BPC updates offshore the Bahamas farm-out talks

Offshore staff

DOUGLAS, UKBahamas Petroleum Co. (BPC) has issued a progress report on its programs for its four licenses south of the Bahamas.

These have been covered extensively by 2D and 3D seismic, and carry a commitment to drill one exploration well in April 2017.

The company says this year’s passage of the Bahamian Petroleum Act and implementation of the associated petroleum regulations, in anticipation of future exploration activities, has added impetus to its farm-out discussions with various parties.

It remains confident of concluding a partnership agreement within the required timeframes.

Another positive development has been the continued drop in drilling costs as more rigs are warm or cold stacked. Global rig rates are now around one-quarter of the original estimates received by BPC in 2012. 

In addition, the company has undertaken further work to de-risk various technical aspects of the prospects, largely in response to assessments by various external parties during the ongoing discussions.

A recently published analysis by Wood Mackenzie reinforced that view, as it identified the anticipated BPC well as one of the top 10 “Drilling and Future Wells by Prospect Size” (as measured by estimated pre-drill volumes - MMboe).

The increased stability of the oil price of late has also started to have an impact in the capital markets, as evidenced by various successful farm-outs and fundraisings. 

However, exploration capital remains constrained, particularly for opportunities perceived as “frontier” exploration. Companies appear to be prioritizing frontier plays that not only have considerable scale, but are also demonstrably executable, BPC says, in terms of modest water depths, being compatible with existing technology, close to infrastructure, and in established regimes.

And the ability to fully realize a project has become critical in attracting investment for frontier exploration prospects.

BPC concludes that the positive attributes of its project has helped it attract the attention of both major and independent operators, although progress has been slower than hoped.

09/27/2016

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