TIDMBPC
RNS Number : 8608Z
Bahamas Petroleum Company PLC
20 December 2017
20 December 2017
Bahamas Petroleum Company plc
("BPC" or the "Company")
Company Update - Moyes & Co. Technical Audit
Bahamas Petroleum Company plc, the oil and gas exploration
company with significant prospective resources in licences in The
Commonwealth of The Bahamas is pleased to provide the following
update.
Highlights
-- External technical audit conducted by Moyes & Co
("Moyes") indicates aggregate mean volumetrics assessed for the key
structures in BPC's southern licences is a STOIIP of 8.3 billion
barrels, with an upside of up to 28 billion barrels STOIIP. Moyes
independently calculated the probability of success ("PoS") factors
for each of the major reservoirs assessed, the majority of which
were calculated in the 25 - 35% range.
-- Applying a recovery factor in the range of 20% - 40% to the
Moyes STOIIP volumetrics would result in an unrisked Estimated
Ultimate Recoverable ("EUR") in the range of 1.6 billion to 3.3
billion barrels (mean), and up to 11 billion barrels (upside).
-- Outputs from the Moyes technical audit reconfirms BPC's
belief that the minimum field size for an economic development is
less than 0.2 billion barrels.
-- Active cost management means Company forecasts existing cash
reserves are sufficient to continue normal operations through
2018.
Simon Potter, Chief Executive Officer of Bahamas Petroleum
Company, said:
"We are pleased to have received the results of the technical
audit from Moyes & Co. The independent audit has validated our
previous technical work, confirmed the scale of our own internal
resource estimates, and provided new technical insight that further
mitigates and reduces technical risk. We believe these positive
findings will further assist us as we continue to move forward with
our farm-out process over the coming months."
Technical Audit
In August 2017, in the context of BPC's ongoing farm-out
process, the Company engaged external technical experts to conduct
an independent audit of BPC's own assessment of the total petroleum
system and drill prospects within its four southern licences,
utilising the full range of the Company's exhaustive database.
This external technical audit was conducted by Moyes & Co
("Moyes"), a leading international petroleum industry consultancy
(see www.moyesco.com). The scope of Moyes work was an audit of
existing data and BPC's interpretation thereof. The range of data
provided to Moyes included the 2D and 3D interpreted seismic data
sets and BPC's own evaluation of reservoirs and traps. Moyes then
independently reviewed this considerable volume of technical data.
Supplementing this work was a review by Moyes of various
proprietary studies and published papers.
Moyes had previously prepared a Competent Person's Report
("CPR") utilising the legacy regional 2D and the then available
data ahead of BPC's original listing in 2008. A subsequent CPR was
prepared by Ryder Scott in 2011 benefitting further from the then
newly acquired 2D in 2011 as well as the vast body of data
accumulated in the intervening period. This most recent study by
Moyes, as noted, accessed the complete seismic data base including
the entire interpreted 3D data volume.
The key findings of this technical audit are as follows:
-- Moyes work included independently calculating
deterministically derived volumetrics for each of the main stacked
reservoirs in the C-Fold structure and the entire length of the
B-Fold structures. The aggregate mean volumetrics assessed by Moyes
for these structures was a STOIIP of 8.3 billion barrels, with an
upside of up to 28 billion barrels STOIIP. This corroborates the
previous estimates and BPC's own internal estimations.
-- In the course of reviewing the Company's data, Moyes
identified strong amplitude conformance to structure at multiple
levels in both the Fold-B and Fold-C structures, with interval
velocity reductions within dip closure strongly suggestive of
enhanced fracture porosity, further interpretation could also imply
the presence of hydrocarbons in the pore spaces. Enhanced fracture
porosity/permeability has always been believed by BPC given the
brittle carbonate rock setting in heavily folded structures.
-- Geophysical characteristics of this type are a key technical
indicator generally used by the oil and gas industry to assess a
prospect's exploration potential but are typically more difficult
to image in carbonates. The ability of BPC to offer this
interpretation to potential farm-out partners represents a further
significant reduction in the exploration risk of the project.
-- Using this information, Moyes independently calculated the
probability of success ("PoS") factors for each of the stacked
reservoirs assessed in their technical audit, the majority of which
were calculated in the 25% - 35% range, though a few are risked at
12% - 15%. BPC believes that these PoS figures would be considered
globally competitive when compared to other similar uncalibrated,
frontier basins.
