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SvS - historical wells targeted shallower depths - non commercial is what it is, but you dont allow for exploration being a campaign - Doubloon was encouraging but didnt find the trap - then they stopped drilling as oil price and licence extension costs of $250m issues.
Your statement:
"POC evidently the Bahamas has yet to be proven analogous to the Eastern Gulf of Mexico.
From my understanding it was thought to be its twin, which is why the Oil Major's drilled 5 Wells there to prove it was."
POC point is that the Jurassic target depth is analogous to GOM - the past wells didnt TD there so no extrapolation can be made as you maintain - they are different reservoirs/traps.
Nelly you are blowing my mind right now lol.
Rather than me quote my own words back to show you what I didn't say. I will leave you to re-read my posts. If you don't want to, that's ok.
All of the undiscovered numbers floating about sounds great. No company has managed to find it yet and according to the second article, the reason for that is because the oil that used to be there, has evaporated away.
If you want to class oil shows as a discovery, ok.
You don't have to accept that data if you don't want to. DYOR.
I have no issue with anyone voicing their opinions about anything, as long as they are presented as such.
I do have some issues when someone chooses to present their own set of 'facts' that differ wildly from an official CPR (COMPETENT Persons Report), even if it is a few years old.
"all that has been found is dead "evaporated oil" in every well drilled to date." is not a factual statement.
Thanks Nelly
The deepest historical drill at Doubloon TD was above Jurassic level - BPC new target - there is no past drill result for this Jurassic level and so no extrapolation can be made of shallower depth drills for BPC Jurassic focus - new target reservoirs beyond 7,500m depth, but in much shallower 500m seas instead of 3km as in GOM, its this lower cost attraction to Majors thats going to be key.
GOM well systems produce 175k bopd from the Jurassic level.
"By late 1986, Tenneco had decided to spud the Doubloon Saxon #1 well; the deepest test drilled in The Bahamas to date and located within the current day Donaldson licence area. The well was successfully drilled to 21,740 feet, T.D'ing in the early Cretaceous above the regional
Jurassic source rock intervals. The well encountered a number of live oil shows over a thick interval but did not report commercial quantities of hydrocarbons. Through
the Cretaceous, and especially below the Aptian level, sequences of carbonates, fractured dolomites and anhydrites were encountered in multiple potential, reservoir sequences. These units, with around 20 in number where log quality allowed evaluation, represented repeating units generally over 200' thick. The well was drilled using a shallower water jack-up rig.
Reexamination of the targeted structure has concluded Country Review Bahamas that whilst a successful drilling operation was conducted the well did not target a valid trap."
Hi Ava,
Your reports do show a history of oil shows but no commercial discoveries,
dating back to the 1950’s. Surely this would affect the CoS of any further drilling?
And on the last page:
"Overall, the well results indicate the presence of a active
petroleum systems, based on the presence, especially in
the pre-mid Cretaceous sections, of oil shows of varying
quality, abundant reservoirs and seals, indications of source
rocks, and hydrocarbon saturations from log interpretation.
Carbonates, the major component rocks of this region,
globally contain 60% of the world's oil but are not often
encountered by nor best understood by many of todays
major and independent oil companies.
According to the “Assessment of undiscovered conventional
oil and gas resources of South America and the Caribbean,
2012” report by the U.S. Geological Survey, the region hold
an estimated 126 billion barrels of oil and 679 trillion cubic
feet of undiscovered natural gas in 31 geologic provinces
of South America and the Caribbean. The Bahamas share
of this windfall could be as much as 4.3 billion barrels."
That sounds a very long way away from your statement:
"all that has been found is dead "evaporated oil" in every well drilled to date."
You don't need to be a petroleum engineer to work out your view is different to the one you are sourcing from.
Ok don't turn into Tyburn on me.
Where and when have I said " none of the historic Bahamas wells to date have encountered live oil shows"?
