PetroTal Corp, Bahamas Petroleum
Excellent news from PetroTal this morning with word that the BN-2WD well (2WD) has successfully completed and converted the existing water disposal well into an oil producer. Now the BN 95-1 the well exceeded pre-drill estimates of 1,500-2,000 BOPD and came in with 2,700 BOPD. This means that at a cost of $2.3m it will pay out in less than 30 days, some economics…
Current production is one 5,500 BOPD and of course the BN 1XD is currently shut-in. With this success and continued work across the company the 10,000 BOPD by the year end is a very realistic figure. The company has now spudded the BN 95-4 well, a development well with a 60 day target and is an oil well aimed at a 500m horizontal completion.
This capital efficiency and rigorous attention to detail has singled PetroTal out as one of, if not the, most attractive in the region. Investors should see the extensive presentation on the website and get it on the radar screens sharpish.
I am travelling at the moment but will write more after speaking to the company.
Again in brief with more to come it seems that very patient shareholders here may at last be able to see the wood for the trees. Plans have changed somewhat in that with prices falling the outlay for a well in the region have come down to such a degree that with some canny upfront financing the company is confident that a well could be drilled 1H 2020.
With Seadrill tied up for the rig and Halliburton and Baker Hughes on board for the kit the company has clearly been able to impress three of the biggest names in the industry to commit to a well.
The idea is now that with a well costing ‘only’ $25-30m the company could potentially drill this on their own. With creative financing via a £10.25m convertible (happily half the well cost) BPC is on the move and now out looking for the rest.
Realistically the farm-out is still very much the preferred route and having the convertible in the background should mean that potential partners now really do have to **** or get off the pot, so to speak. Obviously further debt or even equity remains an option as the stakes are now increased.
It still has much to be done and things such as the Environmental permits have to be in place before drilling which take time but speaking to the company this morning I got the distinct impression that the Government were very much behind them. Equally Seadrill have a deadline of 11th October whereby BPC have to demonstrate that things really are happening on the money front.
Again more later but shareholders should be encouraged by the management really getting to grips with the situation at long last and my conversation this morning confirmed that.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.