TIDMBPC
RNS Number : 7017X
Bahamas Petroleum Company PLC
06 May 2021
6 May 2021
Bahamas Petroleum Company plc
("BPC" or the "Company")
Saffron-2 - Rig Mobilisation and Operational Readiness
Update
BPC, the Caribbean and Atlantic margin focused oil and gas
company, with production, appraisal, development and onshore and
offshore exploration assets across the region, is pleased to
provide the following update on the upcoming drilling of the
Saffron #2 well in Trinidad and Tobago.
Highlights
-- Rig mobilisation to the field will commence on 9th May 2021,
targeting commencement of Saffron-2 drilling on or around 23 May
2021
-- All equipment (including various re-usable items from
Perseverance-1) have been mobilised to Trinidad, along with
necessary contractor personnel
-- Design of the Saffron-2 well includes a production
completion, allowing for immediate oil production and sales on a
successful well, with anticipated rates of 200 - 300 bopd, which it
is estimated would provide more than US$1.8 million per annum of
cashflow to the Company. Based on these pre-drill estimates,
Saffron-2 would have a payback of 12-18 months and an ROI of in in
excess of 200 per cent.
-- Following a successful Saffron-2 well, a further five to nine
production wells are currently planned to be drilled in H2 2021 as
part of an overall field development of up to 30 wells
-- These further five to nine wells are projected to deliver
average daily production of up to 1,000 - 1,500 bopd, which it is
estimated would provide US$8 million - $12 million of annual
cashflows going forward (based on a US$60 / bbl oil price)
Saffron #2 - Operational Readiness
A number of workstreams have already been completed to enable
drilling of the Saffron-2 well to progress. This includes:
-- Ministry approval to drill
-- Completion of a detailed well plan
-- Civil works completed to establish the well pad
-- Purchase of all long-lead / major equipment items
-- Contracts entered into for all required well services and
supplies, including with Schlumberger for cementing, wireline
logging and drilling mud, with Weatherford for the liner hanger
system, and with NOV for the drilling fluid handling system
-- Installation of the well conductor
-- Detailed HSE planning, including Covid-19 mitigation and response protocols
The Company can confirm that mobilisation of the drilling rig to
the field is scheduled to commence on 9 May 2021, with rig-up
activities to be completed on or around 17 May 2021. The rig - Well
Service Rig #4 - is being supplier by Well Services Petroleum
Company Ltd ("WSPC"), one of the oldest and largest onshore
drilling companies in Trinidad. The rig was selected and contracted
based on the experience of WSPC, and in particular their superior
ability to handle drilling fluids. BPC has paid the initial
mobilisation fee to WSPC, with no further fees payable until and
unless the Saffron-2 well is spud. Spud is expected to occur on or
around 23 May 2021, subject to successful completion of the current
open offer and placing process, and subject to passage of the
various resolutions that have been proposed at the Extraordinary
General Meeting to be held on 17 May 2021 .
Saffron # 2 - Well Potential
The intention is to place the Saffron-2 appraisal well onto
immediate production, with ready proximity to oil sales
infrastructure, and expected production is in the range of 200 -
300 bopd. Based on a US$60/bbl oil price, this would generate
cashflows to BPC of US$1.8 million - US$ 2.6 million per annum,
with a full well payback of 12-18 months and a ROI of in excess of
200 per cent.
Saffron - Full-field Potential
Contingent on Saffron-2 well success, an initial program of
field development has been planned (the "Initial Program") which
could see a further five to nine production wells drilled during H2
2021 (subject to permitting, rig availability and capital
availability of $7 million to $12 million with the rest anticipated
to be available from operational cashflow), with field development
drilling continuing thereafter, through 2022 and 2023.
The Initial Program is projected to achieve an average daily
production of 1,000 - 1,500 bopd by the end of 2021 which, based on
a US$60/bbl oil price would generate annual cashflows to BPC of
US$8 million - US$12 million.
Thereafter, field development drilling would continue through
2022 and 2023. The current estimated overall field development
would comprise up to 30 wells in total, with a peak production
projection of approximately 4,000 bopd. The current full Saffron
field development scenario would generate annual incremental cash
flows for the Company in excess of US$25 million.
Eytan Uliel, CEO Designate of BPC, commented:
"I am pleased to advise that rig mobilisation has been confirmed
for the drilling of the Saffron-2 well, all major contractors and
suppliers are in place, and we are operationally ready such that
drilling activity can commence around 23 May 2021."
"A successful Saffron-2 well will be a profitable well in and of
itself, but more importantly will further our understanding of the
Saffron field and enable us to plan for additional field evaluation
and appraisal work, as well as to assess the optimal full-field
development plan. In a success case, this well can be quickly
brought into production, potentially adding 200-300 bopd of oil
sales and $1.8 million or more of annual cashflow. A full-field
Saffron development could see peak production of 4,000 bopd and
around $25 million of annual cashflow - a material project by any
measure, and one we are thus eager to get after."
Regulatory Statements
In accordance with the AIM Note for Mining and Oil & Gas
Companies, BPC discloses that Mr Nathan Rayner, the Company's
Operations Director, is the qualified person who has reviewed the
technical information contained in this announcement. He is a
qualified Petroleum Engineer, a member of the Society of Petroleum
Engineers, and a member of the Institution of Engineers, Australia.
He has over 20 years' experience in the oil and gas industry.
Nathan Rayner consents to the inclusion of the information in the
form and context in which it appears.
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information, please contact:
Bahamas Petroleum Company plc Tel: +44 (0) 1624
Eytan Uliel, Chief Executive Officer 647 882
Designate
Strand Hanson Limited - Nomad Tel: +44 (0) 20 7409
Rory Murphy / James Spinney / R ob Patrick 3494
Shore Capital Stockbrokers Limited - Tel: +44 (0) 207 408
J oint Broker 4090
Jerry Keen / Toby Gibbs
Investec Bank Plc - J oint Broker Tel: +4 4 (0) 207
Chris Sim / Rahul Sharma 597 5970
Gneiss Energy - Financial Adviser Tel: +44 (0) 20 3983
Jon Fitzpatrick / Paul Weidman / Doug 9263
Rycroft
CAMARCO Tel: +44 (0) 020 3757
Billy Clegg / James Crothers / Hugo Liddy 4980
Notes to Editors
BPC is a Caribbean and Atlantic margin focused oil and gas
company, with a range of exploration, appraisal, development and
production assets and licences, located onshore in Trinidad and
Tobago, and Suriname, and offshore in the waters of The Bahamas and
Uruguay. In Trinidad and Tobago, BPC has five (5) producing fields,
two (2) appraisal / development projects and a prospective
exploration portfolio in the South West Peninsula. In Suriname, BPC
has on onshore appraisal / development project. BPC's exploration
licence in each of Uruguay and The Bahamas are highly prospective
and offer high-impact value exposure within the overall portfolio
value.
BPC is listed on the AIM market of the London Stock Exchange. www.bpcplc.com
ENDS
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