TIDMBPC
RNS Number : 2185A
Bahamas Petroleum Company PLC
28 September 2020
28 September 2020
Bahamas Petroleum Company plc
("BPC" or the "Company")
Interim Results for Six Months to 30 June 2020
BPC, the Caribbean and Atlantic margin focused oil and gas
company, with exploration, production, appraisal and development
assets across the region , is pleased to announce its interim
results for the six months ended 30 June 2020 (the "Period").
Simon Potter, Chief Executive Officer of Bahamas Petroleum
Company commented:
"BPC finds itself transformed from where it started the year. We
are now a full-cycle exploration and production company with
multiple assets in one of the most exciting regions in our
industry, with un-paralleled growth potential and the financial
resources to enact our planned strategy.
"The next six months have the potential to be company making for
BPC and, as such, we look forward to providing further updates as
we continue on our journey toward completing the drilling of
Perseverance #1 in early H1 2021, and as we seek to expand
profitable production activities and generate positive free
cashflow from across the broader portfolio."
Period Highlights
-- Announced planned merger with Columbus Energy Resources to
transform the Company into a full-cycle oil and gas Company focused
on the Caribbean and Atlantic Margin region.
-- Significant progress achieved on preparation for the
Perseverance #1 well during the early part of the period, such that
the well is drill ready.
-- Progressed funding strategy, including securing further
funding (in addition to cash resources and funding facilities)
through a GBP16 million unconditional convertible loan note
facility entered into with a Bahamian family office in February
2020.
-- Strict capital discipline maintained, with cash balance as at
30 June 2020 (before completion of Columbus Merger) of over $12m
compared to $11.1m in December 2019.
-- Quickly reacted to changed industry conditions arising as a
result of the Covid-19 pandemic, including securing a state of the
art drillship from Stena Drilling at a reduced day rate for the
drilling of Perseverance #1, anticipated to commence in late
December 2020.
Post Period Highlights:
-- Successfully completed merger with Columbus Energy Resources PLC
o Merger positions BPC with exceptional, near-term growth
opportunities from the Perseverance #1 well, offshore Bahamas as
well as from the South West Peninsula exploration opportunities in
Trinidad, whilst providing a strong production platform which the
Company intends to grow.
-- Granted an interim 3.5 months force majeure extension from
the Government of The Bahamas for the second exploration period of
BPC's southern licences in The Bahamas, such that the current term
of those licences will now extend to at least mid-April 2021 (that
is, sufficient time to complete Perseverance #1 well activities
-- Confirmed with Stena Drilling that the Stena IceMAX will be
the drill rig for the Perseverance #1 drilling campaign, and that
operations will commence at the start of the contracted drilling
window (15 December 2020), such that a spud date for Perseverance
#1 well prior to Christmas 2020 is expected
Outlook
-- Well logistics and planning activities reactivated for
Perseverance #1 well, with operations to begin in late 2020
o The Perseverance #1 well is targeting recoverable P(50)
prospective oil resources of 0.77 billion barrels, with an upside
of 1.44 billion barrels
-- COVID-19 impact mitigation plans developed and being
implemented in respect of the drilling of Perseverance #1 well, to
ensure capacity to operate in the current environment
-- Work programmes being planned and implemented to increase
production from between 400 to 450 bopd to a target of 500 bopd by
the end of 2020, with longer term targets to increase production to
2,500 bopd net by the end of 2021.
-- Portfolio-wide growth agenda planned over the coming 18
months, based on a number of core strategic imperatives:
o exploration execution,
o profitable production growth driven by an active programme of
'self-help' initiatives and enhanced recovery projects, and
o a range of incremental appraisal/development projects
For further information, please contact:
Bahamas Petroleum Company plc Tel: +44 (0) 1624
Simon Potter, Chief Executive Officer 647 882
Strand Hanson Limited - Nomad Tel: +44 (0) 20
Rory Murphy / James Spinney / Jack Botros 7409 3494
Shore Capital Stockbrokers Limited - Tel: +44 (0) 207
Joint Broker 408 4090
Jerry Keen / Toby Gibbs
Investec Bank Plc - Joint Broker Tel: +44 (0) 207
Chris Sims / Rahul Sharma 597 5970
CAMARCO Tel: +44 (0) 20
Billy Clegg / James Crothers / Hugo Liddy 3757 4983
Notes to editors
BPC is a Caribbean and Atlantic margin focused oil and gas
company, with a range of exploration, appraisal, development and
production assets and licences, located offshore in the waters of
The Bahamas and Uruguay, and onshore in Trinidad and Tobago, and
Suriname. BPC is currently on-track for drilling an initial
exploration well in The Bahamas, Perseverance #1, in late 2020 /
early 2021, with the well targeting recoverable P(50) prospective
oil resources of 0.77 billion barrels, with an upside of 1.44
billion barrels. In Trinidad and Tobago, BPC has five producing
fields, two appraisal / development projects and a prospective
exploration portfolio in the South West Peninsula. BPC's
exploration licence in Uruguay is highly prospective, with a
potential resource of 1 billion barrels of oil equivalent. In
Suriname, BPC has an onshore appraisal / development project.
