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Bahamas Petroleum awarded Uruguay offshore licence

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Oilfield Technology,

Bahamas Petroleum Co. has been awarded the AREA OFF-1 petroleum licence offshore Uruguay.

OFF-1 contains a management estimated resource potential of up to 1 billion boe, based on current mapping from multiple exploration plays and leads in relatively shallow waters with significant running room.

The OFF-1 licence play system is directly analogous to the prolific Cretaceous turbidite discoveries currently being evaluated/developed offshore Guyana and Suriname. The licence has an initial 4-year exploration period, during which time BPC will reprocess approximately 2000 km of legacy 2D seismic and undertake a number of new geotechnical studies. The company expects that the cost of the work programme in the initial period will consist of approximately US$200 000 per annum in historic seismic data acquisition and reprocessing, G&G studies and other technical work to be largely supported by the company's existing technical staff base currently supporting operations in The Bahamas. Apart from the costs of completion of the minimum work program there are no annual licence fee payments, and no drilling is required in the initial four-year period, with extension into a second exploration period entirely at BPC's election.

The company believes that OFF-1 has the capacity to generate similar value uplift to the company's existing licences in The Bahamas, where the primary focus remains commencement of exploration drilling on Perseverance #1, expected to spud in late 2020/early 2021, and targeting recoverable P50 oil resources 0.77 billion bbl, with an upside of 1.44 billion bbl.

Simon Potter, CEO, said: "The scale of the opportunity that our planned drilling campaign in The Bahamas may unlock for us, at the end of 2020, means that our personnel are and will remain entirely focussed on their efforts to deliver the Perseverance #1 exploration well successfully.

However, the current period of introspection in our industry is presenting nimble, forward-thinking companies such as ourselves with compelling opportunities to expand our portfolio and achieve countercyclical growth. The recently-closed Open Licencing round in Uruguay presented exactly such an opportunity for us where, for very low cost, 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.

We are especially pleased to have been awarded OFF-1 given that the licence represents a similarly underappreciated opportunity to that secured by the company in 2007 in The Bahamas - a licence in a region with extensive existing seismic of various vintages, but largely underexplored, and requiring the application of more modern, state of the art seismic imaging technology and techniques to understand the full extent of the petroleum resource.

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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