Bahamas Petroleum Provides Company and Farm-out Update

Bahamas Petroleum Company, the oil and gas exploration company with significant prospective resources in licences in The Commonwealth of The Bahamas provides the following update in relation to its business and ongoing farm-out process:

In mid-July 2017, the Company completed the raising of US$3.5 million (£2.8 million) before expenses through a firm and conditional placing of 280,000,000 new ordinary shares of 0.002p each at a price of 1 pence each (the "Placing"). The purpose of the Placing was to ensure the Company had sufficient funds available as it pursues a farm-in, or other financing, to enable drilling of an exploration well on the Company's southern licences in The Bahamas.

Since completion of the capital raising, the Company has actively continued its efforts to secure a farm-in or other financing. Progress has been made, despite the European summer holidays in August and the considerable disruptions to regional business activity caused by Hurricanes Harvey (which largely affected Houston) and Irma (affecting most of the Caribbean). During this time, the Company has:

  • entered into four new Non-Disclosure & Confidentiality Agreements ("NDA's") with qualified prospective farm-in and financing partners;
  • executed or proposed two NDA's to allow new and extended data sharing across the region to further add to the already extensive BPC database;
  • provided information to, and hosted or scheduled due diligence visits from, five new prospective farm-in and financing partners, and anticipates several additional visits in the coming weeks and months as more normal business activities resume in the region;
  • maintained ongoing contact with several prospective farm-in / financing partners that had already undertaken technical due diligence during the time of the capital raising. The Company hopes to progress one or more of these parties to the next stage of the process (non-binding term sheets) in the coming months;
  • engaged external technical experts to conduct an overall independent audit of BPC's own assessment of the total petroleum system and targeted drill prospects utilising the full range of BPC's exhaustive database. This external technical evaluation will integrate global analogues from Mexico and the Middle East to validate the Company's estimated recoverable volumes, both risked and unrisked, as well as the geological chance of success;
  • expanded ongoing dialogue with certain industry intermediaries, including specialist investment banks, so as to broaden the universe of potential farm-in and financing partners; and
  • As a result of a landslide win in The Bahamas general election of May 2017, a new government took  office; since that time, the Company has been proactively meeting with representatives of the new administration to ensure renewed appreciation for the Company's activities and the significant potential economic and social benefits the Company's project offers to The Bahamas. To-date, the Company has met with a number of new Ministers and Government officials, and will continue this programme of active engagement with Government.
  • the Board and executive continue to forego fees and salary in lieu of Company stock, under the previously reported terms, until funding to execute the well obligation has been secured.

Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said:
"Securing a partnership and the funding necessary to enable drilling to commence remains the Company's number one priority. We are actively pursuing all avenues for the funding of the well, and intend to provide regular updates as to our activities in this regard to the extent permitted by commercial and confidentiality considerations. The board and I strongly believe in the Company's resources and are fully committed to delivering the initial exploration well as a first step towards unlocking the potential for oil and gas exploration in The Bahamas."

BAHAMAS PETROLEUM at a glance

The Bahamas Petroleum Company was formed to invest in an offshore oil exploration programme in licence areas covering approximately 16,000 sq km (4 million acres) in the territorial waters and maritime Exclusive Economic Zone (EEZ) of The Bahamas. The Group holds 100% interests through wholly owned subsidiaries in five Exploration Licences granted by the Government of the Commonwealth of The Bahamas, and has applications for an additional 5 licences.

Over the past sixty years sporadic exploration has been conducted in The Bahamas. However, there has been very little drilling activity, with no drilling in the last 25 years, and, until Bahamas Petroleum Company's involvement much of the seismic acquisition activity also occurred more than 25 years ago. Five deep petroleum exploration wells have been drilled onshore or in the Bahamian shallow waters between 1947 and 1986. Two wells were drilled in Bahamas Petroleum Company's current licence areas -Great Isaac #1 & Doubloon Saxon #1.

In spite of the previous activity there was little or no oil and gas data readily available in The Bahamas when the Bahamas Petroleum Company project was initiated in 2005. By conducting a three year international search and the purchase of materials from oil companies, universities and research institutions, the Bahamas Petroleum Company team has acquired extensive material which includes well cores and rock samples going back to 1958 and a large amount of seismic data of various qualities.

In 2010 and 2011 the Company acquired modern 2D and 3D data over the southern licences. These data confirmed the presence of several large structures and provided the basis for the Ryder-Scott Competent Persons Report (CPR) released in July 2011.

Licence Extension
In June 2015 the Government of The Bahamas renewed the Company's four southern licences, for a second three year exploration term. The Company's principal work obligation under the renewal was to commence activity on an initial exploration well by April 2017.

The Government of The Bahamas has extended the time for the performance of the obligations and requirements of BPC under its Licence Renewals for a further period of 12 months, as applies to its four co-joined southern licences. The impact of the above is that the Company will now not be obliged to commence activity on an initial exploration well until April 2018.

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