London-listed oil company Bahamas Petroleum Company (BPC) has decided to postpone the drilling of the Perseverance #1 well off Bahamas due to the ‘rapidly unfolding impact’ that the coronavirus, COVID-19, is having on operations.
BPC said on Friday that the drilling of its first exploration well in The Bahamas was pushed back to May or early June 2020. To remind, the previous estimate was April 2020.
The company added that, notwithstanding the recent decline in oil prices, farm-in discussions in the context of BPC’s overall funding strategy continue to advance.
“[…] in recent weeks there has been a material adverse change in the global operating environment, characterized by the rapid spread of the Covid-19 virus and the extraordinary, unprecedented worldwide response to this issue.
“This, in turn, is creating disruptions to global supply chains, limiting free movement for some project essential supplies, and creating onerous restrictions on travel for the movement and mobility of key project personnel, staff, and contractors.”
BPC stated that this influences the rig mobilization window as well as the company’s ability to ensure a 45 to 60-day continuity of operations to complete the drilling campaign.
This also impacts the ability to plan for free movement of mission-critical personnel to and from the drilling rig during operations, and the ability to finalize the selection of an appropriate drilling rig to be available at the right time and place required.
Also, this impairs the review of the integrity and availability of required equipment, goods, and services, and consideration of any potential impacts to pricing and quality.
BPC also cited global commentators which speculated that this high level of operating uncertainty would continue to prevail for at least the next 8-10 weeks, which runs right through the company’s currently scheduled drilling window.
This revised target of drilling operations starting in the second half of May, and no later than early June, has the advantage of avoiding any expected peak in the Covid-19 response, while at the same time enabling operations to be completed before the peak risk period for hurricanes in The Bahamas.
However, if the current adverse circumstances in the global operating environment persist, resulting in continued deferral of operations until after early June 2020, the next practical window to start operations would be from mid-October onwards, following the hurricane season. The company will develop a back-up plan on this basis to meet its primary license obligation – an initial exploration well in 2020.
BPC does not anticipate drilling costs to change as a result of the rescheduled start of operations.
Simon Potter, CEO of BPC, said: “We have made consistent progress toward drilling of the company’s 100 percent-owned and operated Perseverance #1 well, targeting recoverable prospective resources of 0.7 – 1.4 billion barrels of oil.
“As a prudent operator, our primary objective is a safe well, best delivered by the ability to drill uninterrupted by external events for the period of the drill plan. Such a continuous operation is also the most cost-effective. It is in this context that we have had to reassess the timing for commencement of drilling given the widespread disruption being caused by the global response to the Covid-19 virus.
“Pleasingly, farm-out discussions in the context of our overall funding strategy continue to advance. We will update shareholders as appropriate over the coming weeks.”
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