- As a result of the massive, unprecedented and adverse impact of the spread of the Covid-19 virus, safe and responsible drilling operations in the planned May/June 2020 timeframe can no longer be assured; drilling operations are thus being rescheduled to October 2020 onwards.
- The impact of the response to the spread of the Covid-19 virus, both globally and in The Bahamas, also constitutes a force majeure event under the terms of the company’s licences; the company has notified the Government of The Bahamas of such, which is expected to result in a corresponding extension to the current term of the licences.
- Key elements of the company’s finance package have been successfully rescheduled; the company is in a strong cash position and in the coming months will be seeking to redefine operational plans and major contractor arrangements consistent with a revised work programme timetable.
- Farm-in process continues; the company has begun considering other opportunistic strategic alternatives arising as a result of the current global crisis.
Simon Potter, CEO of Bahamas Petroleum, said: “Our primary objective is safe operations, best delivered by the ability to drill uninterrupted by external events for the period of the drill plan. Given the ever-evolving adverse impact of the response to the spread of the Covid-19 virus – which is changing daily and is affecting everyone and all enterprises, around the globe – it has become clear to us that if we continue to push forward with drilling in the first half of 2020, safe and responsible operations would be compromised. We have accordingly notified the Government of The Bahamas that a force majeure event has occurred, which is expected to result in an extension to the current term of our licences, and we are rescheduling our drilling plans accordingly, to after October 2020.
I know this will be disappointing for shareholders, as it is for management and the Board alike, given all the progress we have thus far made toward drilling of the Perseverance #1 well, but as a prudent operator we need to assess the risks objectively and act appropriately. Shareholders should be encouraged, however, that we are in a strong position to resume drilling activities toward the end of 2020, compared to where we were just a year ago. The company has cash reserves, and financial backers intent on flexibly supporting the company. We have a robust drill plan that has been risk-assessed and reviewed by insurers and contractors alike, a range of long-lead and critical path items have already been purchased and will be warehoused ready for immediate redeployment, and the rig market is changing rapidly such that there will likely be a surfeit of capable rigs towards the end of this year in a competitive price environment. We also have an approved Environmental Authorisation from the Government of The Bahamas, farm-in discussions remain on foot, and the current crisis is presenting a number of interesting alternative opportunities for us.
Moreover, the company’s prospect has not changed: the same rocks will still be there at such time as safe and responsible operations can resume, and shareholders can rest assured that the entire team at the company will continue working towards drilling with the same commitment, passion and belief that has got us to this stage.
The spread of the Covid-19 virus represents a global threat to our collective way of life, and we all have to face reality over the coming months – which in the case of our company means pausing our drilling plans for a time, as hard as that may be. We hope that all of our shareholders, stakeholders, employees and contractors take care, and stay safe and well in this extremely difficult time for all.”