Bahamas Petroleum Company (BPC) released its interim results for the six months ended June 30, 2019 on Friday, explaining that it continues to work with the government to complete its environmental authorization (EA) application submitted almost a year and a half ago.
The chief executive officer’s review section of the interim results explains that the EA is a prerequisite to the exploratory well BPC hopes to drill in the first half of next year.
“In terms of environmental work, in early 2019 the company was notified of the engagement of Black & Veatch to act for the government in reviewing our environmental authorization application, which was lodged in April 2018 and the issuance of which remains a prerequisite to commencing drilling under the new environmental regulations in The Bahamas,” the review states.
“Since then the company has been working collaboratively with the government and its advisers, with a view to finalizing the EA process ahead of the company’s intended drilling activity.”
Since the passage of Hurricane Dorian, however, local environmentalists have become increasingly concerned about the prospects of oil drilling, given the increased potential for dangerous storms in the future.
BPC Chief Executive Officer Simon Potter said in the report that the company plans to undertake “safe” drilling operations.
During its most recent annual general meeting, the company secured the support of its shareholders to move forward with raising the money to begin drilling in 2020. The company has been mandated in its terms with the government to drill a well before the end of 2020.
“With the benefit of key parameters having been established, namely an unambiguous obligation to drill a well in 2020 and an estimated well cost of between $20 million – $25 million, the company has been able to move forward with the all-important task of securing the funding necessary to support the intended drilling campaign,” Potter said in his review.
“To date, the company’s focus has been predominantly on securing funding via a farm-in agreement and farm-in discussions are continuing. Multiple parties are currently engaged in ongoing due diligence and commercial discussions and it remains the company’s preference to secure all or part of the required well funding through this structure.”
BPC’s interim results reveal that the company has decreased its “other expenses” by 12 percent “compared to the prior six-month period”, and had a 19 percent reduction in operating loss compared to the same review period last year.
Having secured agreements with Seadrill, Halliburton and BakerHughes GE on the drilling of the exploratory well, BPC revealed recently it will drill a well with or without a farm-in partner, though the farm-in route is the preferred method of funding the operation.
“The extension of our licenses in February 2019 has given us a renewed clarity of focus. We have an obligation to drill a well in 2020 and shareholder value will best be delivered by getting on with that task,” Potter said in his review.
“To this end we have taken steps to secure the rig, oilfield services and equipment we need with leading global suppliers.”