Shares in Bahamas Petroleum (BPC:AIM) plunged 66.9% to 0.68p as it announced it had abandon the Perseverance-1 well in the Bahamas after more than a decade of development. One of the most long-awaited wells in the oil E&P (exploration and production) universe, hopes of a huge discovery were shattered as drilling came up largely dry.
Oil was struck but not in volumes needed to make the well commercially viable. Bahamas Petroleum will now spend several weeks assessing all of the technical information gathered during drilling.
‘LIVING TO FIGHT ANOTHER DAY’
The company said it would ‘review the appropriate way forward for future monetisation of its business in The Bahamas, in particular with a view to renewal of a farm-in process’.
We looked at the well and the wider context for the company in advance of the result here. It has long journey for investors since the company’s AIM IPO in September 2008. The plan at that point was to drill in 2012.
Original partner Statoil pulled out in 2014 and an unnamed oil major exited an exclusivity agreement ahead of a potential farm-out back in August 2018.
House broker Shore Capital commented: ‘Following last year’s merger with Columbus Energy, we now see a much more diversified player with exposure across the E&P value chain, with great potential for drilling catalysts, reserves additions and production growth across the former Columbus portfolio in Trinidad and Suriname.
‘So, although today’s Perseverance-1 well result is undoubtedly disappointing, and will naturally lead to a material reduction to our last-published Risked NAV (net asset value) estimate of 9p/share, we firmly believe that BPC will be living to fight another day.’
