Bahamas Petroleum Company (BPC) has received the first tranche of a convertible loan note facility, making an initial drawdown of £2.7 million (USD$3.5 million) of the £8 million (USD$10.5 million) facility.
The company is two months from its April goal of spudding its first exploratory oil well, called Perseverance #1, in the southern Bahamas.
“On 20 February 2020, the company (BPC) announced that it had entered into an
agreement for a zero-coupon, second ranking, unsecured £8 million ($10.5 million) convertible loan note facility, with a substantial Bahamian-based institutional family office investor,” BPC noted in a statement yesterday.
“Pursuant to that facility, the company made an initial drawdown of £2.7 million, which under the terms of the facility saw the company receive cash proceeds of £2.43 million. The company has now received a conversion notice in respect of £1.44 million of that initial drawdown and in accordance with the terms of the facility, the company will proceed to issue 48,000,000 new ordinary shares (the conversion shares) to the investor.
“Thereafter, a remaining amount of £1.26 million of convertible notes will remain on issue and which remain subject to conversion or redemption in accordance with their terms and conditions. At the company’s option and as more fully described in the company’s announcement of 20 February 2020, the company has the ability to draw additional amounts under the facility in April, May, June and July of 2020.”
BPC 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 April at the location called Perseverance #1, could lead to an economy-changing discovery of two billion barrels of oil, the company stated earlier this month. It added that the potential of the drilling site makes The Bahamas the premier prospecting site for 2020.
BPC Chief Executive Officer Simon Potter said in a statement earlier in February, that the company is in the “final stages” of readiness to spud its first well.
“Perseverance #1 has the potential to open a world-class, new frontier basin offshore, less than 200 miles from the world’s largest hydrocarbon market/infrastructure,” Potter said. “In our view, this makes Perseverance one of the premier prospects that could be drilled globally this year, with the potential to not only fundamentally alter the status of BPC in the market, but to also transform the revenue-generating capacity of the Bahamian economy.”
BPC originally targeted March as its start month for drilling this year, but the statement revealed that the company is still awaiting the approval of its environmental authorization document, the finalization of the procurement of drilling supplies and the receipt of the fund of a convertible loan note.
The company said it 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. The company has also set up field offices in Houston, Texas to supplement its Bahamas office.
The statement added that safety and environmental management systems have been put in place.