BPC raises a further £3.75m as it advances Perseverance #1
(BPC ) has raised a further £3.75m by issuing 187.5 million new ordinary shares at a price of 2p to support the ongoing Perseverance #1 well programme.
The oil and gas company told investors that this brings the total funding since August 2019 to $52m, with current undrawn potential funding sources in-place for up to a further $20m.
If remaining potential funding sources are available and drawn in full, the company will complete its current funding strategy, initiated in August 2019, securing a total of $72m.
BPC said this represents ‘adequate funding’ to meet not just the costs of drilling the Perseverance #1 Well but also the costs of an extensive 2021 work program on a suite of production, appraisal and development assets in three other complementary jurisdictions, as well as all geological and geophysical costs across the business through to mid-2022.
Perseverance is targeting resources of between 0.77bn-1.44bn barrels of oil and the 2021 work programme is targeting exit production of c.2,500 bopd (2020 exit rate of 500 bopd).
Simon Potter, CEO of BPC said, “In August 2019, BPC embarked on a bold strategy to self-fund the drilling of Perseverance #1 in The Bahamas, as well as to seek to complement that high-impact exploration activity with production and thus cash generative assets.
We knew it would require capital to facilitate such a growth strategy, and, accordingly, we laid out a clear plan as to how we would secure that capital incrementally over time.”
He added, “Now, with drilling in The Bahamas well underway, and with a broad program of value-adding work about to kick off in Trinidad and Tobago and Suriname, we continue to draw on the various elements of the funding package we worked hard to put in place over the past 18 months.”
BPC believes that the delivery of this funding package, and thus the portfolio-wide work program it supports, represents “a considerable achievement in the context of depressed equity markets (particularly in the energy sector), oil price weakness, and the material cost, timing and operational challenges caused by both Covid-19 and the last-minute - but ultimately unsuccessful - legal challenge to BPC's drilling operations in The Bahamas."
Shares in Bahamas Petroleum Company have increased by over 40% in value since the beginning of April 2020 to open 1.22% lower this morning at 2.025p following the news.
Today’s £3.75m funding represents part of the company’s outlined funding strategy Before this funding plan, BPC's strategy for securing the funding for Perseverance #1 was via a farm-in.
While continuing to actively seek such a farm-in, the Company determined in 2019 to pursue an alternative funding strategy in parallel, being the ability to self-fund Perseverance #1 and operate the well at 100% equity instead of giving away a percentage of the company’s project.
In August 2019, BPC articulated a funding strategy that, in the absence of a farm-in, would see the Company nonetheless be in a position to proceed with Perseverance #1. This strategy was overwhelmingly approved at the AGM held in September 2019 and in July 2020.
Reasons to Follow BPC
BPC is becoming a multi-asset ‘full cycle’ oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located offshore in the waters of The Bahamas and Uruguay, and onshore in Trinidad and Tobago, and Suriname.
Successful Acquisitive Growth
As a result of its merger with Columbus, BPC has been granted access to high-impact exploration wells in The Bahamas, five producing fields, two appraisal / development projects Trinidad, and an expansive frontier exploration acreage offshore Uruguay and Suriname.
BPC believes the merger will allow both groups to provide something different from within that business cycle to the combined entity and that together the asset base is ‘more robust, has broader interests and is, as a consequence, more financeable and thus more valuable.’
“With the completion of the merger of BPC and Columbus, we today become a single company, in pursuit of a single-minded vision: the creation of a revenue generating, full-cycle, Atlantic margin exploration and production business,” said Potter in August.
He added, “Going forward, BPC is an exploration and production business, intent on generating reliable, growing production cash flows capable of supporting exploration activities, and which together will create significant value for all stakeholders.”
Positive Newsflow Expected in 2021
Perseverance #1 drilling is expected to take between 45-60 days to complete and is targeting recoverable P50 prospective oil resources of 0.77bn barrels, with an upside of 1.44bn barrels.
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