I think you should re-read both those articles with less haste and rather looking for something to prove me wrong. Just digest it. I didn't write it. I am also not asking you to believe anything in those articles.
page 3 of Keyfactsenergy Bahamas, where it says the following:
https://www.keyfactsenergy.com/media/country_review/Bahamas_AtvR44R.pdf
"From 1948 to 1955, the region experienced only limited
exploratory activity, though Gulf, in 1948 and 1950, did
attempt the first experimental underwater seismic and
gravity surveys. Regionally, the Gulf 826-Y well was
drilled west of Key West, Florida, notable as the well
flowed 18 barrels of 22-24API gravity crude oil from an
interval of anhydrite and carbonate (below 10,000ft)
similar to those anticipated within the Bahamas Petroleum
Company southern licences.
In 1956, Bahamas California Co. (Chevron) and Bahamas
Exploration Co. (Gulf) performed a detailed seismic and
engineering survey of the Cay Sal Bank area culminating
in the second exploration well conducted in The
Bahamas, the Cay Sal #1 (T.D. 18906 feet). The well
was a joint test by the two companies drilled in 1959
encountering "live oil shows" from 12682 feet to T.D., but
with no commercial quantities of hydrocarbons tested."
...you conclude that none of the historic Bahamas wells to date have encountered live oil shows? Hmm
Neither being a geologist or petroleum engineer I can't argue what that chromosome photography or gastro cinematography means. But its my understanding that just because there are oil shows, that doesn't mean commercial oil is present. All it does indicate is the existence of a W.P.S.
That in its self also does not indicate the presence of commercial quanities of oil. It just indicate that's the correct conditions for oil to be generated exist in said location.
Now if the oil was once in place but has since evaporated away, then in layman's terms, it is reasonsable to expect oil shows would remain/be present.
NellyB I posted this info before & presumed everyone chose to dismiss it.
There are 2 links below.. The first is the Keyfacts energy article, the second is a basin report conducted on the D
Doubloon Saxon well in BPC Dondson acreage in which BPC is renewing its licence for.
Oh crap I have just remembered the T's & C's of this BB about links.
Type these into a Google search:
• keyfactsenergy bahamas
• doubloon saxon well (its the 2nd result from the sciencedirect link)
I can - It was done after all of the previous drills and before P1.
There is no CPR that has been produced after P1, so what value does anything else add, for being done later?
Again, Please provide a link to what you are reading about historic Bahamas wells not having any live oil to date.
NellyB can you see the date stamp on that CPR?
SVS have you even read the Bahamas CPR?
https://www.bpcplc.com/bahamas_petroleum_company_plc_-_cpr_july_revision/
Take a look at page 9, where nearly all of the drills to date have live oil shows :o)
Please share a link to what you've been reading.
POC evidently the Bahamas has yet to be proven analogous to the Eastern Gulf of Mexico.
From my understanding it was thought to be its twin, which is why the Oil Major's drilled 5 Wells there to prove it was.
The Bahamas basin report states that the oil that was supposed to be there, has evaporated away and so far, all that has been found is dead "evaporated oil" in every well drilled to date.
The seismic data showed oil is likely to be present. So far the 6 drill results have showed that oil "used to be present".
P#1 found a W.P.S, a trap, a competent seal & good reservoir charge but only dead oil present. Ergo that oil had also evaporated away.
6 Wells results now support the Basin report. By the way this basin report was not done by me lol.
Evidently all the conditions are in place for the Bahamas basin to contain billions of barrels of oil. But Mother Nature opened a trap door in which that oil has leaked away.
If P#1 made a commercial discovery it would have proved that basin report wrong or at least inconsistent which in turn I am certain would have then made the Major's all want to return to the Bahamas for a piece of the pie.
I think BPC will have to go it alone again in its unwavering efforts to prove the basin report wrong. By that time, oil prices may have risen and Covid may have subsided which in turn may increase the cost of a drill ship from $35m to $70m.
