2D Seismic Acquisition
Bahamas Petroleum Company has seen significant advances in its exploration programme. The focus during 2011 was to gather the data and complete the technical studies needed to understand the petroleum system and to further reduce the geologic risk. The Company is now at the point where the only remaining step that will further materially impact risk is to drill a well.
Accordingly, as we moved into 2012, our focus shifted to completing the work required to finalise locations and more importantly to completing the studies necessary to plan and to safely execute the drilling of our initial obligation well.
New Licence Applications
Based on the interpretation of the 2D seismic, the Company applied for two additional licences in the Santaren Channel. Thus in total the Company now has five licence applications currently under review by the Bahamian Government; two 100% Bahamas Petroleum Company and three joint applications with Statoil. In the joint venture with Statoil an Environmental Feasibility Study (EFS) has been submitted and is currently under review by the BEST Commission and their consultants.
Competent Persons Report
Based upon the acquired 2D, an independent assessment of the hydrocarbon potential in the Bain, Cooper and Donaldson licences was prepared by Ryder Scott Company and released July 2011. Ryder Scott’s evaluation documented that three of the four structures, Folds A, B and C, have an unrisked potential in excess of 1 billion barrels of recoverable oil. The report also addressed the chance of success for each structure with the COS ranging from 23% to 35% over most intervals. This report validates the vision of our founder, Alan Burns, that The Bahamas have the potential to be a significant oil province. It is important to note that the CPR dealt only with the Aptian through Top Cretaceous interval. The Company believes considerable additional potential also exists in the shallower Tertiary section, in stratigraphic traps off structure and in the deeper Upper Jurassic section.
Fugro Sea Bottom Survey
In June and July Fugro Geosciences were contracted to collect nearly 5,000 line kms of high-resolution multibeam, back scatter and sea bottom profile data. These data were used to help plan the 3D acquisition and will be required for completion of an Environmental Management Plan (EMP) in compliance with regulations. The data are currently being interpreted to prepare the drilling hazard evaluation of several potential drill sites on Fold B.
Preparing to Drill
Bahamas Petroleum Company have engaged a drilling service Company to act as project manager to plan and, as applicable, execute the drilling of our first exploration well. This activity will be divided into three main phases; Front End Engineering and Design (FEED); Procurement; and, Project Execution. Applied Drilling Technology Inc (ADTI) has been awarded the contract and has already commenced work on the first phase. The main deliverable from this work will be a Drill Plan including a plan for operations, logistics and support as well as an executable plan with safety and environmental components consistent with international waste and emissions standards a well as response plans for envisaged emergency situations. The plan will identify long lead time items for well implementation to ensure the schedule stays on track to discharge the programme with licence obligations.
2012 was an active year for Bahamas Petroleum Company as we finalised potential well locations. The government was also working to refine the regulatory framework that governs oil and gas activity. The Company aligned itself with the best practices of Norway, the UK and the US. All parties are committed to sustainable practices and responsible exploration
We reopened our data room for the month of May and allowed parties who have demonstrated serious interest the opportunity to review aspects of the 3D. There continues to be high interest and we are committed to securing a partner prior to drilling. Negotiations have taken longer than initially anticipated; possibly due to potential partners waiting to see election results or the results of drilling currently underway in Cuba. As we move forward with these negotiations we remain mindful of getting appropriate value for our shareholders and for staying on track to meet our licence requirements regarding drilling.
In the coming months the Company will have potentially benefited from the results of extensive drilling activity being undertaken in Cuban waters. The Scarebeo 9 drilling rig commenced activities in late January with a minimum of 5 wells drilled through 2012/3. The first well was operated by Repsol and was plugged and abandoned as a dry hole. In addition, Zarubezhneft, the operator of the Cuban licence immediately adjacent to The Bahamas Petroleum Company southern licence blocks has contracted a rig and expects to begin drilling in November following their recent 3D seismic survey. 2012 will be an active year for Bahamas Petroleum Company as we finalise potential well locations and begin moving in earnest toward drilling. Bahamas Petroleum Company and the Government are working on parallel paths. The Government is working to put the regulations in place to govern oil and gas activity. We are aligning ourselves with the best practices of Norway, the UK and the US as we prepare to drill. Both parties are committed to responsible exploration and preserving the environment for future generations.