Chief Executive Officer's Review
The dominant theme of the first half of 2020 was undoubtedly the
dramatic impact that the Covid-19 epidemic had on the global
economy, the oil price and, as a consequence, the outlook and
sentiment towards the global oil and gas sector, and exploration in
particular.
Notwithstanding this unprecedented adverse backdrop, in the
period under review your Company has been successful in effecting a
dramatic corporate transformation. Specifically, as a result of
activities announced during the half-year under review (and
completed post period close) BPC has (a) taken steps to assure
preparedness for the drilling of its first exploration well in The
Bahamas, and (b) emerged as a full cycle exploration and production
company following its merger with Columbus Energy Resources plc
(CERP). This combination has resulted in the Company having assets
across the full maturity spectrum focused on the Caribbean and
Atlantic margin (in The Bahamas, Trinidad and Tobago, Suriname and
Uruguay). More specifically, the Company now has infrastructure-led
exploration prospects, appraisal and near-term development options,
as well as production, and therefore cash flow, along with
high-impact exploration prospects.
Outlook for the remainder of 2020 and into 2021
Across this expanded asset base, the Company is seeking to
pursue a portfolio-wide growth agenda over the coming 18 months,
based on core strategic imperatives: (a) exploration execution, (b)
profitable production growth driven by an active programme of
'self-help' initiatives and enhanced oil recovery projects, and (c)
a range of incremental appraisal/development projects. We believe
that this portfolio approach will appropriately balance risk and
reward, ensure access to capital on competitive terms, whilst
effectively leverage our Company's core expertise. Taken in
aggregate, we believe that this makes BPC more financeable, and
thus more valuable for all shareholders.
In terms of exploration execution, the Company's unshakeable
commitment is to the delivery of the Perseverance #1 well,
consistent with licence obligations and environmental approvals.
Our dedicated drilling team is now back together and remains
single-minded in its focus on this core activity. Logistics plans
have been reactivated; previously delivered critical path/long-lead
items have been inspected pending mobilisation; Covid-19 impact
mitigation plans developed and being implemented; and, any final
revisions to cost estimates are being assessed. The last quarter of
2020 will see a range of operational activities in the build-up to
drilling, culminating in a mobilisation of the rig to the field,
expected in late 2020. As announced on 25 September 2020, in
accordance with the contract with BPC, Stena Drilling has nominated
the Stena IceMax as the intended drilling rig for the Perseverance
#1 well. The Stena IceMax is one of the most technically advanced
drillships in the world, being dynamically positioned, dual masted
and with an integrated managed pressure drilling system. The
Company anticipates arrival of the vessel into the field in
December 2020.
In terms of profitable production growth, producing assets in
Trinidad and Tobago (as at when they were incorporated into the
Company consequent on the merger with CERP being completed in
August) were averaging production of between 400 to 450 barrels of
oil per day ("bopd"). The Company is targeting achieving a stable
and sustainable production level of approximately 500 bopd (net) by
the end of 2020, and programs to deliver this outcome have already
commenced. This objective is, in our view, readily achievable,
based upon further leveraging of the existing well stock by
increasing the number of wells online. This in turn is a function
of the number of workovers undertaken, and our plan is to return
the annualised rate of workovers completed to that last seen in
2018. For example, in 2018 there were 180 workovers completed on
the Goudron field, compared to 51 in 2019 and a similar amount
completed to date in 2020. With such a heightened level of activity
we will ensure that wells will remain offline for a shorter period
and combined with increased operational oversight,
enhanced data collection and improved pump and completion
designs, equipment, materials and technology, the period between
the need for workovers will be extended.
In order to extend production beyond this base target a range of
other incremental production projects exist, and similarly the
Company is already in action. These activities are designed to
enhance reservoir pressure and hence oil recovery (through water
and CO(2) injection), and raise the oil recovery factor by
improving reservoir access and connectivity (targeting bypassed
pay, undrained reservoir compartments and reducing water cuts /
sand infiltration) whilst completing well stimulations, acid washes
and deviating existing well bores. All of these projects are
targeting known reservoirs in already producing fields. It is the
depth and range of these 'self-help' initiatives that gives us the
assurance our initial targets can be met.
