Bahamas Petroleum Signs Rig Contract For Perseverance #1 Well

(Alliance News) - Bahamas Petroleum Co PLC on Tuesday said it has signed a drill rig contract ...

Alliance News 26 May, 2020 | 6:50PM
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(Alliance News) - Bahamas Petroleum Co PLC on Tuesday said it has signed a drill rig contract with Stena Drilling and has lowered its estimate for the total cost of the Perseverance #1 well.

The contract is fully termed, binding and unconditional, and provides the certainty of a firm time slot for the delivery of a drilling rig on location in a window between December 15 to February 1.

"The rig contract entered into with Stena replaces the previous contract for a drilling rig that the company anticipated entering into with Seadrill Ltd, and provides for improved terms (notably, an all-in rig cost, including managed pressure drilling system, lower than that previously anticipated)," Bahamas Petroleum said.

As a result, the company now has a revised estimate for the total cost of drilling operations for the Perseverance #1 well of between USD21 million to USD25 million, lower than its previous range of USD25 million to USD30 million.

"The revised firm pricing and operating parameters encapsulated in the rig contract, as well as broader industry conditions exerting downward pressure on pricing, has provided an opportunity for the company to revisit the cost of the Perseverance #1 well," the firm explained.

The company continues to assess there to be up to USD5 million in potential operating contingency costs, and has scoped up to USD5 million of provisional costs for additional formation evaluation work that the firm could elect to incur in a success case.

Shares in Bahamas Petroleum closed up 17% at 1.58 pence in London on Tuesday.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Bahamas Petroleum Co PLC 2.45 GBX -2.00 -

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