Bahamas Petroleum Company
Monday, March 21, 2016
Monday, March 21, 2016
Bahamas Petroleum Company, the oil and gas exploration company with a significant prospective resource in licences in The Commonwealth of The Bahamas, is pleased to announce its final results for the year ended 31 December 2015.
- The Company’s singular focus remains to commence responsible and safe drilling operations as soon as possible, with further de-risking of the project taking place during the Year:
- Four southern licences renewed for a further three years to mid-2018 with a requirement to commence an exploration well by April 2017
- Technical and engineering works completed, reducing the anticipated cost of the initial exploration well, targeting a total cost of $50 – $60 million
- Detailed preparation of the required Environmental Management Plan (‘EMP’) and community engagement programme continued during the Period
- Positive regulatory progress made:
- Passing of the Petroleum Bill, associated Regulations and the Sovereign Wealth Fund Bill in Bahamian House of Assembly
- Strict focus on cash expenditure with continued initiatives implemented to reduce costs
- Total operating cash outflows decreased by 8% and employee / personnel costs reduced by 10% year on year in 2015
- The Company’s total annual overheads reduced by over 50% since 2011
- Existing applications for new licences resubmitted consistent with strategic and technical focus
- Ongoing engagement with local communities that have an interest in the project
- Farm-out discussions continue with parties for a strategic and funding partner
- Total cash on the balance sheet of $5.6m at year end
Post Period end:
- The Bahamian Senate passes the Petroleum Bill and the Sovereign Wealth Fund Bill, subsequently signed by the Governor General to become known as the Petroleum Act 2014 and Sovereign Wealth Act 2014
- Board decision to defer 50% of its fees to be paid in shares contingent on a farm out agreement, and the CEO and certain other executives of the Company to defer 90% of their salaries to be paid contingent on a farm out agreement and funding of the first exploration well
Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said:
‘We maintain the strong belief that our project represents a large scale, multi-billion barrel economically robust project that has now been technically de-risked to the point where we consider it drill-ready. Significantly, we now have clarity in a commercial and regulatory sense with the extended tenure of the core southern licences and the Bahamian Government’s commitment to our industry through the passing of the new Petroleum Act and Sovereign Wealth Act, collectively providing the level of certainty needed to attract high quality industry players.
The Board and Management continue to seek ways to deliver meaningful cost savings for the Company, and are more than ever personally committed to the success of the Company having agreed to take further fee reductions. Commitment to the project is such that I, along with key fellow executives will be deferring 90% of our salaries to be paid contingent on a farm out agreement. This further ensures we are working towards the same goal and are totally aligned with our shareholders.
The Company remains singularly focussed on commencing drilling activities by April 2017 and, in the lead-up to that, the all-important task of securing a farm-in partner. We continue to manage a flow of qualified parties through the data room and look forward to updating shareholders on a successful farm out transaction.’