Beyond this, our production target builds to 2,500 bopd (net) by
the end of 2021, to be realised through further evaluating and
pursuing production from already known discoveries in both Trinidad
and Tobago and Suriname. To this end preparatory work has already
commenced on the plans for the drilling of the
appraisal/development Saffron #2 well in the South West Peninsula
(SWP) of Trinidad and Tobago, and an extended well test in the Weg
Naar Zee licence of Suriname.
To then further increase our access to prospective resources and
to pave the way for potential developments in the near future, we
are moving forward with a program to reprocess the existing 3D
seismic database over the core SWP acreage in Trinidad and Tobago,
that will underpin a refreshed assessment of the optimal
exploration targets in the region.
Given there is no consistent estimation of reserves and
resources across the Company's expanded portfolio, we have also
commissioned an independent third-party Competent Person's Report
(CPR) for the Company's various assets and licences in The Bahamas,
Trinidad and Tobago, Suriname, and Uruguay. Ongoing maturation of
resource and reserves across the portfolio is a core busines
objective, and the outcome of this report will allow the Company to
set a benchmark such that it can then objectively measure growth
over time.
The coming 18 months will continue to be a busy period for your
Company, notwithstanding the continuing impact of the Covid-19
pandemic.
H1 2020 Review
BPC entered 2020 with a single high-impact project in The
Bahamas, with a drill plan and near-term schedule focused entirely
on execution of an initial exploration well consistent with licence
obligations. In support of this drill plan BPC had established a
drilling team operating from a field office in Houston, had set up
supply contracts with Halliburton and BakerHughes, had put a clear
funding strategy in place, had entered into a conditional rig
contract, and had commenced work over the New Year period to
collect the offshore marine data that constituted an environmental
baseline survey, being the final requirement in the Company's
application for Environmental Authorisation necessary to proceed
with drilling.
Work was focused on a schedule that was targeting a spud date
for the well in March/April 2020, with a 45 - 60 day anticipated
well duration and a budgeted cost for the well in the range $30 -
35 million, including contingencies for realised rate of
penetration, additional casing strings and logging surveys. Long
lead items and critical path materials were ordered, logistics
contracts let for helicopters and supply boats. In early 2020 the
drill plan was peer reviewed by an independent expert such that
insurance could be finalised, financial capacity was enhanced
through an additional financial facility provided by a Bahamian
family office investment house and finally, after months of
diligent work with various departments of The Government of The
Bahamas and third party environmental specialists, the Ministry of
the Environment granted the requisite Environmental
Authorisation.
Following this, the Company announced the well to be drilled
would be named Perseverance #1, would be drilled on the B North
segment of the 75 km long B structure and would be targeting a
P(50) resource of 0.7 billion barrels (with an upside of 1.4
billion barrels). In the event of success, the well would
substantially de-risk the remainder of the B structure, which in
aggregate has a most likely resource level in excess of 2 billion
barrels. All was set for commencement of drilling consistent with
the planned schedule.
However, in late February and early March, as the full scale of
the Covid-19 pandemic began to unfold across the world, BPC began
to assess the potential impact the emerging pandemic might have on
continuity of operations. The key issues were to assess whether
conditions would (a) allow for uninterrupted operations for the
entire anticipated 60 days of the drilling programme, (b) introduce
risk that the potential start date of the drilling campaign would
be delayed, and therefore (c) the extent to which drilling could be
completed prior to the onset of the 2020 hurricane season in The
Bahamas.
After detailed consideration it was decided that it was not
possible to assure that these conditions could be met. As a result,
and as announced in late March 2020, the decision was taken to
delay the Perseverance #1 drilling programme until after the 2020
hurricane season (i.e. until after November 2020, being a time at
which these operational parameters could be more readily
assured).
Whilst this decision - to delay the drilling of Perseverance #1
- was a difficult one to make at the time (and frustrating, after
all the efforts and material progress made toward drilling) in
hindsight it is clear that it was the correct one. Indeed, BPC was
amongst the first oil companies anywhere in the world to suspend
operations in view of the emerging pandemic, and to focus on
formulating an appropriate response plan.
