Bahamas Petroleum (BPC) shares rallied after it addressed speculation over how it plans to finance exploration drilling at its licences in the Bahamas.
The company confirmed on Thursday that it has “no immediate intentions of undertaking an equity placing to institutional investors”.
Shares in Bahamas Petroleum rallied 37% to 1.85p following the announcement
Bahamas Petroleum has plans for an exploration well in H1 2020 following the Bahamas government in February announcing it is extending the exploration period to the end of 2020.
So far it has secured drill rig, equipment and well servicing agreements with US oil service firms Seadrill Ltd, BakerHughes Co, and Halliburton Co.
Bahamas is targeting risked resources between 0.4 and 1.2 billion barrels of oil, with “a potential upside in the targeted structure that has been independently assessed at close to 4 billion barrels of oil”.
The company secured a £10.25m in a convertible loan note in September, however it still needs to bridge the gap to cover exploration drilling costs estimated to be between US$25 and US$30m.
The company said it has met with “a number of potential institutional investors” and that it is “confident” that it will find a suitable financing package.
Bahamas believes that the current share price of the Company “materially undervalues the project” and therefore does not believe an equity fundraise is in the “best interest of shareholders.''
It told investors it is considering “a range of funding options”, and said that active farm-in discussions are continuing.
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