Shareholders advised of the priority areas moving forward

Bahamas Petroleum Company is embarking on a comprehensive programme of activities that will see an increase in production and cashflow from its operations in Trinidad and Tobago and Suriname.

The company has already notified shareholders of its intent to increase production in its two Caribbean locations. In a Notice of Extraordinary General Meeting and Circular, Bahamas Petroleum advised of its focus in moving forward.

The priority areas that will be focused on are as follows:

Saffron # 2 appraisal / production well to be drilled in May / June 2021 in Trinidad, budgeted cost $3m million, expected production in the range of 200 – 300 bopd generating cashflows of US$1.8 – US$2.6 million per annum, and paving the way for a full-field development projected to achieve in an initial phase average daily production of 1,000 – 1,500 bopd / generate annualised cashflows of US$8 – US$12 million; and longer-term an overall field development could ultimately comprise up to 30 wells in total, with a peak projected production of approximately 4,000 bopd;

Appraisal well and extended well test at Weg Naar Zee in Suriname planned to be drilled in July 2021, budgeted cost US$0.7 million capital expenditure, and paving the way for an initial field development projected to produce c.100 bopd / generate annualised cashflows of US$1m per annum; and longer-term with a full WNZ field development scenario projected to generate annual cash flows for the Company in excess of US$2.5 million.

Ongoing production maintenance and enhancement work in Trinidad and Tobago, from five producing fields with current production averaging in the range of 450 – 500 bopd, currently generating annual cashflows to BPC of approximately US$3 million per annum, and with the potential for cashflow growth from enhanced production levels and/or increased oil prices.

Low-cost continuation of exploration activities, including maturation of exploration targets in Trinidad, a process for farming out the Company’s principal licences in The Bahamas (alongside renewal of those licences), and initial technical work in relation to the Company’s licence in Uruguay (and consideration of potential farm-out options in relation to that licence).

Additionally, a cost cutting initiative has commenced across the company with a view to reducing its ongoing cost of operations by at least 20% – 30%.

Recapitalisation of the company is also under way through a proposed £6.9 million (c. US$9.6 million) open offer to Qualifying Shareholders of approximately 1.967 billion shares at a price of 0.35 pence per share on a 1 new share for every 2.46 shares held basis.

BPC also plans to change the name of the company to Challenger Energy Group Plc. Chairman Bill Schrader reports that, “the company is focused on restoration, renewal and refreshment”.

Bahamas Petroleum forward business strategy

According to the chairman, “in this context, the company’s forward business strategy for the coming 12-18 months has been firmly set on significantly increasing oil production and thus cashflow from our assets in Trinidad and Tobago and Suriname”.

The board considers this to be the most effective manner in which to restore value and create a foundation for future value growth.

Eytan Uliel, the company’s commercial director, will become chief executive officer. This is subject to completion of the required due diligence and onboarding processes for new company directors.

Simon Potter is to transition to a non-executive director role effective May 20, 2021 while non-executive directors, Adrian Collins and Ross McDonald are to step down from the board.

Stephen Bizzell is to join the board as a non-executive director, subject to completion of the required due diligence and onboarding processes for new company directors.