It is shaping up to be a critical year for Bahamas Petroleum Company Plc (LON:BPC) as it advances farm-out talks with potential new partners, so says stockbroker WH Ireland.
BPC today raised £2.6mln via a share placing, selling 260mln new shares priced at 1p each.
Most of the cash will be used to ensure the group’s licenses are ‘maintained in good order’ whilst the farm-out process continues.
BPC declared it was “confident” of being able to conclude a farm-out deal and highlighted that sentiment in the oil market was improving and there was renewed interest among industry major for frontier exploration plays.
It said that commercial negotiations are ongoing with several parties, and noted that some parties had now re-entered the process.
Brendan Long, analyst at WH Ireland, in a note said: “With the regulatory regime buttoned down in the Bahamas, some stabilisation of oil prices, albeit in a lower price context, and given the significantly lower costs of drilling and developing offshore resources, the timing for a farmout is favourable, making 2017 a critical year for Bahamas.”
Bill Schrader, BPC chairman, in a statement said: “BPC has assets that are potentially world class in scale.
“Over the past eight years the company has substantially delineated and de-risked its assets, both technically and commercially. The next step is drilling.
“In order to do this, BPC needs to source funding, and our strategy remains to do so from an industry partner, via a farm-in.
“BPC has made pleasing progress on this task, is in active commercial negotiations with a number of parties, and the board and I remain confident that a farm-in will ultimately be concluded as evidenced by our expressed interest in participating in the placing once we are permitted to do so by the closed period trading rules.”