Company seeking to renew four out of five exploration licenses covering 4 million acres in Bahamian waters
NASSAU, BAHAMAS — Bahamas Petroleum Company (BPC) said yesterday that while its first exploration well did not result in the discovery of commercial quantities of oil in The Bahamas, it intends to exercise its right to renew four of its licenses, which will allow for another three-year period for oil exploration.
The company said yesterday that following the completion of the Perseverance #1 well and “the promising technical results”, it has had a number of discussions with industry counter-parties in relation to a potential farm-out of their remaining Bahamas licenses.
BPC holds five exploration licenses, covering approximately four million acres. Four of the licenses, referred to as the southern licenses, are located in the southern territorial waters where Perseverance #1 was drilled; and a fifth, the Miami license, is in northern territorial waters.
In early February, BPC reported that drilling had ceased on the Perseverance #1 well, with the well permanently plugged and abandoned after commercial quantities of oil were not found.
“The newly acquired technical data will facilitate valuable updates and refinements to the process of exploration and subsequent production of oil in the region,” BPC said.
“As a result, the company is working to formalize and launch an entirely new farm-out process. The farm-out will seek to introduce a funding and operating partner for the next stage of exploration activity in The Bahamas.
“The company is in the final stages of integrating the well information with its historical data set and expects to commence the farm-out process upon completing this work in the coming days.”
The company added: “Although the Perseverance #1 well did not result in a commercial discovery, the company is encouraged by the presence of hydrocarbons — it is one single exploration well on a structure more than double the size of New Providence and in licenses that cover three million acres.
“Data derived from Perseverance #1 provides an opportunity for a modern-day recalibration of existing mapping across the whole license area.
“Importantly, the technical results from the drilling campaign support the view that other structures and deeper exploration plays, in particular those rocks of Jurassic age, continue to provide significant prospectivity with multiple viable drillable prospects of scale which merit additional study and exploration activity across the entire extent company’s license areas.”
BPC further noted that it intends to exercise its right to renew the four southern licenses into a third exploration period at the end of the current second exploration period at the end of June 2021.
“The third exploration period is scheduled to last for three years, will allow exploration for this resource to continue and carries an obligation to drill a further exploration well (at no financial cost to the government), failing which the licenses would be forfeited,” the company noted.
BPC had secured approximately $50 million of funding since early 2019, which enabled the company to drill the Perseverance #1 well in spite of delays and disruption caused by the COVID-19 pandemic, a collapse in oil prices and an ultimately unsuccessful last-minute legal action by environmental activists to halt drilling.