Bahamas Petroleum Company (AIM:BPC) has arranged up to £15m of further funding to support plans in Trinidad and Suriname as well as its Perseverance-1 well in The Bahamas.
BPC said it has entered into agreements with a leading European alternative asset manager, under which it has the potential to access gross funding of £15 million ( or US$20 million).
Under the terms of the agreement, BPC will immediately receive gross proceeds of £7.5m ($10m) through the issue of 375,000,000 new ordinary shares at a price of 2.0p each.
BPC has also entered into an option agreement, whereby BPC has an option, at its sole discretion, to raise up to a further £3.75 million (US$5 million) from the Investor within 10 business days after the spud of the Perseverance #1 well on substantially the same terms.
If BPC so elects, the Investor has the option to double that amount, thereby providing BPC discretionary access to the full £15 million (US$20 million) ("Funding Option Agreement").
The group said the transaction is consistent with its funding strategy, and will enhance the Company's overall funding capacity, including for the anticipated costs of work in Trinidad and Tobago and Suriname planned for 2021, as well as ongoing costs and expenses associated with the Company's 100% owned and operated Perseverance #1 well in The Bahamas.
Simon Potter, Chief Executive of BPC said, "2021 will be a busy year for BPC in pursuing operations that have the potential to create considerable value for the Company.”
He said BPC has a “full slate of activity” planned in Trinidad and Tobago and Suriname, where it is proposing a drilling campaign of appraisal and production aimed at rapidly bringing wells directly into production and cash flow, building to 2,500 bopd production by the end of 2021.
He said the group will also be maturing prospects that will drive an active onshore exploration programme that is designed to deliver the next step-change in production beyond 2021.
In The Bahamas operations for the Perseverance #1 Well are expected to commence imminently while in Uruguay, it expects to commence early-stage evaluation of identified leads, with a view to maturing drillable prospects from our high potential offshore licence.
He added, “We are thus extremely pleased to have secured a further US$10 million of immediate equity funding, along with the option to expand that to US$15 million and potentially to receive a total US$20 million, from a leading European institutional investor.
Not only will this additional liquidity, consistent with our overall funding strategy, give us the flexibility to continue to pursue an aggressive growth agenda at a pace determined by the Company, but we consider this funding at this time to be a strong vote of confidence in BPC and the value embedded in the totality of our portfolio.”
Shares in Bahamas Petroleum Company have ticked up nearly 2% in the past three months to open 1.53% higher this morning at 2.65p following the announcement.
Multi-Asset Company
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.
Newsflow
The company is currently on-track for drilling an initial exploration well in The Bahamas, Perseverance #1, in late 2020 / early 2021, with the well targeting recoverable P50 prospective oil resources of 0.77 billion barrels, with an upside of 1.44 billion barrels.
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.”
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