NASSAU, BAHAMAS — Bahamas Petroleum Company (BPC) said yesterday it has secured a funding agreement for up to US$20 million, with its chief executive predicting that 2021 will be a “busy year” for the company.
The company informed investors that it has entered into an agreement with a leading European alternative asset manager, under which it has the potential to access gross funding of £15 million (US$20 million).
The company revealed that under the terms of a funding agreement, it will immediately receive gross proceeds of £7.5 million (US$10 million) through the issue of 375,000,000 new ordinary shares. The company also revealed it has entered into an option agreement, whereby it has an option, at its sole discretion, to raise up to a further £3.75 million (US$5 million) from the investor within 10 business days after the spud of the Perseverance #1 well on substantially the same terms. If BPC elects to do so, the investor has the option to double that amount, thereby providing BPC discretionary access to the full £15 million (US$20 million).
The company noted that the transaction is consistent with BPC’s funding strategy, and will enhance its overall funding capacity, including for the anticipated costs of work in Trinidad and Tobago and Suriname planned for 2021, and ongoing costs and expenses associated with the company’s 100 percent owned and operated Perseverance #1 well in The Bahamas
BPC CEO Simon Potter said: “2021 will be a busy year for BPC in pursuing operations that have the potential to create considerable value for the company. We have a full slate of activity planned in Trinidad and Tobago and Suriname, where we are proposing an active drilling campaign of appraisal and production aimed at rapidly bringing wells directly into production and thus cash flow, building to 2,500 bopd (barrels of oil per day) production by the end of 2021.
“We will also be maturing prospects that will drive an active onshore exploration programme that is designed to deliver the next step-change in production beyond 2021. In The Bahamas, we have the transformational Perseverance #1 well, for which operations are expected to commence imminently. And in Uruguay, we expect to commence early-stage evaluation of already identified leads, with a view to maturing drillable prospects from our high-potential offshore license.”
He added: “We are thus extremely pleased to have secured a further US$10 million of immediate equity funding, along with the option to expand that to US$15 million and potentially to receive a total US$20 million, from a leading European institutional investor. Not only will this additional liquidity, consistent with our overall funding strategy, give us the flexibility to continue to pursue an aggressive growth agenda at a pace determined by the company, but we consider this funding at this time to be a strong vote of confidence in BPC and the value embedded in the totality of our portfolio. I look forward to providing updates of our continued progress to shareholders.”
Although BPC has planned to commence drilling “imminently”, a consortium of environmental organizations and activists have filed for a judicial review of decisions by the government in granting environmental approvals and license renewals to BPC. They claim the evidence suggests those decisions were procedurally unfair, unlawful and an abuse of power by the government. Opposition to the oil exploration and drilling has attracted international support, with Hollywood A-listers like Leonardo DiCaprio among those opposing the move.