Bahamas Petroleum is pleased to announce that it has received notification from the Government of The Bahamas, via the Ministry of the Environment, that the statutory term for the five licences held by the Company have each been renewed. The new licence term is for a further three years with an obligation to commence the drilling of an exploration well by April 2015. The Company expects to meet this obligation, subject to financing via a farm-out agreement, with an exploration well in the southern licences anticipated in the second half of 2014.
The licences nominally comprise four three-year terms. The requirements of the first term, which concluded on 26 April 2012, were all considerably exceeded. Under the licence renewal terms, the second term of the licence has been extended to 2016 with the requirement to commence a second exploration well also extended to April 2017.
As part of this renewal, the southern boundaries of the four southern licences are to be adjusted to conform to the maritime boundary between The Bahamas and Cuba, providing tenure over the full extent of the existing mapped structures.
Exploration activities in The Bahamas will benefit from the Government’s clarity on stronger, modernised regulations on petroleum exploration. The Company welcomes this step and future operations will be conducted in full compliance with regulations. To date, the Environmental Impact Assessment has been completed in line with international best practices and standards in anticipation of the new regulations and will be further supplemented by the completion of the Environmental Management Plan, already well underway.
Farm-out discussions remain on-going with a number of interested parties. This formal licence renewal and extension, following on from the mandate for exploration drilling to proceed without the need for a referendum, provides significant clarity for potential partners.
Simon Potter, CEO, commented: “We welcome the Government’s decision to renew our licences, offering further clarity on our path forward as we progress our operations towards drilling the first exploration well ahead of the 2015 obligation. The extension provides us with the necessary time for safe well planning and affords the opportunity to avoid operating risks associated with the hurricane season. Revising the regulations is an important step to ensuring that an appropriate framework is put into place and international standards will govern any future activities.
“We are in discussions with a number of potential partners to join us in the planned exploration drilling programme and see the increased clarity from the Government as a supportive move in this process.”