Bahamas Petroleum Company has agreed to extend the deadlines attached for its £10.25 million note offering, as the oil explorer continues to advance towards the start of drilling for its Perseverance-1 well.
Certain variations have been made to the original arrangement including an allowance, which will now enable the company to scale back the number of notes in issue. Investors will still be able to subscribe for notes until April 15, with a further extension possible to May 15.
In addition, Bahamas Petroleum reports that efforts continue for a farm-out or similar transaction is still being pursued.
“We continue to make steady progress toward drilling of the company’s 100 per cent owned and operated Perseverance-1 well, targeting recoverable prospective resources of 0.7 – 1.4bn barrels of oil,” said Bahamas Petroleum Chief Executive Officer, Simon Potter.
According to Potter, “As we prepare for drilling we are taking every opportunity to optimise a large number of moving parts – both financial and operational – and as part of this process we have successfully ‘reset’ the timeline for our convertible notes while we work on finalising remaining conditions, at the same time seeking to only draw funds when they are actually required, with a view to reducing the overall cost of our comprehensive funding package.
“We have also been able to introduce a degree of optionality into those arrangements as we continue to pursue potentially more attractive options – for example, a farm-in – which would mean we could correspondingly scale back the convertible notes, consistent with our funding strategy to minimise costs and dilutionary impact.”
Procedural milestones to drilling
The company today noted a number of procedural conditions to the completion of the loan note offering are still being put in place. Firstly, the formal placement of an insurance policy for the drilling operations, and, entering into the definitive contract for drilling is currently being done.
Also, the rubber-stamping of contracts to cover well services (the final forms of which have already been agreed) and final agreements over with the Bahamas authorities over the remaining licence fees are being put in place.
Subscribers of notes were additionally issued options to buy other new shares, up to a total of 25 million shares priced at two pence. The company has stated so far some 3.25 million share options have been exercised.
Bahamas Petroleum Company plc is an oil and gas exploration company with 100 per cent owned offshore licences exclusively focused on the Commonwealth of The Bahamas. The company could be worth nearly double its current price, as it counts down to its maiden exploration well.
That’s the view of house broker, Shore Capital, “Whilst a farm-out deal remains firmly on the agenda, offering the potential to act as a powerful share price catalyst in due course, BPC is now pressing on towards drilling of “Perseverance-1” on a 100 per cent owned and operated basis,” Shore Capital said.
The house broker added, “With critical components of the well financing package already in place and assuming that a US$13.3 million conditional convertible note is finalised as expected, Perseverance-1 is essentially funded, allowing BPC to focus on its drilling plans.