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The idea of setting up a Sovereign Wealth Fund was so The Bahamas could benefit from oil revenues. The timing of this announcement, by the prime minister, while BPC is drilling an oil well is interesting. I can only assume they expect the need for a Sovereign Wealth Fund as they believe they will be generating enough money for the benefit of the Bahamian people.

First catalyst is to find the oil in significant volume. Irrespective of how long anything takes, with a multibillion barrel discovery, it's likely to sell to a major oil company.

They are using the most advanced LWD and MPT tools as they drill, so they will see a suite of data in real time as the drill bit goes through the formations and targets. The tools will detect hydrocarbons in all it's phases, so they will know what's down there while the drill bit is turning. They will also be looking at the drilling mud and taking samples for hydrocarbons.

The BOD have inside information on the well and act accordingly. The well is a tight hole and info cannot be divulged to Lombard, however the option agreement was included for a success case without providing inside info.

The reconciliation payment scenario is different now that the date has been extended by BPC to April 16th. This is advantageous to BPC as it allows Lombard to hold shares for the well result and then decide what it wants to do. ie: Well result successful Lombard can sell at 4,5,6,...10,12,15p etc. The premise is that the option to the put was exercised for extensive evaluation work on the well due to hydrocarbons being discovered.

They can't announce results until the well has been evaluated.

Mr Linton, you could be right about updating the market. BPC presenting 28th January. Be very difficult to keep a straight face. https://www.proactiveinvestors.co.uk/register/event_details/314

Possibly US markets looking at BPC on today's news. A new Gulf of Mexico on their doorstep will attract attention. Maybe BPC will have to get a listing on the US stock exchange, eventually. Open themselves up to a surge of money and it would make the US less hostile to oil in the Bahamas. Kill two birds with one stone.

Bespoke, Captain Ahab would agree. We wait for the cry of 'there she blows'.

Bespoke, Captain Ahab would agree. We wait for the cry of 'there she blows'.

An excellent RNS well written and explains the funding in detail. Whoever wrote that RNS deserves credit. Now that the option has been exercised by BPC the message is clear that they need the funds for extensive evaluation of the Fold B structure. This evaluation will demonstrate the value of Fold B hugely, compared to the funds needed. I believe there's a monster down there in The Bahamas, and it's not Moby Dick, but a different type of whale, a black whale.

Heli flying from Miami to rig now.

If we imagine an upturned boat with water inside the hull and an air space above, then this is what Fold B is. The water is the oil and the air space above are the light hydrocarbons that have risen to the surface. Where there is an escape of these light hydrocarbons through the seabed, these show up as gas chimneys and vents, which are visible on the seismic. The important point to note is that these light hydrocarbons are being forced out by a driving pressure. This pressure is assumed to be the structure filling from below and driven by the deeper source rock.

The well is about confirming the 3D. The 3D is tied into the well result. Confirmation of the 3D by Perseverance is what will determine volumes and recovery and a development plan for the structure. The nature of the 4 way dip closure and the fold allows this.

The porosity and permeability will determine the flow characteristics. This does not require an appraisal well. Wireline logging can determine fluid gradient, porosity and permeability amongst a whole range of other data, to determine commerciality. Fold B has been chosen specifically for the fracture system and propensity to flow oil into the well bore. Perseverance is all about volume and how many barrels the structure contains whilst confirming the high permeable fracture system and high porosity. This will determine the flow rate into the well bore and the recovery factor.

Buy volume has been increasing recently, is all you need to know.

Nervous bears here. Either short, or fomo in the case of a strike. It's a good sign.

Proselenes, The oil is valued at market price out of the ground. ie, once produced, at $40, or $50, $60 a abrrle, whatever the oil price is. The point of assigning a value in the ground is to determine an undeveloped valuation. Out of the ground valuations are much higher. This offsets any development costs. A P50 700MMb find will produce a revenue of $28B over the life of production. Such revenue makes a capital investment of $2B immaterial to a major. To get a valuation unproduced, in the in ground for the sale of any oil discovery then the industry value for The Bahamas is $3.5 in the ground undeveloped. If Perseverance exceeds estimates, such as the mooted 2B barrels throughout Fold B, then the in ground valuation goes up. Hope this helps.

Any valuation will be based on the well prognosis confirming the high resolution 3D and validating the charge of the Fold B. If the structure has multiple horizons and is filled to spill then volumetrics are assigned a standard industry in the ground value determined by the quality and type of oil, cost of extraction and near term market sales and infrastructure. Typical in the ground values range from $3-$9, dependent on access to market and cost of extraction and oil type. For The Bahamas, robust economics for a relatively small field of 200m barrels has a breakeven cost of $30-35 per barrel. A 700MMb find at $40 per barrel has a NPV10 valuation of $2.5B. This equates to a value of $3.5 per barrel in the ground. With 5B shares in issue this is 50 cents a share, or 36p per share.

Just look at the seismic and read the independent review in the appendix of this presentation.
https://www.yumpu.com/en/document/read/53404064/aim-bpc-the-bahamas