Bahamas Petroleum Company PLC (BPC)—the oil exploration company with five licenses and a mandate to sink an exploratory oil well by April 2017 — told potential investors in London that it has decided to prioritize three applications for new licenses as the oil exploration company seeks to drive home three key messages: that the prospects in The Bahamas are “derisked and drill-ready”, that they are commercial in scale and that the atmosphere is “commercially advantaged”.

The message was delivered through a presentation titled “A world-class exploration opportunity,” delivered in London on September 8 by Eytan Uliel, BPC commercial director, and Ben ProffiI, finance director.

Uliel and Proffil reported that BPC has incurred $100 million in sunk costs to date, and that multiple exploratory well locations have been identified, with studies suggesting a potential production capacity of more than 2 billion barrels of oil per day, all underpinned by an “attractive operating, regulatory and fiscal regime,” with favourable cost impact of local access to markets, infrastructure, contractors and suppliers, and supported by strong economics, low break-even volume and/or pricing of $30 to $40 per barrel.

One critical selling point was the fact that five prior wells had been drilled in The Bahamas from the 1950s to the 1980s, and according to BPC’s research, “all had oil shows”. This was further evidence of a working petroleum system in The Bahamas. Another selling point was the proximity to U.S. GOM (Gulf of Mexico) markets, infrastructure, contractors and suppliers, as were the fiscal terms: a 12.5 percent to 25 percent sliding scale royalty only — no other taxes or government take.

Licenses

Regarding the existing four southern licenses, BPC explained that the license had been extended to The Bahamas — Cuba maritime boundary, and that the fifth license — the so-called Miami Northern license — is “likely to be relinquished”.

Uliel and Proffil noted that BPC’s licence applications have been consolidated and prioritized to three applications.

Commercial considerations

“BPC prospect is world-class from a fiscal perspective,” Uliel and Proffil said, citing an attractive net contractor take, a low minimum economic field size at less than 200 million barrels and the estimated break-even price of $30 to $40 per barrel.

Among the other selling points were the fact that there is no government participation in BPC, no corporation or tax and no capital gains tax.  Also prime among BPC’s selling points was the new royalty regime: 12.5 percent up to 75,000 barrels of oil per day (bopd); 15 percent for 75,000 to 150,000 bopd; 17.5 percent for 150,000 to 250,000 bopd; 20 percent for 250,000 to 350,000 bopd; and 25 percent over 350,000 bopd, with a 12.5 percent royalty on gas.

Shareholders

BPC also disclosed its significant shareholders as at June 30: TD Waterhouse, Hargreaves Lansdown, HSDL, Barclays Stockbrokers, Interactive Investor, HSBC Private Bank, Selftrade and JM Finn.