NASSAU, BAHAMAS — Hopes of finding commercial quantities of oil in The Bahamas have been dashed with Bahamas Petroleum Company (BPC) announcing that it has abandoned its exploratory drilling after its well came up largely dry.
The company’s stock took a nearly 70 percent hit as a result of the long-awaited announcement. BPC has been working towards exploratory oil drilling in The Bahamas for several years, spanning successive administrations, and most recently faced off with local environmental groups over government approvals for its exploratory well which it began drilling on December 20.
According to the company, “the Perseverance #1 well in The Bahamas has encountered hydrocarbons, successfully validated the structural model and the petroleum system, and drilled a majority of the potential reservoirs of interest, thus fulfilling the core technical objectives of the well. Whilst the well encountered oil, indicated from LWD (Logging while drilling) tools, gas chromatography and mud logs, commercial volumes of oil have not been proven at this well location.”
The statement added: “Drilling has now ceased, the well having reached a depth of approximately 3,900 meters without incident, and the well will now be permanently plugged and abandoned. Over the coming weeks, BPC will undertake a detailed evaluation of all technical information gathered during drilling. In this context, BPC will review the appropriate way forward for future monetization of its business in The Bahamas, in particular with a view to the renewal of a farm-in process.”
In the near term, the company will now focus on its 2021 work program in Trinidad and Tobago as well as Suriname.
Simon Potter, CEO of BPC said: “I am proud to say that after many years of diligent effort we did what we said we would do: BPC drilled the Perseverance #1 well safely and without incident, testing for the presence of hydrocarbons in the Southern Seas of The Bahamas. This was the very specific objective of the well – not a scientific or geologic experiment, but to seek hydrocarbons in commercial quantities.”
“In a technical sense, the well successfully validated the existence of oil, seal, and reservoir. Together, these factors verify the existence of a working Lower Cretaceous petroleum system and sequences of reservoir quality within the Aptian, pointing to the overall hydrocarbon potential of other untested prospects captured by BPC’s extensive acreage holding,” he continued.
“However, at the Perseverance #1 location, the volumes of oil encountered are not commercial. Perseverance #1 is the first exploration well in The Bahamas for decades, and the data gathered from this well will prove invaluable in providing a modern analysis as to the regional potential of the petroleum system, which, in our view, reduces the technical risk for any future/further exploration in this new frontier province. The Company will proceed to undertake a comprehensive evaluation of the data derived from the well, as we believe the results provide a sound technical basis for renewed farm-in discussions.”
Potter said: “Personally, I have worked on the Bahamas project for over 15 years and, along with the Board members and a number of the management team, have spent the majority of the last 10 years working to bring about the drilling of Perseverance #1. We all take great professional pride in the fact that BPC has delivered the well safely, responsibly, and without incident, notwithstanding the challenges presented by Covid-19, low oil prices, and a challenging market environment.
“Great credit is due to the professionalism of our operating and commercial teams, to whom I owe a huge thanks. Elsewhere in the portfolio, in Trinidad we have producing oil fields and, in combination with assets in Suriname, we have upcoming drilling programmes scheduled in 2021, such that the near-term operational activity focus will now shift toward those activities.
“All of us at BPC are resolute in support of the diversification strategy embarked on during 2020, and we remain intent on delivering the potential that is latent across the entire portfolio,” Potter added.
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