LONDON: Bahamas Petroleum Company (BPC) has been chosen as the successful applicant for the award of an exploration licence offshore Uruguay by the Uruguayan national regulatory agency, ANCAP. This follows a period in which BPC’s technical and operational credentials were first evaluated by ANCAP and BPC was approved as a qualified offshore operator, and thereafter BPC submitted an application for the AREA OFF-1 block.

The OFF-1 licence provides for an initial four-year exploration period, during which time BPC will reprocess approximately 2,000 kilometres of legacy 2D seismic and undertake a number of new geotechnical studies. The Company expects that the cost of the work program in the initial period will consist of approx. US$200,000 per annum in historic seismic data acquisition and reprocessing, G&G studies and other technical work to be largely supported by the Company’s existing technical staff base currently supporting operations in The Bahamas.

Apart from the costs of completion of the minimum work program there are no annual licence fee payments, and no drilling is required in the initial four-year period, with extension into a second exploration period entirely at BPC’s election. Key terms of the licence agreement are summarized further in Table 1 below.

OFF-1 has many operational and subsurface similarities to BPC’s licences in The Bahamas – the Uruguay and Bahamas acreage is in similar water depths, both contain multiple, lower exploration risk structural plays in addition to the high impact fans, and both have material volume scope and extensive running room.

Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said: “The scale of the opportunity that our planned drilling campaign in The Bahamas may unlock for us, at the end of 2020, means that our personnel are and will remain entirely focussed on their efforts to deliver the Perseverance #1 exploration well successfully.

“However, the current period of introspection in our industry is presenting nimble, forward-thinking companies such as ourselves with compelling opportunities to expand our portfolio and achieve countercyclical growth. The recently-closed Open Licencing round in Uruguay presented exactly such an opportunity for us where, for very low cost, we have been able to secure an exploration licence of an extremely high-calibre that, even as recently as a few months ago, we most likely would have been outbid on by much larger players.

“We are especially pleased to have been awarded OFF-1 given that the licence represents a similarly underappreciated opportunity to that secured by the Company in 2007 in The Bahamas – a licence in a region with extensive existing seismic of various vintages, but largely underexplored, and requiring the application of more modern, state of the art seismic imaging technology and techniques to understand the full extent of the petroleum resource.

“We are confident that over the next four years we can bring to bear our expertise, gained in The Bahamas over the past decade, on OFF-1 so as to more fully evaluate the licence’s potential, in the hope that in the longer-term we can create an opportunity of equal value and industry interest to what we have thus far accomplished in The Bahamas.”