Thursday, November 7, 2019
By NEIL HARTNELL
Tribune Business Editor
A Bahamas-based oil explorer yesterday said it now has "all the tools we need" to drill an exploratory well within the 2020 year-end target set by the government, its top executive said yesterday.
Simon Potter, the Bahamas Petroleum Company's (BPC) chief executive, told Tribune Business he was "very confident we can deliver" after the company raised sufficient investor financing to almost totally cover the $25m high-end cost for the well.
Revealing that the oil rig would only be on site for 60 days during the 2020 first half, Mr Potter said BPC had not stopped its search for a joint venture or farm-in partner given that it would ultimately need to drill more wells to determine "the size and scale" of any discovery should the first prove successful.
That would require additional capital, but Mr Potter added that the exploration outfit was "already in negotiations about long-lead items" that it will require for its first exploratory well such as air/sea transportation logistics for provisioning the rig and removing waste.
"We're confident we can deliver that now," the BPC chief said of the first well. "We have all the tools we need to be able to deliver it. Today we have the technical services, the rig, the people and the funding so I am very confident we can deliver."
BPC's latest $11.4m capital raise, combined with previous financing already put in place, has given the company access to $24.6m in incoming cash flows as it ramps up efforts to fulfill its licence obligations to the Bahamian government.
"We have ensured we have the funding as and when we need it," Mr Potter added. "If the rig comes in the first half of 2020, that's when we'll have the funding. Our intent is to drill the well in the first half of 2020, which is well before the year-end.
"We have obviously funded all the technical bricks, and have taken the environmental permitting forward in a measured and responsible way. It's been a bit up and down, but the way forward is more straightforward now in the sense we have all the tools and are getting on with the professional work we are trained and qualified to do."
Mr Potter added that BPC's latest financing raise meant it can "honour our obligations to the Government" whether it secures a joint venture partner or not, which remains its preferred option.
"We want to be as financially robust as possible," he explained. "It will ultimately take more than one well to prove the size and scale of this resource. Once we establish the presence of hydrocarbons in these structures we will then move to further delineate the extent of the prospect.
"This will be a 60-day well. This will not be a producer, it will not be a permanent installation. It will be a 60-rig on-site. The location will be 80-90 miles from any landfall in The Bahamas. The closest landfall is Cuba, about 25 to 35 miles away. It's a temporary location, and remote.
"We're already in negotiations about long lead items, looking at how we provision the rig, the extent to which we fly people in and where boats will come from to restock, bring in food and take waste off. There's a lot of stuff going on."