Having taken the difficult decision to delay drilling
activities, the first and most pressing objective established by
the Company in March / April 2020, as the crisis worsened across
the world, was to protect our operating capacity. Accordingly, the
drilling team was placed on temporary furlough, all delivered
materials were suitably and carefully warehoused, all
documentation, procedures and protocols filed, and a notice of
force majeure was lodged with the Government of The Bahamas. All
staff where given leave to return to the safest appropriate
location to ride out the impending quarantine and lockdown period,
which inevitably meant a considerable geographic separation of all
employees. The Company successfully reached agreement with its
various funding providers to reschedule drawdowns of funding to a
timeframe more consistent with that of the anticipated revised
drilling schedule. At the same time, the Company took all steps
reasonably available to reduce cash outgoings, and conserve
capital.
Management then set about assuring that Perseverance #1 activity
could resume at the earliest opportunity in late 2020, or as
conditions might allow. In particular, with oil prices falling and
global rig rates collapsing, the Company saw a clear market
opportunity to seek to negotiate a new and improved contract for
the required drilling rig. Ultimately, this resulted in BPC
entering into an unconditional contract with Stena Drilling (as
announced in late May) for the supply and delivery of a 6th
generation, technologically advanced, drill ship, inclusive of the
provision of a managed pressure drilling (MPD) system. The rig
contract included a very specific time window in which the rig
would be delivered into the field, being between the 15th of
December and the 1st of February - this time window being
realistically the first opportunity to commence drilling after the
abatement of the 2020 hurricane season.
Establishing this rig contract was seen by management as an
important declaratory step in assuring staff, shareholders,
suppliers, and Government alike that the well would be commenced
within as reasonable a timeframe as practicable, whilst remaining
entirely consistent with licence obligations. At the same time,
industry conditions meant that BPC was able to secure a reduced rig
rate such that the anticipated cost of the well program was reduced
by approximately 15% compared to the original well cost estimate -
a material overall cost reduction.
In aggregate, therefore, by the end of May 2020 BPC was
effectively in a state of "hiatus", but in which we had secured
considerable confidence in our ability to ride out the Covid-19
"storm": a rig contract for later in 2020 was in place, service
contracts deferred, equipment warehoused, undrawn funding
facilities preserved and rescheduled, the timing of the licence
commitment rescheduled owing to force majeure, cash being
conserved, and so on.
In parallel, as we witnessed the operating and economic fallout
of the spread of Covid-19 and response measures across the world,
we concluded that the resulting structural changes to our industry
were going to be both profound and long-term. Most significantly,
we came to the view that smaller companies with a focus on a single
(albeit potentially high-impact) exploration project, and without
cashflow to support those activities or a wider asset base to
balance risk, were going to find it increasingly more difficult to
secure ongoing access to the competitive finance needed to survive
and grow. Accordingly, management began working in earnest on a
number of projects designed to address these issues, with a view to
better assuring the future value, growth and viability of the
Company.
It was in this context that BPC successfully sought to qualify
as an international operator in order to participate in the then
ongoing open licencing round in Uruguay. At a time when most others
in the industry had frozen all outward-looking activity, management
saw a (relatively uncontested) opportunity for a low-cost
acquisition of highly prospective acreage, that demonstrated
exploration potential similar in style, if not industry maturity,
to the recent extensive discoveries in offshore Guyana and
Suriname. We submitted a bid to the Uruguayan authorities that
included a modest work programme and licence terms over a 4 year
period, without a commitment to drilling in this period, and were
the successful applicant for the near-offshore OFF-1 licence block
(as announced in June 2020) - approximately 15,000 km(2) with
potential to contain in excess of 1 billion barrels of
resource.
Shortly thereafter, BPC announced a proposal to merge with
Columbus Energy Resources plc ("CERP"), with a view to combining
BPC's large exploration assets in The Bahamas and now Uruguay with
CERP's portfolio of assets in Trinidad and Tobago and Suriname.
These assets importantly included existing production from multiple
fields, and, through the course of negotiations and due diligence,
BPC identified a number of near-term opportunities to stabilise and
then profitably grow that production, multiple near-term
opportunities to rapidly appraise and bring into development
already existing discoveries as well as a range of established
exploration prospects. The merger with CERP was ultimately approved
by both BPC and CERP shareholders, and took effect in August
2020.
Consequently, as at the date of these Interim Results, BPC is a
company very different than at the start of 2020, with an asset
portfolio representing interests across the full range of the
industry life cycle: exploration, appraisal, development and
production.
Financials Review
As the merger with CERP did not complete until after the
reporting date, these interim financial statements do not reflect
the expanded operations and asset base of the now enlarged Group,
and therefore are not reflective of our broader vision going
forward. A fully consolidated financial report for the enlarged
Group will be provided in the next Annual Report, which will be
prepared to 31 December 2020 and released in the first half of
2021.
