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Bahamas Petroleum on track for first well in 2020
21st Aug 2019 12:00
(Sharecast News) - Oil and gas explorer Bahamas Petroleum Company has entered into a series of agreements as part of a coordinated approach toward drilling its first exploration well in the Bahamas in 2020, it announced on Wednesday.
The AIM-traded firm said it was on course to see the drilling of an initial exploration well in the first half of 2020, with an agreement reached with Seadrill for the provision of a sixth-generation drilling rig, consisting of "key commercial parameters", including the day rate.
It said it had also appointed a "leading" international contractor, Halliburton, as its integrated well services provider, with BakerHughes GE appointed to provide a range of well-related equipment.
The board confirmed a downward-revised estimate for the initial exploration well cost of between $25m (£19.79m) and $30m, or less than $50m for a concurrent two-well campaign if funding permitted.
A conditional agreement had been reached for a convertible loan investment of £10.25m, which was approximately half the anticipated cost of a single well, the board added.
Proposals had been received for other financing alternatives, with farm-out discussions continuing.
The board called an annual general meeting for 17 September, to approve the convertible note investment, a proposed expanded share issuance authority, a proposed cancellation of existing options to be replaced with the issue of revised new options, and the approval of the payment of deferred remuneration via the issue of new ordinary shares once the initial well was fully-funded.
"Following our licences being extended to the end of 2020 by the Government of the Bahamas earlier this year, rapid progress has been made across our business," said Bahamas Petroleum chief executive officer Simon Potter.
"Today we are pleased to update shareholders on a series of coordinated steps that the company has taken toward drilling of an initial exploration well during 2020, consistent with our licence obligations.
"This includes a framework agreement for a rig, appointments for essential well services with leading global oil services companies, as well as considerable progress on financial arrangements to fund the drilling, whether that be via a farm-in on acceptable terms, or by other means, whichever is in the best interests of the company."
The AIM-traded firm said it was on course to see the drilling of an initial exploration well in the first half of 2020, with an agreement reached with Seadrill for the provision of a sixth-generation drilling rig, consisting of "key commercial parameters", including the day rate.
It said it had also appointed a "leading" international contractor, Halliburton, as its integrated well services provider, with BakerHughes GE appointed to provide a range of well-related equipment.
The board confirmed a downward-revised estimate for the initial exploration well cost of between $25m (£19.79m) and $30m, or less than $50m for a concurrent two-well campaign if funding permitted.
A conditional agreement had been reached for a convertible loan investment of £10.25m, which was approximately half the anticipated cost of a single well, the board added.
Proposals had been received for other financing alternatives, with farm-out discussions continuing.
The board called an annual general meeting for 17 September, to approve the convertible note investment, a proposed expanded share issuance authority, a proposed cancellation of existing options to be replaced with the issue of revised new options, and the approval of the payment of deferred remuneration via the issue of new ordinary shares once the initial well was fully-funded.
"Following our licences being extended to the end of 2020 by the Government of the Bahamas earlier this year, rapid progress has been made across our business," said Bahamas Petroleum chief executive officer Simon Potter.
"Today we are pleased to update shareholders on a series of coordinated steps that the company has taken toward drilling of an initial exploration well during 2020, consistent with our licence obligations.
"This includes a framework agreement for a rig, appointments for essential well services with leading global oil services companies, as well as considerable progress on financial arrangements to fund the drilling, whether that be via a farm-in on acceptable terms, or by other means, whichever is in the best interests of the company."