Bahamas Petroleum (LSE:BPC) dived 65pc in midday trading to 2.2p after announcing that the exclusivity agreement it signed with an unnamed major international oil company will not be extended. The business, which holds prospective resources across licences in the Bahamas, said the oil major will not extend the ‘exclusive nature of negotiations’ beyond the end of this month.
As a result, it has begun broader, asset-based discussion with third parties in addition to non-asset-based financing discussion already ongoing for the funding of its first exploration well. To date, the firm has received $1m in exclusivity payments. However, it said that it will not receive any additional cash now that exclusivity will not be extended.
Bahamas Petroleum has 100% owned offshore licences exclusively focused on the Bahamas. It says it has significant prospective resources, which have been de-risked through both extensive 2D and 3D seismic. On today’s new, chief executive Simon Potter said:
‘Appetite for “frontier” exploration has improved as the industry cycle has turned and the Company continues to move forward with farm-out and financing options, working closely with our adviser Macquarie. The company with which we have been in exclusive negotiations has elected not to extend further the period of exclusivity, which means we will receive no further exclusivity payments. At the same time, having demonstrated interest from an international oil major, we are now able to freely re-engage in discussions with all other parties, which had previously been put in abeyance.
‘Following receipt of $1m in exclusivity payments under the Agreement and the raising of additional finance through the placing of shares in May 2018 the Company remains adequately funded to continue developing well financing options through to completion. We will provide the market with further updates when appropriate.’