Bahamas Petroleum secures rig contract for Perseverance #1
Bahamas previously postponed drilling at Perseverance #1 from the first half of 2020 due to the Covid-19 pandemic and to avoid drilling during the peak of the island’s hurricane season.
The AIM-listed company has now entered a new drill contract with Stena Drilling, replacing its previous contract for a drilling rig that the company anticipated entering into with Seadrill.
The contract sets ‘a firm window’ of drilling operations between December 15 2020 and February 1 2021 consistent with licence obligations which were extended amid force majeure.
The group said that based on the terms of the drilling contract, the company has significantly reduced the cost estimate by about 15% for its first exploration well in The Bahamas.
Shares in Bahamas Petroleum Company were trading 14.39% higher at 1.55p on Tuesday.
Under the contract, Stena Drilling will provide a sixth-generation drilling rig and associated equipment and services, this morning’s statement detailed.
Perseverance #1 well is targeted at some 0.77 billion barrels of recoverable oil resources with an upside of 1.44bn barrels.
The group noted that, in a success case, with its reduced cost estimate the group will now be able to fund expanded evaluation works within the same cost footprint.
“This decision - to lock in a rig now, at an already favourable rig rate, rather than try and second guess what markets and availability will look like later in the year - speaks to our intent to ensure Perseverance #1 is drilled at the soonest opportunity, and provides the necessary certainty needed for operational planning,” said Simon Potter, CEO of Bahamas Petroleum.
He added that the rig contract “clears the way to revisit our funding strategy with adequate time to ensure we have the funds available as and when we need them, on the best possible terms.”
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