Bahamas Petroleum gets clarification on licence term
By Josh White
Date: Friday 22 Feb 2019
(Sharecast News) - Bahamas Petroleum Company has received formal notification from the Government of The Bahamas as to the term of the second exploration period of its four southern licences in the territorial waters of the Bahamas, it announced on Friday, confirming that the current second exploration period of the licences was extended until 31 December 2020.
The AIM-traded firm said the notification was received in response to its request for clarification from the government as to the term, timing of, and work obligations pertaining to the licences, given disruptions outside of the control of the company since 2015.
It said the notification provided clarity and certainty to all parties as to the tenure of the licences.
BPC said its obligation during the second exploration period was to safely implement an environmentally-responsible exploratory well.
At the end of the period, based on the results of the initial exploration well and in accordance with the existing terms of the licences and the relevant regulations, the company said it would have the option to apply for a production lease over all or part of the licence area, or extend the licences into a third exploration period, or apply for an appraisal extension.
The notification received from the government also stipulated that both the government and BPC must, in the coming months, agree a forward work programme for 2019 and 2020, and a reconciliation of licence fees already paid - including during the period of disruption - with any future licence fees due up to the end of 2020.
BPC said the forward programme would include the process for environmental authorisation, in accordance with the relevant act and regulations, based upon an application already submitted by the company in April last year.
The government had advised of the engagement of Black & Veatch, a petroleum industry consultant, to assist with that process.
Black & Veatch previously advised the government in the process for the company's environmental impact assessment, filed in 2012.
At the same time, along with its advisers, the firm said it was continuing the process to secure a farm-in partner for the initial exploration well, with discussions continuing with multiple third parties.
"The confirmation from the Government of The Bahamas that the current term of our four southern licences extends to 31 December 2020 provides the company with a certainty of tenure over the company's licences, replacing any perceived 'above ground' issues with complete clarity in fact and law," said chief executive officer Simon Potter.
"This position has been arrived at following extensive government consultation and whilst this has taken the company a while to establish, there is now a very clear two-year window to advance plans for and to drill an exploratory well providing certainty to potential partners as we move forward in our farm-out discussions."
Potter said the news would add "considerable impetus" to that process.
"BPC's focus remains singular - to implement an exploratory well on its highly prospective assets in The Bahamas to the benefit of shareholders and the people of The Bahamas.
"We are encouraged by the support the government has shown throughout this process, thank them for it and look forward to updating shareholders on further progress when appropriate."
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