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ooops...I meant PI's post yesterday evening!
IK's post yesterday evening was an excellent summary. I'd like to add a few points relating to the potential of a joint venture, or part disposal, as opposed to the often used term 'farm-out' or 'farm-in'.
1. According to https://www.bpcplc.com/our-operations/licences/ last FAQ link point 14............................'The specific terms of the licence are confidential, but in the event of extraction of oil, the Act determines that the Company is to pay royalties at the rate detailed in the Act but increased to between 15% and 25% based upon the level of production. This effectively means the Government is an ‘equity’ holder in the licence.....'
2. BPC royalties to Bahamian Government is between 12.5% for 75,000 barrels per day to a peak of 25% for 350,000 barrels per day or more.
3. BPC pay no corporation tax in the IOM or the Bahamas. They are even exempt from most import duty relating to oil exploration. Most super majors and majors pay a hefty sum in government royalties and corporation tax before ANY net profit is distributed to shareholders in dividends.
3. The above gives BPC an advantage and leeway to de-risk exploration costs by selling a percentage of its acreage with shareholders benefiting in 3 ways (a) no further share dilution, (b) no debt (c) and more importantly, when oil is found and eventually extracted a cash cow in future dividends (and / or the acquisition of BPC at a premium).
4. Despite Covid-19 and PoO uncertainty, last month ExxonMobil purchased a 50% stake in Petronas Suriname's prospects in Suriname waters, for an undisclosed sum, without a drop of oil being found yet.
Key takeaway: We all know there are various ways oil exploration can be funded, one being the generic terms 'farm-in/out or joint venture'. However the point I'm emphasising is due to the zero tax and maximum 25% royalties payable, a 25-75% 'disposal' could fund several wells yet leave BPC shareholders (including the BPC board who hold many share options) very happy when oil is found. And regardless, all shareholders could receive a one off special dividend from such a transaction.
I have full confidence in the BoD's negotiating skills based on the various funding tools at their disposal, including the above. As such, I believe it is 'almost' a certainty at least 1 spud will take place.