Photo: Stena IceMAX drillship is drilling Bahamas Petroleum Company's well; Source: Stena Drilling

BPC spuds Perseverance well off Bahamas

Bahamas Petroleum Company (BPC) has started drilling its eagerly anticipated Perseverance #1 well located offshore the Bahamas, using the Stena IceMAX drillship.

The well was spud on 20 December 2020 and it is anticipated to take 45 – 60 days to complete, BPC said on Monday.

The Perseverance #1 well is targeting P50 prospective oil resources of 0.77 billion barrels, with an upside of 1.44 billion barrels.

BPC has experienced delays and increased costs while preparing to drill the Perseverance #1 well due to Covid-19 mitigation measures.

BPC has also faced disruptions from environmental activists who raised concerns with a Bahamas court related to the company’s plans to drill the Perseverance #1 well.

The company believes the objections are without merit and opposed the application.

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Following the well spud, Simon Potter, Chief Executive Officer, commented: “This is a momentous milestone for both BPC and The Bahamas and represents the culmination of more than ten years work by a team who have remained steadfast in their belief in this project throughout – that it is finally taking place is a testament to the application, skill and professionalism of many people over those years”.

Potter added: “More than a decade ago BPC secured several offshore hydrocarbon licences in the far-southern waters of The Bahamas. Convinced of the compelling prospectivity of those licences, the Company has spent close to $120 million bettering our technical understanding, continuing to de-risk the play, and ultimately preparing meticulously for exploration drilling.

“Our 3D seismic survey revealed structures that have the potential to contain a world-class, multibillion barrel oil resource that, if present in the way we hope, could prove to be transformative – not just for our company, but for the nation and people of The Bahamas as a whole”.

BPC has recently entered into agreements with a European alternative asset manager, under which BPC has the potential to access gross funding of £15 million ($20 million).

Under the terms of a funding agreement entered into, BPC was to immediately receive gross proceeds of £7.5 million ($10 million) through the issue of 375,000,000 new ordinary shares at a price of 2.0p each.

Alongside the funding agreement, BPC also entered into an option agreement, whereby it has an option, at its sole discretion, to raise up to a further £3.75 million ($5 million) from the investor within 10 business days after the spud of the Perseverance #1 well on substantially the same terms.

If BPC so elects, the investor has the option to double that amount, thereby providing it discretionary access to the full £15 million ($20 million.

The transaction enhanced BPC’s overall funding capacity.