The Group finished the reporting period with a robust cash
position of over $12m, almost $1m more that it started with in
January - ongoing expenditure against well preparations and
corporate costs were more than offset by additional capital secured
through the unconditional convertible loan note facility entered
into with a Bahamian family office in February 2020, coupled with a
strict approach to cash management implemented in the face of the
unfolding Covid-19 pandemic.
Employee benefit expense for the period totalling approximately
$0.7m is comparable with those incurred in both the comparative 6
month period and the full year to December 2019 on an annualised
basis, notwithstanding the significant increase in the level of
activity over the period.
Other expenses for the 6 months to June 2020 totalled $1.3m,
which represents both a 93% increase on the same 6 months period in
2019 and an approximate 8% decrease on the full year 2019 when
considered on an annualised basis. This seemingly paradoxical trend
should be understood in the context of how activity has grown
within the Group over the last 18 months, with a heavily
constrained cost footprint at the start of 2019 growing steadily
throughout the course of 2019 as preparations for the execution of
Perseverance #1 in April 2020 ramped up. In this context then, the
first half of 2020 has been a period of much greater activity than
the same period in 2019, and whilst the cash preservation actions
taken post the pandemic outbreak has acted to constrain this upward
trend since March, the accrual of substantial merger transaction
costs at the reporting date has offset this effect, albeit with H1
2020 still being below the annualised 2019 level for other
expenses.
Overall then, the total loss for the period of $2.2m represents
a commensurate increase on H1 2019 given the increase in activity,
whilst still representing an approximate 5% reduction on the
annualised figures for the full year to December 2019, due to the
measures taken post the outbreak of the Covid-19 pandemic.
Looking forward for the now enlarged Group, as production
increases through 2021 we would expect to see cashflows increasing
accordingly, with the Company seeking to be in a position, by end
of 2021, to be generating sufficient cash flows to cover all
overhead and operating expenses for the entire business, and
potentially making a considerable contribution to ongoing capital
and exploration expenditures.
Summary
Thus far, 2020 has thus far been a year of unprecedented change,
which has presented both enormous operational challenges as well as
opportunities for positive corporate transformation.
On behalf of the Board and staff of BPC, I would like to thank
all our shareholders for their continued support of the Company. I
also take this opportunity to welcome new shareholders to BPC
introduced as a result of merger with CERP.
The coming period has the potential to be a company-making time
for BPC - not merely as a result of a drilling outcome on our
project in The Bahamas, but also as a result of the progress we are
able to make across the broad portfolio of assets that now
represents a full-cycle E&P business.
I therefore look forward to providing further updates as we
continue on our journey toward the drilling of Perseverance #1, and
as we seek to expand profitable production activities and generate
positive free cashflow from across the broader portfolio.
Yours sincerely,
Simon Potter
Chief Executive Officer
28 September 2020
Consolidated statement of comprehensive income
for the six months ended 30 June 2020
Note Six months Six months Year ended
ended ended 30 June 31 December
30 June
2020 2019 2019
(Unaudited) (Unaudited) (Audited)
$ $ $
Continuing operations:
Employee benefit
expense (689,806) (674,234) (1,432,256)
Depreciation expense (125,990) (119,203) (238,326)
Other expenses (1,337,045) (692,801) (2,932,830)
Operating loss (2,152,841) (1,486,238) (4,603,412)
Other income 147 - 1,268
Finance income 44,429 13,701 39,411
Finance costs 2 (86,466) (13,376) (68,941)
Total comprehensive
loss for the period,
net of tax (2,194,731) (1,485,913) (4,631,674)
------------ ------------ ------------
Basic and diluted loss
per share (cents per
share) (0.10) (0.09) (0.27)
------- ------- -------
Consolidated statement of changes in equity
for the six months ended 30 June 2020
Share
Share Reverse based
Share premium Merger acquisition payment Retained Total
capital reserve reserve reserve reserve earnings equity
$ $ $ $ $ $ $
At 1 January
2020 60,638 96,157,034 77,130,684 (53,846,526) 4,867,967 (63,691,770) 60,678,027
Comprehensive
income
Loss for
the period - - - - - (2,194,731) (2,194,731)
--------- ------------ ----------- ------------- ---------- ------------- ------------
Total comprehensive
