BPC plc Spuds Perseverance #1 Well Off The Bahamas

(Energy Analytics Institute, 21.Dec.2020) — Bahamas Petroleum Company plc (BPC) announced commencement of the drilling operations at the Perseverance #1 well offshore The Bahamas.

Highlights:

— Drilling of the Perseverance #1 well has commenced.

— The well spud on 20 December 2020, at 06.30 EST. The well is anticipated to take 45-60 days to complete

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

“We are very pleased to announce that the drilling of Perseverance #1 has commenced – the well has been spud. 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,” said BPC Chief Executive Officer Simon Potter in an official company statement.

“The well will be drilled to the highest environmental and safety standards over the next 45-60 days. Our Shareholders have been extremely patient, but we are now within a couple of months of understanding the scale of potential resource uplift that might be accessed within the licences: a potential uplift that is the traditional domain of the ‘oil majors’,” said Potter.

In The Bahamas, BPC holds 100% of five exploration licences covering approximately 16,000 km2 (4 million acres). Four of the licences are in the southern territorial waters of The Bahamas, together referred to as the “Southern Licences” (Bain, Cooper, Donaldson, Eneas), and a fifth, the Miami licence, in the northern territorial waters of The Bahamas. T

he main licences of interest and focus for BPC are the Southern Licences. All licences were awarded for an initial exploration period of three years, with up to three further exploration periods possible. The Southern Licences are commercially co-joined, meaning that the fulfilment of work obligations on any one of the Southern Licences will satisfy the work obligation in respect of all the Southern Licences.

Source: BPC

The Southern Licences are currently in their second exploration term, during which BPC is obliged to commence activity on an initial exploration well (Perseverance #1), with equipment capable of drilling to a depth of at least 18,000 ft. Currently, given extensions arising from interruptions due to the Covid-19 epidemic, the second exploration period will expire no earlier than mid-April 2021, although the company expects further extension given the ongoing nature of the state of emergency. BPC is focusing its efforts to drill the initial exploration well: Perseverance #1, within the Southern Licences in a safe and responsible manner, within the timeframe that is consistent with its obligations under the licences.

“More than a decade ago BPC secured several offshore hydrocarbon licenses in the far-southern waters of The Bahamas. Convinced of the compelling prospectivity of those licenses, the company has spent close to $120mn 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,” said Potter.

The Bahamas Summary Information

AssetSouthern Licenses (Bain, Cooper, Eneas, Donald)*
LocationOffshore, Southern Territorial Waters, The Bahamas
Ownership100%
OperatorBPC
StageExploration drilling
Asset TypeLicense
Tenure2nd Exploration Period to end 2020 + Force Majeure extension due to
Covid-19
Resource EstimatePerseverance #1 targeting P50 0.77 bn bbl; upside of 1.44 bn bbl; success de-risks structure with > 2 bn bbl recoverable potential. Aggregate STOIIP across licences of up to 28 bn bbls (unrisked)
Fiscal RegimeRoyalty; no corporate tax or CGT. 30-year production right
Source: BPC

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By Ian Silverman. © Energy Analytics Institute (EAI). All Rights Reserved.