Funding....22 Sep 2020 15:57
Through to end H1 2022, BPC presently estimates that across the expanded portfolio there will be aggregate cash needs of approximately US$35 - US40 million (and in a success case up to approximately
$50m), with expenditure applied to exploration activity, production growth, and corporate overhead / G&G
• The cost of Perseverance #1, as previously announced, is estimated to be in the range of $21m - $25m, with up to $5m in contingencies identified – this is considered by BPC to be committed expenditure, and
will largely be incurred during Q1 2021. BPC has also previously advised that it has identified up to $5m in additional cost for Perseverance #1 in a well success case, for enhanced evaluation work. This, along
with the balance of capital needs across the portfolio (for activities in Trinidad and Tobago, Suriname, and Uruguay) are considered to be largely discretionary – that is, BPC is able to control the pace and level
of capital deployment, so as to match capital outflows to capital availability
• BPC has previously disclosed existing funding sources in place which as a ‘baseline’ are expected to be sufficient to meet these requirements (subject to availability / drawdown) – the immediate corporate
focus for BPC, consistent with BPC’s articulated funding strategy, is to seek to optimise these funding sources so as to achieve lower cost of capital / less aggregate dilution / greater certainty.
Whilst the cash may not be deposited in the bank - they company have made it clear that the funding strategy is in place and a varied field of funding is in place - as and when required. Not all money is required at once and the team will draw down on these funding avenues only when it is required.
From the last Annual report : -
Shareholders should be encouraged that we are in a strong position to resume drilling activities when possible. The Company has cash reserves and financial backers intent on flexibly supporting the Company once operations are able to resume, and appropriate cost control measures have been implemented consistent with the preservation of cash while we wait for the dust to settle.
As for the rig : -
On 26 May 2020, the Company announced that it had entered into a fully termed, binding and unconditional rig contract with Stena DrillMax Ice Limited for delivery of a sixth-generation drilling rig to location within a firm time slot between 15 December 2020 to 1 February 2021. The rig contract provides for significantly improved terms (notably, an all-in rig cost, including managed pressure drilling system, substantially lower than that previously anticipated) to the extent that on a like-for-like basis, the total cost of Perseverance #1 has been estimated to be up to $30 million in total, representing an approximate reduction of 15% to the previously advised well cost estimate.
The three vessels in Stena's fleet with MPD are Carron, Ice Max with the Drill Max being the latest and is currently at anchor in Gib
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