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Proselenes, the naivety shows in your posting. Tenneco last drilled the Doubloon Saxon well. Enough evidence was shown, that follow up well activity and exploration was needed. Licences were allowed to expire in 1988 so as to avoid incurring a significant work obligation for 1989 of $250m, and due to the then prevailing low oil prices (<$20/bbl).
It was nothing to do with dropping the licences and walking away.

"Hydrocarbons were encountered at various horizons, indicated by elevated gas chromatography readings detected continually during drilling, generally increasing with depth and through the deeper Aptian reservoir column in particular. Oil was identified from high oil saturation values from logs in a number of reservoir sections thus verifying the existence of a working Lower Cretaceous petroleum system and reservoir quality sequences in the Aptian."

It would be naive of people to think that MM's do not prey on investors fears and emotions by flushing out weak holders on the back of disappointing news. Once MM's have made money from the volumes at the bottom and the sells disappear, they look for the next fear and emotion to play on, which sensibly would be a rising share price, knowing full well there are a lot of ex-holders watching . imo.

Jondogg19 - Reservoir Mechanics Jack Tarner

https://scholarship.law.umt.edu/mlr/vol17/iss1/1/

GarryGraham,
Sorry if you've lost money, but this is a school of hard knocks. It's bread and butter to some, and although losing money is not nice, especially if you have chosen to crystalise losses by selling potentially at the bottom, nobody knows what the future at BPC will be, and speculation and 'what if's' are needed in order to work out potentially what can happen and therefore help decide what one should do if they are thinking of selling or deciding to stay with the original investment for a bit longer to see what transpires. Obviously a lot of data has been gathered with the Perseverance well, and the details in the RNS still need evaluating. There is nothing worse than losing money big time in a stock, but this is the type of risk and reward at BPC. The only thing worse is selling out at the bottom without considering the fundamentals, and then having to watch the stock soar back up because something was overlooked. A double loss. imho.

Hi EggChaser.
Mr Potter said The Bahamians will know by April if they are an oil rich nation. This perplexing statement, along with the Lombard 'put' and 'call' extension of the option agreement reconciliation payment date pushed out to April 16th, makes me think that the full results of Perseverance will be verified in April. Even if a commercial discovery had been made, it would have still taken time (weeks) to verify the data from the well, which would need analysing and reviewing before confirming any commerciality . Cleary what was missing at Perseverance was volumetrics, even though oil was discovered, it did not have the volume needed by the time the 3900m depth was reached and, as intimated by Yonny, it was decided to pull stumps and conserve cash for the Trinidad programme, but enough data from the logs had been proven to get a farm-in deal done, potentially with a major. ie: you drill it, if there is oil, and it's proved it can be drilled, then we will farm-in and go for the volume drill in the next well (deeper). Pure speculation of course, but the events seem to fit the theory. We will just have to wait and see. I would laugh, if after all the evaluating and analysis, BPC say actually the well is commercial. The porosity is greater than first thought, the saturated reservoirs have a higher total organic compound and the pressure gradients indicate a greater volume of oil. Finding big oil has consequences, politically, and regionally, and with all the environmentalists kicking off every 5 minutes and court cases and early election rumours, timing of these announcements can be critical. Stranger things have happened.

Tiburn, Exactly. Perseverance has opened up a lot of possibilities for majors and independent oil companies to consider. When the full results are reported on it should make for very interesting reading.

Zebra04 - With respect, it is such naive comments that I find amazing.

@Pageofcups
Consider the environmentalists will argue although it was none commercial there was still some oil there. In which case the plugged well could potentially leak in the future. Therefore it's not worth drilling more wells. The last 6 in the Bahamas have come up none commercial.

I'm amazed some posters, but seems like those not invested and that have not much research which would explain such comments, are writing off the Bahamas and the Perseverance well results before they have been fully analysed and the data fully reviewed with the 3D seismic. Oil has been found just not commercial at this precise location. The licence area and the 3D are vast and from the real up to date data, it makes pinpointing future targets that more accurately. Monetising the asset through a farm-in is the next step. Remember, oil has been found in a working petroleum system in a new under explored basin. Majors would give their right arm to start off in that position in a new basin with the next drill. imo.

