Bahamas Petroleum Company (BPC) has received another £8 million zero-coupon, second ranking, unsecured convertible bond from a substantial Bahamian-based institutional family office investor, bringing the total invested to £16 million.
BPC announced the increased investment in a statement on its website yesterday, days after announcing that it would push back the date to begin drilling its first exploratory well in the southern Bahamas due to worries connected to the coronavirus (COVID-19).
At the end of last month, the company received the first tranche of the first investment sum of its convertible loan note facility, an initial drawdown of £2.7 million (US$3.5 million) of the £8 million (US$10.5 million) facility.
The cost of the exploratory well is between $25 to $30 million and the statement noted that the company has secured $45 million.
BPC’s Chief Executive Officer Simon Potter said in the statement that the cash will help the company to “manage our front-ended cash flow needs whilst providing us a high degree of financial flexibility, in order that we could respond to operational needs as they arise and react to real-time drilling outcomes to ensure a full and comprehensive evaluation of our prospects as we drill”.
BPC already considers itself fully funded to carry out the drilling of its first well, though it continues to search for a farm-in partner as an option.
The test well, scheduled for a location called Perseverance #1, could lead to an economy-changing discovery of two billion barrels of oil, the company stated earlier this month.
Potter added, “Materially increasing the size of the facility with the same investor on an immediate, unconditional basis is, in and of itself, a tremendous boost for the project.
“Moreover, for the company to achieve this in the face of the decline in oil prices and the global adverse impact of the COVID-19 virus is an enormous vote of confidence in the company, our planned drilling activity and the robust nature of our prospects. Notwithstanding current turmoil in the world’s financial markets and the disruption associated with the COVID-19 virus, including interruption to our drilling schedule, the project team remains together, focused and intent on delivery.”
The company will be drilling in waters in the southern Bahamas that are almost 1,700 feet deep, drilling its well to a depth of 15,800 feet.