Bahamas Petroleum Company (BPC) today announced an all-share acquisition of Trinidad-based Columbus Energy, worth £25 million, that will create a “Caribbean and Atlantic margin-focused oil and gas champion”.
In March BPC discovered a high-impact well in The Bahamas, and just last month it announced receiving a licence to explore waters offshore Uruguay.
With the merger, shareholders from both companies will now have a stake in five producing fields, two appraisal and development projects in Trinidad, a high-impact exploration at the Perseverance well in The Bahamas, and expansive oil exploration acreage offshore Uruguay and Suriname, according to BPC CEO Simon Potter.
He noted, further, that with just one investment in the region, BPC faced the risk of termination of exploration in Bahamian waters. To this end, he said, the company sought to add an already producing entity to generate income and earn cash to cover its exploratory expenses.
“In one bold step we have given ourselves a production base in Trinidad from which to generate cash and the opportunity to leverage a range of lowcost developments via workovers, reactivations and new wells, targeting shallow reservoirs, along with a range of further options for organic growth and exploration prospects,” the CEO explained
“We are now a full-cycle exploration and production company now with a focus on the Caribbean and Atlantic margin,” he told Proactive Investors Andrew Scott in an interview.
However, while Potter admitted that oil and gas production at the new company will be modest, and that Columbus shareholders will be assuming exploratory risk in The Bahamas, he also contended that “exploration upside is also there”.
In addition, he pointed out that the new company will be exploring opportunities over the next two years in order to increase shareholder value. Potter, therefore, invited Columbus stockholders to share in BPC’s optimism regarding Perseverance well’s success.
In the meantime, as a result of the merger, Executive Chairman of Columbus Energy Leo Koot will join BPC’s board as a non-executive director.
“Following a period of intense due diligence and negotiation, we are delighted and pleased to have received the firm intention from Bahamas Petroleum Company to merge our two companies. The merger is ideal in terms of asset overlap and will create a combined company that is stronger than the sum of its two parts,” he remarked.