Bahamas Petroleum Company (BPC ) said it exited 2020 with all initial key operational objectives having been met and that it remains on track to deliver its goals across the group’s portfolio in 2021.
The Caribbean and Atlantic margin focused oil and gas firm confirmed to investors that it had successfully reached its production target of 500 barrels of oil per day (‘bopd’) by end of 2020 and said it is aiming to execute an end 2021 target of 2,500 bopd across its portfolio.
“Pleasingly, notwithstanding the obvious constraints of operating across all of our asset base during a global pandemic, we managed to increase production in Trinidad and Tobago to our targeted 500 bopd level by the end of 2020,” said Simon Potter, CEO of BPC.
He said, “The next challenge will be to sustain that production and grow it further so as to achieve our 2,500 bopd production target by the end of 2021. Delivering our goals will require timely execution of our 2021 drilling program in both Trinidad and Tobago and Suriname.”
The group said it is on track to deliver extensive 2021 drilling campaigns; commencing with Saffron #2 in Trinidad and Tobago, and Weg Naar Zee extended well test in Suriname.
Ongoing activities in Trinidad and Tobago and Suriname, once completed, are expected to result in a material contribution to growth of 2P reserves and 2C resources, with a CPR update targeted for Q2 2021.
As future capital is deployed it would typically be expected that the existing 2C resource base would migrate into the 2P reserves category, upon demonstration of commercial viability.
BPC remains focused on its “primary goal” - the Perseverance #1 exploration well, targeting recoverable P50 prospective oil resources of 0.77 billion barrels and with an upside of 1.44 billion barrels, which commenced activity last month in The Bahamas, with drilling ongoing.
Current drilling operations, which have been underway since 20 December 2020, have the well on track to provide results within the 45 - 60 days period BPC has ‘consistently advised.’
In respect of BPC’s broadened portfolio business as a result of its completed merger with Columbus Energy Resources back in August 2020, BPC has set itself a target to deliver by the end of 2021 - a revenue run-rate of >$35m and an operating cash flow run-rate of >$15m.
These targets are based upon achieving, or exceeding, a production target of 2,500 bopd by the end of 2021, with an extraction cost of <$20 per barrel (and assuming current oil prices).
During 2020, BPC set out a number of clear operational objectives, the achievement of which it said will underpin delivery of both its strategy and its financial goals, and on which the Company is now pleased to provide an "end of year 2020" report, which you can read here.
Shares in Bahamas Petroleum Company have increased by 64% since the beginning of April 2020. Whilst the Group remains focussed on the successful drilling of Perseverance #1, the target production increase from 500 bopd to 2,500 bopd across the Group by the end of 2021 should provide significant positive newsflow to support an increasing shareprice going forward.
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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