Bahamas Petroleum Company (BPC) has been successful in raising the almost $25 million it needs to drill an exploratory oil well in the southern Bahamas in the first half of 2020, a statement from the company revealed yesterday.
The company added that the $11.4 million raised, in addition to the conditional convertible note approved by the company’s shareholders, will mean the company’s $24.6 million take-up is enough to enter into drilling contracts and agreements in earnest in order to sink its first well on its own, if a farm-in partner continues to be elusive before the drill-start target of March 2020.
BPC said the gross proceeds from its open share offer for existing shareholders raised $4.3 million, while the placing of remaining shares raised gross proceeds of $7.1 million.
The statement explains that these two share offers represented an oversubscription of 60 percent, versus the fundraising target.
“Sequenced cash inflows through 2019 and the first half of 2020 expected to be sufficient to meet the anticipated costs of an initial exploration well in The Bahamas during 2020, consistent with license obligations, with timing of cash inflows matched to funding requirements,” the BPC statement noted.
“Farm-in discussions remain active and the company continues to consider other financing alternatives, to strategically expand its available funding resources.”
BPC’s Chief Executive Officer Simon Potter expressed in the statement: “We have been working diligently to develop a coordinated funding strategy so as to ensure we have access to the funds necessary for drilling, as and when we need them.
“I am thus extremely pleased to advise all shareholders of our successful open offer and placing, which in aggregate have raised approximately US$11.4 million. When combined with the proceeds we expect to receive from our conditional convertible note, we will have secured the finance required for drilling activities, given our anticipated well cost is in the range of US$20 million to US$25 million.”
BPC revealed last month its intent to have a drill rig in Bahamian waters by March, in preparation to drill its first well in the search for oil in The Bahamas.
Potter said then, in a notice on the company’s website, that the company notified its deepwater drilling contractor, Seadrill, of its intention of receiving a rig in the first quarter of 2020.
He added that BPC is currently working with Seadrill on the long-form rig contract in preparation for drilling.
BPC has also secured the services of renowned oil field service company Halliburton to provide equipment, tools and a drilling plan.
The company hopes to have an exploratory well drilled before July and thinks the rock structures beneath The Bahamas have the potential for four billion barrels of oil.
The company is obligated under its licensing agreement with the government to drill an exploratory well in its licensed area in the southern Bahamas before the end of 2020.
If the company is forced to extend its licensing agreement, it would be required to relinquish 50 percent of the southern license area.