Caribbean oil explorer acreage has enormous upside potential
Is The Bahamas still looking for a referendum on the exploration for oil in our country?
According to a Freeport News source, this referendum will not come and very soon the BISX listing will be made.
However, the agreement being made by the government and the Bahamas Petroleum?Company has not been revealed, nor has it been said if environmental safety protocol have been agreed upon, revealed Canaccord Brokers.
Caribbean oil explorer acreage has enormous upside potential, said a recent press release.
It noted that The Bahamas has a 100 percent interest in five large exploration licences covering almost 16,000 sq km - the equivalent to 80 UK North Sea blocks.
Canaccord says four of these blocks lie just to the north of Cuba and on trend with offshore Cuban acreage licensed by Repsol, Statoil, ONGC, Petronas and others, where a planned six-well program is underway and looks set to raise the profile of the whole region.
A Competent Person's Report (CPR) from The Bahamas said that last year in its acreage indicated a best-case basis unrisked prospective recoverable resource of 2.2 billion barrels in three structures, the release continued.
The report indicated the geological chance of success for the individual structures varied from 11 percent to 30 percent, which Canaccord said was relatively high for wildcat exploration territory.
The area has seen little drilling so far, the release added, but previous wells have revealed an abundance of carbonate reservoir and there have been hydrocarbon shows in a number of wells - in particular the Doubloon Saxon-1, which lies within BPC's licence area.
Canaccord said, BPC will be unable to drill without either a farm-in partner or additional financing or perhaps both and its expect a farm-out process to be a priority for it for the rest of 2012.
Taking a limited view of the BPC prospects, risking them heavily and assuming a substantial farm-out, the broker has calculated a target price of 23 pence per share.
"We see multiple medium-term share price catalysts in the lead up to the first exploration well, which the licence terms require to be spud in the second quarter of 2013."
According to Canaccord, these include positive progress on the environmental issues in this sensitive region; potential farm-out activity and news from the drilling program currently underway in the neighbouring Cuban acreage.
The release said that speculative buy is the broker's rating on the shares, which rose six percent to 7.54 pence on Wednesday.
© 2012 The Freeport News