A good oil find at Saffron 2, targeting thicker reservoirs than Saffron 1, and the Sp will recover.

Saffron 2 will be drilled before any funding, imo

"Potter explained that the data will also either convince a company to join BPC in continued exploration in The Bahamas in a farm-in agreement, or choose to walk away from a deal."

High oil values on the logs and saturated reservoirs. Stronger HC indications in the Lower Aptian.
They know what they are looking at on the 3D now. Any major worth their salt will not walk away with the confirmation of oil, imo.

Thanks Yonny, I am thinking the same regarding a known major with intentions of agreeing to see what the first well yields and if there are hydrocarbons then they have something to negotiate around. Monetising the asset, says Mr Potter can now go and say look at this, if we can drill deeper into the Aptian and it will be commercial. We get through the anhydrite. Application for the next 3 year period for the licences need to be made before end of March. Granting of those licences are automatic provided a well has been drilled, which BPC now have. The question The Bahamas Government will have is how are you going to drill another well by the end of 2022? This is where Mr Potter will have to play the card of being able to say as a result of Perseverance, we have this oil major(s) who will farmin and drill the next well. That would be the logical plan, if there has been some pre-drilling agreement in principle on the basis Perseverance found oil, just not quite commercial, but good enough for a different location to be successful. Plenty more to come out from this once we know the full evaluated results. imo.

Hi Yonny, Yes battered and bruised but still standing.
What's your view on funding, farmout (BHP or another lined up?) and next likely news?

Hello Eggchaser,
I agree with all your points, but I don't know much about Leo Koot and the investment fund. For me, the big thing is the evaluation of the Perseverance well and the monetisation of this via a farmout. Has a deal in principle already been done based on the drilling of Perseverance and should oil be present in the well? How soon will any farmout materialise considering majors will know chapter and verse on the 3D, what extra encouragement is there that the Perseverance well provide, was drilling a concern for the majors which has now been proved possible, and how come Mr Potter is mentioning the monetising of Perseverance, why would he say that, knowing it will raise shareholders expectations. On it's own, the Trinidad assets and the Saffron well drilling can easily boost the sp, provided the route to funding is available without dilution at the current sp. Lombard's reconciliation payments will also need to be taken care of, although this could be delayed if there are any breaches by Lombard from it's selling and press statement about regretting funding the drilling in The Bahamas, however I'm not privy to the terms of the agreement and whether there were conditions regarding exemptions for BPC for shares sold below the 2p level. A lot now needs clarifying on the path forward and the strategy that must have been developed in the scenario that Perseverance was not commercial. I'm sure this has been considered and planned for, imo

Can't imagine they can satisfy conditions to use the CLN or further dilution. I would think the RBL is the most likely route to kick start things in T&T. With $3-5m left over from Perseverance and $5-7m from a $10m RBL, $10-12m can be enough to get Saffron 2 going and the other 2 identified look a like Saffron prospects. It would kick the sp back up over 2p, at which time the CLN conditions can probably be met with further funding available. By then, later in the year if a farmout materialises this will add to the pot and may negate the need for use of the CLN. imho

For me, with the up to date data from the Perseverance 1 well, with the oil found although not commercial, improves that this new data will give confidence to a major to farmin. Equity dilution of the asset is not so much of an issue now for BPC, particularly as they have T&T and Suriname and Uruguay. For that reason, a farmout at 90% dilution of the asset will realise 90% of the costs to date, and therefore monetise the Bahamas asset, as intimated in the recent RNS, which can then be deployed to fund the rest of the portfolio. In general, $100m in back costs is not that much for a major, considering the improved chances of finding commercial oil, with well costs still low and a rising oil price, the improved chances on a second drill for a major with the financial muscle, makes the Bahamas an attractive low cost entry with plenty of upside. imo

