Bahamas Petroleum has received notification from Statoil of its intention to discontinue the joint licence development agreement (“JLDA”) held with the Company following significant exploration successes elsewhere and a subsequent review of its global portfolio.
The JLDA has been in place since May 2009. As a result of this decision, the three licence applications − Zapata, Falcones and Islamorada− will revert into the Bahamas Petroleum’s sole name. All application costs to date have been fully borne by the Company.
“This decision provides the Company with the opportunity to offer a wider suite of options to prospective partners and follows the recent mandate from the Government of The Bahamas to proceed with exploration drilling within existing licences. This notification does not affect the status or activities within currently awarded exploration licences, which includes an obligation to commence an exploration well by April 2015. The Company expects to meet the obligation, subject to financing via a farm-out agreement, with an exploration well in the southern licences,” Bahamas Petroleum said in a statement.
Additional progress made in 2013 includes:
• Any public consultation process on future oil development in country deferred until after commercial reserves have been established through successful exploration drilling;
• Notification that the new term for the five licences held by the Company would be for a further three years to 2016;
• Southern licences boundary adjusted to conform to The Bahamas – Cuban maritime boundary, securing tenure over the full extent of the currently delineated structures post the 3D interpretation and mapping; and
• Opening of the data room, leading to on-going farm-out discussions with interested parties.
Simon Potter, Chief Executive Officer, commented:
“We are excited about the level of interest in our data room, which today’s announcement will further support. We have been encouraged by progressing farm-out discussions and a newly clarified Government mandate to proceed with exploration drilling.
“We are now in a position to take whole ownership of the secondary area licence application process and provide an attractive opportunity for potential new farm-in partners. The three licence applications lie adjacent to four of the Company’s fully permitted southern licences and present on-trend upsides to parties already engaged in farm-in discussions.
“Coupled with a robust cash position, our positive outlook remains unchanged as we focus on preparations during the year for the first exploration well.”
Press Release, January 20, 2014