NASSAU, BAHAMAS—Challenger Energy Group, formerly known as The Bahamas Petroleum Company (BPC), is continuing its efforts secure the renewal of its licenses for a third three-year exploration period.
It notes that it is engaged in ongoing discussions with the Government regarding the renewal terms.
Eytan Uliel, Chief Executive of Challenger Energy, remarked in the company’s 2023 annual report and financial statement: “In relation to the Company’s licenses in The Bahamas, throughout the course of 2023 we continued to pursue a renewal of the licenses into a third exploration period. In parallel, we continued to explore various alternative strategies seeking to monetize those assets. The process has been frustratingly slow, but we expect to make better progress in the coming 12 months.”
The report noted that on February 21st, 2019, the company received notification from the Bahamian Government extending the term of its four southern licenses to December 31, 2020, with a stipulation to commence an exploration well before the term’s end. Due to the global COVID-19 pandemic, in November 2020, the license term was further extended to June 30, 2021, with the declaration of force majeure by the company under its licenses. Subsequently, on December 20, 2020, the company began drilling the Perseverance 1 well in the Bahamas, fulfilling its license obligation, completed on February 7, 2021. The well was permanently plugged and abandoned after commercial quantities of oil were not found.
Currently, the company has no committed work obligations in The Bahamas. In March 2021, the company informed the Bahamian Government of its intent to renew the four southern offshore exploration licenses for another three years, having fulfilled obligations under the prior license term. Negotiations with the Government continue regarding the terms of these renewals, and upon completion, the company will be obligated to commence further exploration before the new three-year term expires.
The report also noted that under its Bahamian exploration licenses, the company must pay annual rentals in advance to the Government for the licensed areas. On February 27, 2020, following the Environmental Authorization for the Perseverance-1 well, the company and the Government of The Bahamas initiated discussions seeking a final agreement on the amount of license fees payable for the remainder of the second exploration period (including the extension due to force majeure). However, substantive progress on this matter with the Bahamian Government has been lacking to date.
“The outstanding amount, which the Group considers to be small, is expected to be resolved as part of the broader discussions regarding the license area renewals,” the report noted.