Our focus for continued resource and reserves growth now turns to the South West Peninsula of Trinidad, where in addition to appraisal of the Saffron discovery we have identified 9 other prospects of roughly equivalent size to Saffron. The Saffron #2 well, targeting a thicker downdip reservoir section, will mature the BPC technical understanding of the Saffron field, and further inform our development plans. We have already awarded a contract for initial 3D seismic reprocessing of the dataset that covers the SWP as a whole, which will underpin maturation and prioritisation of prospects for exploration drilling later in 2021. These activities, once completed, are expected to result in a material contribution to growth of our 2P reserves and 2C resources, with a CPR update targeted for Q2 2021 to incorporate the outcomes of these workstreams, and to inform ongoing work in pursuit of our production target of 2,500 bopd by the end of 2021."

· Reserve-based lending facilities: BPC has been approached by various financing providers requesting the Company to consider the suitability of an RBL facility against its 2P reserves. If successful up to $10 million could become available during 2021.

· "Drill for equity" type arrangements: Several options may be available to the Company similar to that adopted previously by Columbus in Trinidad and Tobago .

South West Peninsula (SWP), including Saffron



BPC holds an extensive portfolio of high-quality exploration assets in the South West Peninsula of Trinidad and Tobago. In Q1 2020, whilst these assets were under the ownership and control of Columbus, the Saffron #1 exploration well was drilled, to test for the presence of hydrocarbons in the Middle Cruse and Lower Cruse sands. At the time, Columbus' pre-drill resource estimate was in the order of up to 11 MMbbl. The work planned by BPC for Q1 2021, specifically the drilling of Saffron #2, will further seek to establish this potential by targeting a thicker, slightly down dip reservoir section. A similar capital cost for Saffron #2 is anticipated for the Saffron #1 well - whilst the cost estimate includes the additional cost of a production completion, an offsetting amount has been saved by the use of the same drill pad, thus generating material savings on preparation costs.

In addition to the Saffron prospect, during initial due diligence prior to the Columbus merger and in further work undertaken over the past 3 months since the Columbus merger completed, BPC's internal work has identified 9 other prospects across the SWP of approximately equivalent size to the Saffron prospect. So as to effectively prioritise these prospects and plan for exploration drilling activities, a body of work to reprocess 3D seismic data covering the SWP has recently been initiated. This work is expected to complete early in 2021. The Company expects that these activities (drilling of Saffron #2 and seismic reprocessing), once complete, will result in material additions to both the 2P reserves and 2C resources categories, consistent with the Company's resource maturation process and production growth and thus cash generation strategy.

· Exploration and appraisal of additional prospects : The Company has identified 9 leads and prospects in the South West Peninsula of Trinidad that could potentially be of equivalent size to the existing Saffron discovery. The Company has commissioned 3D seismic reprocessing to high grade and prioritise these prospects. Based on the results of this new work (expected in early 2021), the Company aims to identify at least two prospects for exploration drilling (and appraisal, subject to results) during 2021. The estimated capital cost for this exploration drilling is approximately US$3 million ($1.5 million per well - potential to add a production completion would add a further $0.5 million per well).

Hello Eggchaser,
I think mobilising the rig, plugging the well and demobilising the rig costs about $13.5m. Mobilising already paid for, so expect plugging and demobilising to cost about $7.5m, which would leave about $5m in cash from the $12.5m left. The aim was to leave about $5-15m after Perseverance, depending on how much funding was taken from LO and the CLN.
For T&T there is a RBL of $10m against 2p reserves, where BPC have been approached by various funding providers requesting suitability. There is also surplus cash-flows from operations , depending on oil price, and cash from any potential farmout options in the Bahamas, or a drill for equity type arrangement for Saffron. Not sure if any of these funding options will materialise but I'm sure they will have enough cash to drill Saffron 2. imho.

POC / Tiburn / StrarChild / in4..... anyone with a sensible balanced view.....

What money do we have left over to fund Saffron 2?

I assume stopping the drill and not going lower preserved some cash but the question remains with S2 likely to cost 2/3m - do we have it?