-- Moyes has concluded that BPC's seismic horizons, mapping and
primary fault interpretations are reasonable and acceptable.
Following on from these findings:
-- To generate an unrisked Estimated Ultimate Recoverable
("EUR") volume, a recovery factor needs to be applied to STOIIP
estimates. Recovery factors in carbonates vary considerably
dependent on a number of factors, primarily diagenesis and
fracturing, but are typically within a range from 20% - 50%.
-- Employing the enhanced porosity/permeability model of
reservoir quality supported by the Moyes audit, BPC considers the
recovery factors for fields within its Southern Licences would be
at the higher end of the range defined above, more consistent with
the Ku Maloob Zoop field offshore Mexico as a global analogue where
recovery factor exceeds 35%.
-- Applying a recovery factor in the range of 20% - 40% to the
STOIIP volumetrics calculated by Moyes would result in an unrisked
EUR in the range of 1.6 billion to 3.3 billion barrels (mean), and
up to 11 billion barrels (upside). In aggregate, these figures are
less than BPC's own internal resource estimates, but are larger
than those determined by Ryder Scott in 2011 for the same
structures (as per the previously disclosed Ryder Scott CPR which
is available via the website www.bpcplc.com); as noted, the Ryder
Scott CPR was completed without the benefit of the modern 3D
seismic acquired and interpreted by BPC in 2011/2012.
-- The probability of success (PoS) defined by Moyes (above) can
be applied to unrisked EUR estimates to generate risked EUR
figures.
As previously advised, given the current competitive rig market,
estimated drilling costs, available up-to-date technical data and
other relevant factors to an eventual field development (proximity
to existing infrastructure, contractors and service suppliers etc.)
BPC believes that the minimum field size for an economic
development is less than 200 million barrels (versus the resource
estimates measured in billions of barrels, as noted in the Moyes
review), and that the project would thus offer robust profitability
even in a comparatively lower oil price environment, well below
that currently prevailing.
Financial Update
As at 30 November 2017 the Company had $2.6 million in total
cash reserves. As a result of the continuation of previously
advised cost cutting exercises, including ongoing deferral of 90
per cent of executive remuneration, together with the recent
agreement by the other members of the board to match the percentage
and terms applied to the executive's remuneration, effective 1
January 2018, the Company presently forecasts that existing cash
reserves are sufficient to continue normal operations through 2018.
The Company's strategy remains to complete a farm-in with a
suitably qualified partner during this time, such farm-in to
provide the funding necessary to undertake the drilling of an
initial exploration well.
Ends
For further information, please contact:
Bahamas Petroleum Company plc Tel: +44 (0)
Simon Potter, Chief Executive 1624 647 882
Officer
Strand Hanson Limited - Nomad Tel: +44 (0)
Rory Murphy / James Spinney 20 7409 3494
Shore Capital Stockbrokers Tel: +44 (0)
Limited - Broker 207 408 4090
Jerry Keen / Toby Gibbs
CAMARCO Tel: +44 (0)
Billy Clegg / James Crothers 20 3757 4983
Notes to editors:
It is noted that despite the Company's efforts and confidence in
its ability to ultimately secure a farm-in or financing, no
assurance can be provided that a farm-in or other financing will be
concluded, or on what terms, or in what timeframe.
Bahamas Petroleum Company is an oil and gas exploration company
with 100% owned offshore licences exclusively focused on The
Commonwealth of The Bahamas. The Company has significant
prospective resources, which have been de-risked through both
extensive 2D and 3D seismic. The Company is intent on delivering
safe and environmentally responsible exploration.
Qualified Person's Statement:
In accordance with the AIM Note for Mining and Oil and Gas
Companies, Bahamas Petroleum Company discloses that Randolf
Hiscock, Bahamas Petroleum Company Technical Lead is the qualified
person who has reviewed the technical information contained in this
document. He has a Masters in geology and is a member of the AAPG.
He has over 35 years' experience in the oil and gas industry.
Randolf Hiscock consents to the inclusion of the information in the
form and context in which it appears.
This volumetrics in this release were prepared in accordance
with the PRMS as issued by the Society of Petroleum Engineers.
www.bpcplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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