RE: THOUGHTS20 Sep 2020 23:50
Unconditional agreement with Stena Drilling for the provision of a state of the art, sixth generation drilling rig, including integrated supply of a Managed Pressure Drilling (MPD) unit.
· Firm window for commencement of drilling between 15 December 2020 and 1 February 2021, consistent with licence obligations as extended by the Covid-19 force majeure event.
· Reduced estimated total cost of Perseverance #1, down by approximately 15%, based on the contracted rig rate and rates for other contracted services and equipment, reflecting changes to the global operating environment.
· Perseverance #1 well targeting recoverable P50 oil resources 0.77 billion barrels, with an upside of 1.44 billion barrels. Reduced cost estimate creates scope for expanded formation evaluation work in the success case, without increasing previous estimated total capital requirement.
· Optimal funding strategy and timing, including farm-out process, being reassessed accordingly.
Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said:
"In March 2020, we were within weeks of commencing the drilling of our Perseverance #1 well when we were compelled to defer our planned drilling programme due to the impacts of the Covid-19 pandemic. Immediately we undertook a range of activities necessary to reschedule activity toward the end of 2020 and into the first quarter of 2021, consistent with our licence obligations (as extended for the declared force majeure event), by which time we expect the worst of the broad suite of impacts of the pandemic to be behind us. To this end we are pleased to announce that we have today entered into a rig contract with Stena Drilling, which provides a firm series of parameters on rig rate, provision of MPD, mobilisation and demobilisation costs, and defines a revised drilling window of 15 December 2020 to 1 February 2021.
This decision - to lock in a rig now, at an already favourable rig rate, rather than try and second guess what markets and availability will look like later in the year - speaks to our intent to ensure Perseverance #1 is drilled at the soonest opportunity, and provides the necessary certainty needed for operational planning. Acting decisively in this way is consistent with our single-minded focus on technical delivery. Importantly, the commercial parameters in the rig contract have allowed us to not only revise down significantly the anticipated well cost, but also clears the way to revisit our funding strategy with adequate time to ensure we have the funds available as and when we need them, on the best possible terms. I look forward to updating shareholders in the coming months as we continue making progress towards recommencing operations."
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