income for
the period - - - - - (2,194,731) (2,194,731)
--------- ------------ ----------- ------------- ---------- ------------- ------------
Transactions
with owners
Issue of
ordinary
shares 8,716 5,593,579 - - - - 5,602,295
Share options
- value of
services - - - - 66,422 - 66,422
--------- ------------ ----------- ------------- ---------- ------------- ------------
Total transactions
with owners 8,716 5,593,579 - - 66,422 - 5,668,717
Balance at
30 June 2020 69,354 101,750,613 77,130,684 (53,846,526) 4,934,389 (65,886,501) 64,152,013
--------- ------------ ----------- ------------- ---------- ------------- ------------
Consolidated statement of changes in equity
for the six months ended 30 June 2019
Share
Share Reverse based
Share premium Merger acquisition payment Retained Total
capital reserve reserve reserve reserve earnings equity
$ $ $ $ $ $ $
At 1 January
2019 46,138 83,068,307 77,130,684 (53,846,526) 3,819,843 (59,060,096) 51,158,350
Comprehensive
income
Loss for
the period - - - - - (1,485,913) (1,485,913)
--------- ----------- ----------- ------------- ---------- ------------- ------------
Total comprehensive
income for
the period - - - - - (1,485,913) (1,485,913)
--------- ----------- ----------- ------------- ---------- ------------- ------------
Transactions
with owners
Issue of
ordinary
shares 3,156 2,355,989 - - - - 2,359,145
Share options
- value of
services - - - - 76,441 - 76,441
--------- ----------- ----------- ------------- ---------- ------------- ------------
Total transactions
with owners 3,156 2,355,989 - - 76,441 - 2,435,586
Balance at
30 June 2019 49,294 85,424,296 77,130,684 (53,846,526) 3,896,284 (60,546,009) 52,108,023
--------- ----------- ----------- ------------- ---------- ------------- ------------
Consolidated statement of changes in equity
for the year ended 31 December 2019
Share
Share Reverse based
Share premium Merger acquisition payment Retained Total
capital reserve reserve reserve reserve earnings equity
$ $ $ $ $ $ $
At 1 January
2019 46,138 83,068,307 77,130,684 (53,846,526) 3,819,843 (59,060,096) 51,158,350
Comprehensive
income
Loss for the
year - - - - - (4,631,674) (4,631,674)
--------- ----------- ------------- ------------- ------------ --------------- -------------
Total
comprehensive
income for
the year - - - - - (4,631,674) (4,631,674)
Transactions
with owners
Issue of
ordinary
shares 14,500 13,088,727 - - - - 13,103,227
Share options
- value of
services - - - - 1,048,124 - 1,048,124
Total
transactions
with owners 14,500 13,088,727 - - 1,048,124 - 14,151,351
--------- ----------- ------------- ------------- ------------ --------------- -------------
Balance at
31 December
2019 60,638 96,157,034 77,130,684 (53,846,526) 4,867,967 (63,691,770) 60,678,027
--------- ----------- ------------- ------------- ------------ --------------- -------------
Consolidated balance sheet
at 30 June 2020
30 June 30 June 31 December
2020 2019 2019
(Unaudited) (Unaudited) (Audited)
Assets Note $ $ $
Non-current assets
Intangible exploration
and evaluation assets 1 54,462,600 48,603,562 50,569,263
Property, plant and
equipment 61,997 35,571 30,977
Right of use asset 83,480 276,210 198,335
------------- ------------- ------------
54,608,077 48,915,343 50,798,575
Current assets
Other receivables 817,549 723,029 858,344
Cash and cash equivalents 12,065,104 3,177,600 11,151,614
Restricted cash 54,793 25,533 26,363
------------- ------------- ------------
12,937,446 3,926,162 12,036,321
------------- ------------- ------------
Total assets 67,545,523 52,841,505 62,834,896
------------- ------------- ------------
Liabilities
Non-current liabilities
Lease liabilities 24,607 63,719 44,143
------------- ------------- ------------
Total non-current liabilities 24,607 63,719 44,143
Current liabilities
Trade and other payables 3,304,218 451,943 1,951,465
Lease liability 64,685 217,820 161,261
------------- ------------- ------------
Total current liabilities 3,368,903 669,763 2,112,726
------------- ------------- ------------
Total liabilities 3,393,510 733,482 2,156,869
------------- ------------- ------------
Equity
Ordinary shares 69,354 49,294 60,638
Share premium reserve 101,750,613 85,424,296 96,157,034
Merger reserve 77,130,684 77,130,684 77,130,684
Reverse acquisition
reserve (53,846,526) (53,846,526) (53,846,526)
Share-based payments
reserve 4,934,389 3,896,283 4,867,967
Retained earnings (65,886,501) (60,546,008) (63,691,770)
------------- ------------- -------------
Total equity 64,152,013 52,108,023 60,678,027
------------- ------------- -------------
Total equity and liabilities 67,545,523 52,841,505 62,834,896
============= ============= =============
These unaudited interim financial statements were approved by
the Directors and authorised for issue on 28 September 2020.