Agree PG, and there's no question the license will continue a third term.
All the data is there ready to be taken for a farm-out.
Saffron #2 will be a game changer for the company in the coming months.
Majors are spending billion in the Eastern Gulf of Mexico to get at the Jurassic sub salt in deep water. Can do it for a fraction of the cost in The Bahamas basin. The basin is hot enough to generate vast amounts of oil. That's all a major needs to know. If they are willing to spend billions to get at it, then you can be sure they will see The Bahamas as a more cost effective option. It's all about the data. You need to be a petroleum engineer and geologist to understand the implications.
POC - I enjoy your posts but i suspect a prospective partner may wish to play a long game and perhaps bid, low ball, after 12months. Take Over Rules would allow that then and it would then be down to shareholders to accept or reject in the knowledge that going it alone could well be unacceptably dilutive and painful in time value.
PIC you have certainly just underlined the fundamental reason why I have no confidence in a Farm In/Out agreement being achievable.
It's called monetising the investment in the asset. The question GarryGraham could not understand was why wouldn't a major just buy out BPC at 1p or less rather than do a farm-in. If a major does a farm-in they will have to pay a percentage of the back costs of $150m, aswell as the percentage of further drilling. So lets on a 50/50 JV they would be expected to pay half the back costs $75m and half the future drill costs. Usually in a farm-in the first well is done on a free carry basis. Any major would be looking at 100-$150m expenditure minimum.
I have actually misread that. You di not suggest £108m company valuation. My mistake.
£108m for a company generating cash flow of £3m a year & making a loss of £-4.6m. Blimey, I wonder what Dragon's Den would make of your company valuation.
GarryGraham. If a major was to buy BPC they wouldn't be paying what the current sp is or anything like 1p. The valuation of the company is not what the market says it is. The market is undervaluing BPC. If a major was buying BPC for The Bahamas assets, presuming they wanted to drill as they believe oil is present, which Perseverance has confirmed, then the minimum a major would have to pay without even ascribing value to the oil in the ground, is the investment made by BPC to get to the stage of confirming oil. This is $150m. You then need to factor in the oil that is likely in the licence areas and also the T&T assets the Suriname assets and then the Uruguay licence. Clearly, the valuation any major would be obliged to pay is well north of the current £27m Mcap. Sunk costs in The Bahamas are £108m for a start. This doesn't come for free.
because they may not want to take the company on, much easier to do a jv do some drills find some thing and buy that part out that part of the company, not the whole shebang
Thanks for posting the link to Tribune article - I suspect Fred read my post 06/04/2021 for inspiration of his latest PR stance :-
‘ Much better for any suitor to wait in the wings for say 12 months, during which time BPC will be obligated to pay for new licenses and get a firmer political commitment from Bahamas Government to avoid further opportunistic legal action’ .
Why would a major simply not buy BPC out rather than do a farm in with them and share the profits as a JV would be a major expense to them with substantial risk? The value of BPC is very low it is only worth around £28m so if there was any interest and I think Fred Smith has probably seen that off in the Bahamaas I doubt a JV would ever be entered into. The company would be bought out in its entirety it does not make any financial sense to enter into a JV. BPC is potless we all know that and SP will be out with the begging bowl very shortly as we have no current Major revenue streams. How much would they offer. I think Simon Potter would probably snap their hands off at 1p a share. Time to smell the coffee and wake up everyone. When Leo Koot ran off a few weeks before the P1 results and Potter would not face the camera pre results the writing was well and truly on the wall for the Bahamas P1 and any future exploratory in that area. If CERP assets were worth anything Koot would have stayed on and developed it. He knew P1 was a duster and he also knew CERP was a lame duck. As shareholders, we are scratching around for anything just look at the share price, where is this major breakout we have been promised by certain posters on here? .The only thing that can save this company is the potential discovery in the Uruguay basin in my opinion and that could be 5 years from now. GG.