Bahamas Petroleum awarded offshore licence in Uruguay 

Francesca Morgan
RNS Newswire
07:31, 9th June 2020

Bahamas Petroleum Company (AIM:BPC FOLLOW) said it has been awarded the AREA OFF-1 petroleum licence offshore Uruguay following efforts to expand its portfolio option.

The licence has a total area of around 15,000 km2, and is situated in water depths from 20 to 1,000 meters, around 100 kms off the Uruguayan coast.

The oil and gas exploration company said the licence contains a management estimated resource potential of up to 1 billion barrels of oil equivalent with significant running room.

The licence has an initial four-year exploration period, during which time BPC will reprocess around 2,000kms of legacy 2D seismic and undertake a number of new geotechnical studies.

Aside from the costs over the initial four-year period, which BPC expects to be around $200,000 per annum, there are no annual licence fee payments and no drilling obligation.

BPC said the licence compares to its previous “low-cost option” licences in the Bahamas which saw ‘a modest work commitment over four years that secures a sizable, technically high quality, frontier play, with regional seismic available and exciting exploration upside.’

Shares in Bahamas Petroleum Company were trading 12.28% higher at 3.20p on Tuesday. 

BPC price chart

The OFF-1 exploration play is similar in nature to the prolific Guyana - Suriname basin currently being successfully explored by multiple oil companies, as well as the Cretaceous turbidite plays that have been successfully explored offshore north-eastern South America.

BPC believes OFF-1 has the capacity to generate similar value uplift to its existing licences in The Bahamas, where its primary focus remains commencing drilling at Perseverance #1.

Perseverance #1 is expected to spud in late 2020 / early 2021, and is targeting recoverable P50 oil resources 0.77 billion barrels, with an upside of 1.44 billion barrels.

“We have been able to secure an exploration licence of an extremely high-calibre that, even as recently as a few months ago, we most likely would have been outbid on by much larger players,” said Simon Potter, Chief Executive Officer of Bahamas Petroleum Company.

Potter said the licence represents “a similarly underappreciated opportunity to that secured by the company in 2007 in The Bahamas.”

He added, “We are confident that over the next four years we can bring to bear our expertise, gained in The Bahamas over the past decade, on OFF-1 so as to more fully evaluate the licence's potential, in the hope that in the longer-term we can create an opportunity of equal value and industry interest to what we have thus far accomplished in The Bahamas."

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