Bahamas Petroleum Co (BPC), the oil and gas exploration company with a significant prospective resource in licences in The Bahamas, has announced its final results for the year ended 31 December 2014.

…we believe we have access to what is potentially a multi-billion barrel petroleum resource…      ~ Simon Potter, BPC, CEO

Highlights

• The company remains singularly focused on commencing drilling activities for its first exploration well, with further technical de-risking of the project and preparation for the intended drilling campaign
• Fluid inclusion analysis completed on three historical wells drilled in The Bahamas that offset the company’s acreage, demonstrating the presence of an active petroleum system in vicinity of sizeable 3D defined structures targeted for drilling
• Substantially reduced the anticipated well cost for our first exploration well, targeting a total cost in the range of US$50 million – US$60 million, based on significant re-engineering and greatly reduced rig rates
• Positive regulatory progress made:
• A new Petroleum Act and a suite of associated regulations to guide and govern oil exploration in The Bahamas was placed before the Parliament of The Bahamas and is now at its second reading and debate phase.
• A Sovereign Wealth Act has been proposed to provide the legislative framework to ensure that the accrued wealth from any successful exploration outcome would be optimally invested, managed and conserved for the benefit of this and future generations of Bahamians.
• Strengthening of the board with the appointment of new chairman William Schrader and deputy chairman James Smith
• Continued detailed environmental preparation in support of a number of potential well locations and the required Environmental Management Plan
• Strict focus on cash continues with significant cost reductions undertaken:
• Board and executive management team agreed to defer 20 per cent of fixed salaries into performance based remuneration taking effect early in 4Q 2014
• Rationalization of company advisor costs
• Reduction of fixed expenses
• Cash on the balance sheet in excess of $10m at year end and operating loss down 10 per cent

Post period end:

• Agreed upon the terms of a Licence Renewal Addendum in relation to the company’s four southern licences
• Existing applications for new licences resubmitted consistent with strategic and technical focus
• Full effect of cost reductions to flow through to the bottom line

Simon Potter, chief executive officer of Bahamas Petroleum Co, says:
“At Bahamas Petroleum, we believe we have access to what is potentially a multi-billion barrel petroleum resource that is world-class in terms of its scale, economic potential, advantaged location, and operating environment. With this in mind, during 2014 we have continued to work towards our goal of responsibly and safely drilling an off-shore exploration well.”

“Whilst not at the pace we would have liked, we are nevertheless encouraged by the signing of the Licence Renewal Addendum, providing the necessary clarity on tenure, timing and work obligations that potential industry participants will typically require, and the commitment shown by the Government to petroleum exploration in the Bahamas by passage of the upgraded legislation. We look forward to the ratification in the near future of the Act and associated regulations to guide and govern oil exploration in The Bahamas.”

“We have focussed on cost effective operations, reducing our overheads over the last three years by 54 per cent, so as to maintain cash reserves whilst ensuring value accretive work continues to be undertaken including geo-chemistry and technical analysis which has significantly reduced the expected cost of our first exploration well.”

“Going forward into 2015 and beyond our primary task is clear: secure the funding for the cost of the exploration drilling, and to commence drilling. Our preference remains to secure a farm-in partner for the project. With the regulatory clarity, licence extensions, and further technical de-risking achieved during 2014 and early 2015, we are now in a position to progress this all-important task.”