Simon Potter, Chief Executive Bill Schrader, Director
Officer
Consolidated cash flow statement
for the six months ended 30 June 2020
Note 30 June 30 June 31 December
2020 2019 2019
(Unaudited) (Unaudited) (Audited)
$ $ $
Cash flows from operating activities
Payments to suppliers and employees (1,394,889) (1,232,688) (3,017,195)
Net cash used in operating activities (1,394,889) (1,232,688) (3,017,195)
-------------- ------------- ------------
Cash flows from investing activities
Purchase of property, plant and
equipment (41,164) (2,975) (7,438)
Proceeds from disposal of property,
plant and equipment - 1,000 999
Payments for exploration and
evaluation assets (3,078,979) (88,362) (985,427)
Increase in restricted cash (30,000) - (52)
Other income 147 - 1,268
Interest received 44,429 13,701 39,411
Net cash generated by/(used in)
investing
activities (3,105,567) (76,636) (951,239)
-------------- ------------- ------------
Cash flows from financing activities
Proceeds from issuance of ordinary
shares 5,602,294 2,359,144 13,103,227
Principal elements of lease payments (116,111) (103,258) (211,582)
Interest payable on lease liabilities (8,936) (13,376) (23,537)
-------------- ------------- ------------
Net cash flows from financing
activities 5,477,247 2,242,510 12,868,108
-------------- ------------- ------------
Net decrease in cash and cash
equivalents 976,791 933,186 8,899,674
-------------- ------------- ------------
Cash and cash equivalents at
the beginning of the period 11,151,614 2,220,765 2,220,765
Effects of exchange rate changes
on cash and cash equivalents (63,301) 23,649 31,175
-------------- ------------- ------------
Cash and cash equivalents at
the end of the period 12,065,104 3,177,600 11,151,614
-------------- ------------- ------------
1. Basis of preparation
The unaudited consolidated interim financial information has
been prepared using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively "EU IFRSs"). The principal accounting
policies used in preparing the interim results are unchanged from
those disclosed in the Company's financial statements for the year
ended 31 December 2019. It is not expected that there will be any
changes or additions to these in the annual financial statements
for the year ended 31 December 2020.
While the financial information included in this interim
consolidated financial information has been prepared in accordance
with the recognition and measurement criteria of EU IFRSs, this
consolidated interim financial information does not itself contain
sufficient information to comply fully with EU IFRSs.
The interim financial information for the six months ended 30
June 2020 and 30 June 2019 is unaudited and does not constitute the
Company's statutory financial statements for those periods. The
comparative financial information for the full year ended 31
December 2019 has, however, been derived from the Company's
statutory financial statements for that period. The auditor's
report on those statutory financial statements was unqualified.
In the opinion of the directors, the accompanying interim
financial information includes all adjustments considered necessary
for fair and consistent presentation of the interim financial
statements. The interim financial statements have been prepared on
the going concern basis, assuming that the Group will realise its
assets and extinguish its liabilities in the normal course of
business at the amounts recognised within the interim financial
statements.
Carrying Value of Intangible Exploration and Evaluation
Assets
Expenditure of $54,462,600 relating to the cost of exploration
licences, geological and geophysical consultancy and seismic data
acquisition and interpretation has been capitalised as at 30 June
2020 (30 June 2019: $48,603,562) (31 December 2019:
$50,569,263).
Ultimate recoupment of exploration and evaluation assets
capitalised is dependent on successful development and commercial
exploitation, or alternatively, sale of the respective licence
areas. The carrying value of the Group's exploration and evaluation
expenditure is reviewed at each balance sheet date and, if there is
any indication that it is impaired, its recoverable amount is
estimated. Estimates of impairment are limited to an assessment by
the Directors of any events or changes in circumstances that would
indicate that the carrying value of the asset may not be fully
recoverable. Any impairment loss arising is charged to the
statement of comprehensive income.
On 21 February 2019, the Group received notification from the
Bahamian Government of the extension of the term of its four
southern licences to 31 December 2020, with the requirement that
the Company commence an exploration well before the end of the
extended term.
On 27 February 2020, the Government of The Bahamas granted the
Company its Environmental Authorisation (EA) for the Perseverance
#1 well. The granting of the EA represents the final regulatory
prerequisite now in place for the Company to proceed with
commencement of drilling activity and follows a considerable body
of work that had taken place over several years and involving a
number of external consultants and advisors to both the Company and
the Government.
