NASSAU, BAHAMAS — Challenger Energy, formerly the Bahamas Petroleum Company (BPC), said it is has “reinvigorated” the process to find a suitable farm-in partner for its next phase of oil exploration activity in the country.
Eytan Uliel, Challenger Energy’s CEO, noted: “As I have commented previously, it is often the case in our industry that several exploration wells are required before the potential of a frontier basin is unlocked. We had hoped for ‘instant gratification’ with Perseverance #1, which was not the case.
“However, notwithstanding the non-commercial results of that well, based on what we have learned, we continue to believe that the licenses in The Bahamas are highly prospective.
“As such, we advised the government of The Bahamas of our desire to renew the licenses into a third three-year exploration period, and are working through that process, which will likely take some time.
“Meanwhile, we are continuing with our evaluation of the exploration potential of the licenses, working to reduce technical uncertainties and continuing in our efforts to secure a farm-in partner for the future.”
The company, in a notice to its shareholders, noted it is now in talks with the Bahamian government to renew the licenses but acknowledged the process may take some time, “particularly given the administrative delays occasioned by the COVID-19 pandemic and the proximity to an election in The Bahamas”.
The company’s Perseverance #1 well represented the first exploratory drilling The Bahamas since the mid-1980s, and the first test of any prospect located in deeper waters off the shallower water carbonate banks. Drilling concluded in February of this year without incident and no discovery of commercial quantities of oil.
According to the company, the data from Perseverance #1 drilling “is broadly indicative of increased potential for oil in the underlying Jurassic interval, which was not penetrated by Perseverance #1”.
“In particular, the relatively cool well temperatures place the postulated Jurassic source rock, producing in nearby Cuba and the US Gulf of Mexico, in the oil window, thus oil generative,” the company noted.
The company further noted that based on the post-well technical analysis, it has “reinvigorated a process, working with Gneiss Energy, to identify a suitable farm-in partner for the next phase of activity in The Bahamas. This process is active, with a number of parties having expressed interest and engaging with the Company.”
Back in March, the company advised the government of its intent to renew the license.
“As part of any such renewal, a number of commercial matters must be discussed and agreed between the government and the company, including the scope of any future work program and license obligations,” the company noted.
“Additionally, under the terms of the company’s license, on renewal from a second to third exploration period, the company is required to relinquish 50 percent of the licensed area, for which the company has submitted a detailed relinquishment proposal to the government.”
The company added: “At present, the company is awaiting a response from the government, noting that the process of renewal of the company’s license from the first to the second exploration period, for example, ultimately took an extended period of time to complete.
“Thus, the current process may likewise take some time, particularly given the administrative delays occasioned by the COVID-19 pandemic and the proximity to an election in The Bahamas. Further updates will be provided as and when appropriate.”