Bahamas Petroleum (BPC), the Caribbean and Atlantic margin focused oil and gas company, with production, appraisal, development and exploration assets across the region, has provided an update on its strategy, deliverables and 2021 work program for its portfolio of assets in Trinidad and Tobago and Suriname. The Company's work program priorities follow receipt of a Competent Person's Report ('CPR') by independent reserves auditor ERC Equipoise ('ERCE'), in respect of the reserves and resources attributable to the Company's currently producing assets in Trinidad and Tobago and the planned extended well test ('EWT') in Suriname, as at 30 September 2020.
- Trinidad and Tobago and Suriname strategy defined to deliver by end of 2021:
- A revenue run-rate of >$35 million per annum
- An operating cashflow run-rate of >$15 million per annum
This is based upon achieving, or exceeding, a production target of 2,500 bopd, current oil prices, and an extraction cost of <$20 per barrel
- A comprehensive 2021 work program has been developed to deliver this strategy, with planned activity across BPC's portfolio of assets in Trinidad and Tobago, and Suriname:
- Base program of 2 appraisal wells, up to 13 production wells, and up to 2 exploration wells (all subject to permitting)
- Production and potential development could be further accelerated by adding up to an extra 11 production wells and 1 extra exploration well (subject to permitting and rig availability)
- 2021 base work program in detail:
- Drilling of Saffron #2 appraisal well commencing in February 2021, which, subject to results, would rapidly see BPC seek approvals for a Saffron field development, and with up to 7 production wells to follow through 2021
- Drilling of appraisal well and an Extended Well Test (EWT) in the Weg Naar Zee Block in Suriname in February 2021, and subject to results, rapidly moving into a wider field development, with up to 6 production wells to follow through 2021, and
- Completion of reprocessing of the entire 3D seismic grid over the highly prospective South West Peninsula (SWP) of Trinidad, high-grading Saffron lookalike prospects for drilling, with up to 2 initial exploration wells by the end of 2021
- Depending on technical outcomes, speed of permitting approvals, and rig and funding availability, an accelerated 2021 work program could include:
- Up to a further 8 Saffron production wells in Trinidad and Tobago,
- Up to a further 3 Weg naar Zee production wells in Suriname, and
- A further 1 exploration well in the SWP
- Anticipated capital expenditure for the base work program of up to $20 million, and up to approximately $35 million in a scenario where all developments and exploration activities are accelerated (in all cases subject to funding and rig availability and permitting)
- As with Perseverance #1 in The Bahamas over the past 2 years, the Company has developed a funding strategy for operations in Trinidad and Tobago and Suriname, which it will seek to implement in coming months and thereafter through 2021 so as to ensure funding for planned operations is available as and when required, on the best possible terms, with a view to achieving the best outcomes for shareholders
- For BPC's currently producing assets the CPR indicates:
- Certified net 2P reserves across BPC's portfolio of production assets in Trinidad and Tobago of 1.29 MMbbl - exceeding BPC's target for end of 2020 by 30% (BPC calculates this represents in excess of US$50m of undiscounted gross future cashflow at $40/bbl oil), and
- Certified net 2C contingent resources of 7.46 MMbbl across BPC's portfolio of production assets in Trinidad and Tobago and in Suriname, providing clear direction as to where to apply work and capital during 2021
Simon Potter, CEO of BPC, said:
'BPC's stated strategy has been to complement high-impact exploration activities with producing and thus cash generative assets. In this context we are pleased to advise of our upcoming work program for 2021 in Trinidad and Tobago and Suriname, which will see us execute an aggressive program of new wells - exploration, appraisal and production - across the portfolio, evidencing our commitment to operations in those countries.
Our 2021 work program is targeting the addition of entirely new productive capacity, rather than having to expend capital to simply produce existing reserves. Thus, this work is directly in pursuit of our stated production goal, to achieve and potentially exceed a production level of 2,500 bopd by the end of 2021. The program as a whole represents a material increase to that previously undertaken prior to BPC assuming control of these assets.
Systematic maturation of our resources into reserves through technical application and prioritised capital deployment is a core part of our business strategy. The CPR just received is firmly in line with that strategy. In confirming 2P reserves that are 30% in excess of what we had prognosed at the time of acquisition, the CPR provides confidence that our target baseline production is underpinned for a number of years to come, whilst also providing a roadmap by which this number could be grown further.
Our focus for continued resource and reserves growth now turns to the South West Peninsula of Trinidad, where in addition to appraisal of the Saffron discovery we have identified 9 other prospects of roughly equivalent size to Saffron. The Saffron #2 well, targeting a thicker downdip reservoir section, will mature the BPC technical understanding of the Saffron field, and further inform our development plans. We have already awarded a contract for initial 3D seismic reprocessing of the dataset that covers the SWP as a whole, which will underpin maturation and prioritisation of prospects for exploration drilling later in 2021. These activities, once completed, are expected to result in a material contribution to growth of our 2P reserves and 2C resources, with a CPR update targeted for Q2 2021 to incorporate the outcomes of these workstreams, and to inform ongoing work in pursuit of our production target of 2,500 bopd by the end of 2021.'