potential a farm-in, pulled out.

BPC then said it resumed broader, asset-based discussions with third parties in addition to those non-asset based financing discussions already ongoing for the funding of its first exploration well.

The company believes there’s a multi-billion barrel potential in the area. According to a BPC presentation of a conceptual forward work plan from June 2017, an exploration well was to be drilled in 2018 – which didn’t happen – and in case of a discovery, an appraisal well would follow in late 2019, and if all goes well, a production would start in 2023 via an FPSO.

In a statement on Friday, February 22, Bahamas Petroleum Company said it was still looking to secure a farm-in partner for the initial exploration well and that discussions were continuing with multiple third parties.

Simon Potter, CEO of Bahamas Petroleum Company, said: “The confirmation from the Government of The Bahamas that the current term of our four southern licenses extends to December 31, 2020, provides the company with a certainty of tenure over the company’s licenses, replacing any perceived “above ground” issues with complete clarity in fact and law.

“[…] there is now a very clear two-year window to advance plans for and to drill an exploratory well providing certainty to potential partners as we move forward in our farm-out discussions. BPC’s focus remains singular: to implement an exploratory well on its highly prospective assets in The Bahamas to the benefit of shareholders and the people of The Bahamas.”

Offshore Energy Today Staff

Lees meer

Bahamas Petroleum shares plunge after ‘oil major’ pulls out of talks

Bahamas Petroleum Company’s (BPC) shares dropped almost 70 percent on Friday after it announced an oil major it had exclusive talks over its offshore blocks in the Bahamas had backed away. The shares fell to around 2 pence on Friday, from the close of 6.35p on Thursday.

BPC, which has been hoping to secure a farm-in partner for its offshore blocks in the Bahamas, had in May entered into in exclusive 3-month agreement with an unidentified oil major “in conducting an evaluation of the company’s licenses with a view to concluding a mutually beneficial commercial transaction.”

However, in a stock exchange filing on Friday, BPC said the ‘major oil company’ had sent a notice saying it would not further extend the exclusive nature of negotiations beyond 31 August 2018.
Bahamas Petroleum added it had resumed broader, asset-based discussions with third parties in addition to those non-asset based financing discussions already ongoing for the funding of its first exploration well.

Under the original agreement, Bahamas Petroleum Company was to receive a non-refundable cash payment of $250,000 per month ($750,000 in aggregate) for the initial three-month period of exclusivity with an additional $250,000 per month for any extended period of exclusivity, up to a maximum of a further three months.

To-date, BPC said, the company has received US$1 million in exclusivity payments. No further amounts will be due or payable given the exclusivity will not be extended.

Talks resume with other parties. Well financing options explored

Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said: “Appetite for “frontier” exploration has improved as the industry cycle has turned and the company continues to move forward with farm-out and financing options, working closely with our adviser Macquarie.

“The company with which we have been in exclusive negotiations has elected not to extend further the period of exclusivity, which means we will receive no further exclusivity payments. At the same time, having demonstrated interest from an international oil major, we are now able to freely re-engage in discussions with all other parties, which had previously been put in abeyance.”

As previously reported, the talks with all other parties were suspended for the duration of the exclusivity period with the unnamed oil major.

Potter said: “Following receipt of $1 million in exclusivity payments under the Agreement and the raising of additional finance through the placing of shares in May 2018 the Company remains adequately funded to continue developing well-financing options through to completion. We will provide the market with further updates when appropriate.”

Bahamas Petroleum Company currently owns 100% equity in five exploration licenses, Bain, Cooper, Donaldson, and Eneas in Southern Bahamas and Miami in Northern Bahamas. Bahamas Petroleum Company has made three, 100% equity applications named Zapata, Islamorada, and Andros.

The company believes there’s a multi-billion barrel potential in the area. According to a BPC presentation of a conceptual forward work plan from June 2017, an exploration well would be drilled in 2018, and in case of a discovery, an appraisal well would follow in late 2019, and if all goes well, a production would start in 2023 via an FPSO.

Lees meer