Bahamas Petroleum Company (BPC) has entered into a confidentiality and exclusivity agreement with a “major international oil company” to conclude a detailed technical evaluation of the company’s licenses in The Bahamas.
The BPC said on Thursday that the partner would also seek to develop a commercial framework for a potential transaction.
“Whilst to date the company has been working with a number of major oil companies in conducting an evaluation of the company’s licences with a view to concluding a mutually beneficial commercial transaction, under the terms of this agreement, the company, and the counterparty will now work exclusively together for at least the next three months,” BPC said.
Under the agreement, Bahamas Petroleum Company will receive a non-refundable cash payment of $250,000 per month ($750,000 in aggregate) for the initial three-month period of exclusivity with an additional $250,000 per month for any extended period of exclusivity, up to a maximum of a further three months.
BPC added that these amounts would be reflected in the company’s income statement as and when received.
Unless and until a definitive farm-in or other commercial arrangement is agreed with the partner, its identity will remain confidential.
Given the exclusivity arrangements in the agreement, discussions, and negotiations with other potential partners have been suspended.
According to the BPC, despite entry into the agreement, no assurance can be provided that a commercial transaction will ultimately be concluded with the oil company, or on what terms, or in what timeframe.
Simon Potter, CEO of the Bahamas Petroleum Company, said: “The decision to enter into an exclusivity agreement with a reputable international industry operator is a significant step in our ongoing process to secure a partner for our highly prospective assets in The Bahamas.
“We look forward to working closely with the counterparty over the coming months, and we will update the market of any material developments as and when appropriate.”
Bahamas Petroleum Company currently owns 100% equity in five exploration licenses, Bain, Cooper, Donaldson, and Eneas in Southern Bahamas and Miami in Northern Bahamas. Bahamas Petroleum Company has made three, 100% equity applications named Zapata, Islamorada and Andros.