The well, Perseverance #1, was completed in early 2021 notwithstanding considerable challenges – including a year’s delay and significant disruption caused by the Covid-19 pandemic, a collapse in oil prices, and a last-minute legal action by environmental activists seeking to halt drilling which was successfully defended by the Company. The well was drilled safely and without an environmental or safety incident, and whilst the well-encountered oil, indicated from LWD (Logging While Drilling) tools, and corroborated by gas chromatography and mud logs, it did not result in a commercial discovery.
The Company is, however, encouraged that the data from the Perseverance #1 well successfully validated the structural model, a competent seal, good reservoir quality, charge, and established a working petroleum system which collectively supports the view that other closures, structures and both shallower stratigraphic and deeper structural plays in the Company’s Bahamian licence areas continue to provide significant commercial prospectivity, and with multiple viable drillable prospects of scale which merit additional study and exploration activity.
Given these technical results, since announcing the results of the well the Company has had a number of discussions with industry counterparties in relation to a potential farm-out of the licences, and the Company has formally launched an entirely new farm-out process via Gneiss Energy. The farm-out is seeking to introduce funding and operating partner for the next stage of exploration activity in The Bahamas.
Concurrent with the farm-out process, the Company will seek to retain its 100% interest in the Southern Licences by extending the licences in to the third exploration period whilst formalising the relinquishment of the Miami licence. The third exploration period for the Southern Licences will last for three years and will require further exploration wells to be drilled before the period expires, failing which the licences would be forfeited (i.e., “drill or drop”). An extension of the licences will attract an annual licence fee and requires a relinquishment of 50% of the licence area. Notification of renewal of the licences has been submitted to the appropriate Ministry, and the area to be relinquished has been identified as being the area equivalent to that over the shallower water depths covered by the Southern Licences (less than circa 200 feet).