Bahamas Petroleum Company PLC (LON:BPC) has updated on cost estimates and funding arrangements for its well operations in The Bahamas.
The AIM-listed oil and gas firm said that to provide appropriate financial headroom, a previously announced conditional convertible note facility has been increased by GBP4.75mln to GBP15mln in total, with an initial subscription notice issued for GBP3mln and the balance of the facility to be provided in a timeframe consistent with the demands of operations.
READ: Bahamas Petroleum says Perseverance-1 is on track to spud in 2020
Meanwhile, BPC said that due to the sustained impact of coronavirus (COVID-19), it has decided to implement enhanced mitigation measures which mean the cost estimate for the Perseverance-1 well has been revised upwards by around 15% to between US$24mln-US$28mln, while the contingency element has been expanded to US$7mln from US$5mln.
“We are aiming to assess what hydrocarbon resource potential lies within the territorial waters of The Bahamas, for the mutual benefit of the nation and people of The Bahamas, the shareholders of BPC, and all other stakeholders”, Bahamas Petroleum chief executive Simon Potter said in a statement.
“Safe, responsible, and uninterrupted operation is our key objective in the ever-changing global Covid-19 environment, and these additional costs and increased funding arrangements reflect a prudent approach to achieving this objective”, he added.
“We agree that the steps being taken are entirely appropriate and responsible and, notwithstanding the cost associated with this, we continue to believe that this is an extremely exciting time for BPC, which has successfully maintained a flexible range of funding options and adequate financial capacity”, analysts at house broker Shore Capital said in a note on Friday.
“The company is targeting very significant and potentially basin-opening upside with its forthcoming Perseverance-1 well, on acreage which has already been substantially de-risked and delineated over many years, and with the support of a technically-advanced drill ship and world class oilfield service providers”, they added.
The company’s shares were 6.5% lower at 2.9p in mid-morning trading.
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