On 23 March 2020 the Group notified the Government of The
Bahamas that, due to the impacts of the global response to the
Covid-19 pandemic, it is claiming force majeure under the terms of
its exploration licences, such that the term of the licences shall
be extended beyond 31 December 2020 commensurate with the as yet
unknown duration of the force majeure event.
On 13 August the Company announced that it had received formal
notification from the Government of The Bahamas that on an interim
basis, a 3.5 months force majeure extension to the second
exploration period of the Company's southern licences in The
Bahamas had been granted, such that the current term of those
licences will now extend to at least mid-April 2021, and by which
time BPC must have commenced well activities. Given that the
relevant force majeure event is presently continuing (namely, the
impact of the Covid-19 pandemic currently ongoing in both The
Bahamas and in relevant international jurisdictions), BPC remains
in constructive dialogue with The Government as to the ultimate
full extent of the force majeure extension. However, the interim
extension to mid-April 2021, as now confirmed, is sufficient to
provide certainty for the purposes of the drilling of Perseverance
#1, which is scheduled to commence in the window of 15 December
2020
to 1 February 2021.
In performing an assessment of the carrying value of the
exploration and evaluation assets at the reporting date, the
Directors concluded that it was not appropriate to book an
impairment given the remaining term of the licences, geological
probability of success of the structures and the continued plans to
explore and develop the block.
Renewal of the Miami licence remains under review as at the
balance sheet date.
2. Finance costs
Included in Finance costs is non-cash amounts totalling $77,530
(period to 30 June 2019: nil) (year to 31 December 2019: nil)
charged to Comprehensive Income arising from the imputed interest
over the period on the recognition of convertible loan notes drawn
and fully converted into ordinary shares prior to the reporting
date, as required under the provisions of IAS 32, Financial
Instruments: Presentation and IFRS 9, Financial Instruments.
Other Finance costs arise from imputed interest charges on lease
liabilities under the provisions of IFRS 16, Leases.
3. Events after the balance sheet date
On 7 August 2020, the Company completed a merger with Columbus
Energy Resources Plc ("CERP"), effected by means of a Court
sanctioned scheme of arrangement under Part 26 of the UK Companies
Act 2006 (the "Scheme").
Pursuant to the Scheme, a total of 757,261,511 new BPC ordinary
shares were issued and allotted to holders of CERP shares,
5,160,305 new BPC ordinary shares were issued to CERP's management
pursuant to their respective settlement and termination
arrangements and 106,466,976 new BPC shares were issued and
allotted to Trafalgar Capital Management (HK) Limited pursuant to a
replacement funding agreement, the proceeds of which were for use
in settling the Lind Convertible Loan Agreement entered into prior
to the merger with CERP. Consequently, a total of 868,888,792 new
BPC ordinary shares were issued and allotted pursuant to the
Scheme.
On 17 August 2020, the Company issued additional new ordinary
shares and options over ordinary shares ("options") as follows:
- 21,325,966 Ordinary Shares to the former executives of CERP,
- 34,216,815 Ordinary Shares to various Company advisors for
their services in in connection with the merger with CERP,
- 17,029,394 Options to the former executives of Columbus with
an exercise price of 0.002 pence per share and exercise period
ranging from 4 to 7 years,
- 8,700,000 Options to new employees of the enlarged BPC group
out of the Series C pool of options approved by the Company
shareholders at the 2019 Annual General Meeting ("AGM"), with an
exercise price of 2.8 pence per share, exercise period of 5 years
and becoming exercisable once the Company's drilling of initial
exploration well commences (defined as once a rig is mobilised,
that being when the contracted drilling rig, following inspection
by BPC and any necessary customs authorisations, leaves the port of
origination by a distance of 1 nautical mile) .
On 24 August, the Company appointed Mr Leo Koot to the Board of
directors as a non-executive director and as a sitting member of
the Board's HSE Committee and Audit Committee.
On 17 September 2020, 6,170,982 options granted to a former
executive of CERP with an exercise price of 0.002 pence per share
were exercised, resulting in the issuance of 6,170,982 new ordinary
shares in the Company.
On 25 September 2020 the Company announced that, in accordance
with the rig contract entered into in May 2020, Stena Drilling had
nominated the Stena IceMax as the intended drilling rig for the
Perseverance #1 well, one of the most advanced drillships in the
world with dynamic positioning, managed pressure drilling and dual
masted. The Company anticipates arrival of the rig in December
2020.
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IR FZGZLRNVGGZM
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