Bahamas Petroleum (BPC ) has raised £9.5 million ($12 million) before expenses through a firm placing of 475,000,000 new ordinary shares of 0.002p each at a placing price of 2.0p.
The Placing was completed by a number of Institutional investors.
Use of Proceeds
Placing proceeds will fund the anticipated costs of the Company's 100% owned and operated Perseverance #1 well, expected to spud prior to the end of 2020, targeting a recoverable P50 prospective resource of 0.77 billion barrels of oil.
Simon Potter, Chief Executive Officer, commented: “Since mid-2019 we have been diligently implementing a funding strategy designed to ensure we have access to the funds we need, as and when we need them, such that we can efficiently discharge our licence obligation and the technical objectives for the Perseverance #1 well.
Fully Funded
The Company stated it is ‘continually seeking to simplify the capital structure of the business’ whilst pursuing funding alternatives that represent a lower cost of capital / less aggregate dilution / greater certainty than facilities currently in place.
Based on the anticipated cost of Perseverance #1, of between $21 million and $25 million, with an allowance for up to a further $5 million in contingencies, the new funds announced today in addition to the Company's existing cash balance with funds available from the existing Conditional Convertible Notes, the Company does not expect to have to draw further on the previously announced £16 million zero-coupon, second ranking convertible bond facility.
Shares in BPC are currently trading at 2.15p, comfortably above the placing price.
Today's placing is another milestone in the implementation of that funding strategy. The placing proceeds, being certain, immediately available and at a known dilution compared to other existing funding options, give us the opportunity to simplify the capital structure of the business whilst leaving us in a much stronger overall financial position. With the success of the placing we are also able to materially reduce the need to rely on other previously announced financing instruments, without affecting our overall ability to proceed with Perseverance #1 or other aspects of our recently enlarged business”. Added Simon.