Bahamas Petroleum Company (BPC) has signed an offshore drilling rig contract with Stena Drilling. BPC will use the drilling rig to drill its Perseverance #1 prospect offshore The Bahamas.
As previously reported, Bahamas has postponed the Perseverance #1 drilling operation from H1 2020 to Q4 2020 due to the COVID/19 pandemic, and to avoid drilling during the peak of the Bahamian hurricane season, which traditionally ends in November.
The rig contract with Stena replaces the previous contract for a drilling rig that the company anticipated entering into with Seadrill.
Bahamas Petroleum Company said on Tuesday, that based on the terms of the drilling contract, the company has significantly reduced cost estimate, by about 15%, for its first exploration well in The Bahamas.
Under the contract, Stena Drilling will provide a sixth-generation drilling rig, which may be any of the Stena IceMax, Stena Forth, or Stena DrillMax, including integrated supply of a Managed Pressure Drilling (MPD) unit.
The firm window for the start of drilling between December 15, 2020, and February 1, 2021, consistent with license obligations as extended by the Covid-19 force majeure event.
The Perseverance #1 well targeting recoverable P50 oil resources 0.77 billion barrels, with an upside of 1.44 billion barrels.
"Reduced cost estimate creates scope for expanded formation evaluation work in the success case, without increasing previous estimated total capital requirement," the company said.
Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said: "In March 2020, we were within weeks of commencing the drilling of our Perseverance #1 well when we were compelled to defer our planned drilling program due to the impacts of the Covid-19 pandemic. Immediately we undertook a range of activities necessary to reschedule activity toward the end of 2020 and into the first quarter of 2021, consistent with our license obligations (as extended for the declared force majeure event), by which time we expect the worst of the broad suite of impacts of the pandemic to be behind us.
"To this end we are pleased to announce that we have today entered into a rig contract with Stena Drilling, which provides a firm series of parameters on rig rate, provision of MPD, mobilization and demobilization costs, and defines a revised drilling window of 15 December 2020 to 1 February 2021."
"This decision - to lock in a rig now, at an already favorable rig rate, rather than try and second guess what markets and availability will look like later in the year - speaks to our intent to ensure Perseverance #1 is drilled at the soonest opportunity, and provides the necessary certainty needed for operational planning. Acting decisively in this way is consistent with our single-minded focus on technical delivery."
"Importantly, the commercial parameters in the rig contract have allowed us to not only revise down significantly the anticipated well cost, but also clears the way to revisit our funding strategy with adequate time to ensure we have the funds available as and when we need them, on the best possible terms. I look forward to updating shareholders in the coming months as we continue making progress towards recommencing operations."
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