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MITIGATING RISKS: READY FOR THE DRILL BIT
SIMON POTTERCHIEF EXECUTIVE OFFICEROctober 2012
Disclaimer
This presentation (“Presentation”) has been prepared by Bahamas Petroleum Company plc (the“Company”) solely for its use at informational meetings with its shareholders and is being delivered forinformation purposes only to a limited number of persons. This Presentation should not be consideredas the giving of investment advice by the Company or any of its shareholders, officers or advisers. Ifyou are in any doubt about the contents of this Presentation or the action you should take, you shouldconsult an independent adviser authorised to render such advice.
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Investment Highlights
Multiple play-types with scale potential – proven Cuba fold belt/thrust sheet plays – drilling now
CPR highlights multiple billion barrel prospects (only Cretaceous level assessed) average CoS 25%
Fiscal terms provide upside returns – management team with strong track record of value creation
Value realisation by material participation through funded well execution
Technical
3D interpretation;
DHI work ongoing
Well Plan drafted
Political
Election Process; revised/refreshed mandate
Licence status
Referendum
Commercial
Well funded
BDR Listing
Aggressively pursuing farmout plans
Negotiations ongoing
Environmental
EIA submitted; Public Consultation
Oil Spill Management Plan; EMP
Revised regulatory environment
Late Cretaceous and Early Tertiary Compression
Middle Oligocene to Miocene (25‐22Myrs)
Cuban Marginal area Southern Bahamas areaCuban arc
Late Cretaceous Paleocene?
Proto‐Caribbean oceanic crust
Forbulge
Regional uplift Platform exposure
Transitional to continental crust
Paleocene Early Eocene?
Forbulge
Flexural drowning
Bahamas
Platform folding
North Cuba
Early Eocene Middle Eocene?
Middle Eocene Pliocene‐PleistoceneMasaferro (1997)
Late Cret.‐ Paleocene(70‐50Myrs)
Early to Middle Eocene (45‐40Myrs)
Middle Eocene to Late Oligocene (40‐30Myrs)
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Anticipated BPC well location Doubloon Saxon location (approx) Zarubezhneft November spud
Repsol P&A Petronas P&A PDVSA currently drilling✜ Anticipated well locations
✜✜
✜
Regional Setting
• Region has discovered nearly 100 billion bbloil and 500 tcf gas
• Nearly 4mm acres under license equivalent to 672 OCS lease blocks
• Geology considerably different than U.S. Gulf of Mexico
• 5 wells in Bahamas ‐ 1987 Doubloon Saxon
4
DS 1
5
Cuban Overthrust and Foredeep
6
➜ Cretaceous reef/platform imaging is significantly improved. Better imaging of the deeper section
➜ Pronounced dip to the south-west; thicker Jurassic (source); opens migration pathway to beneath Cuban ramp; increased potential fetch area
➜ Records the evolution from hypersaline basin to platform basin morphology
Platform Margin Bahamian Foreland
Cuban Border Nassau Trend A Fold B Fold C
Top Cretaceous Structure
7
8
10 Kms
Fold B
Fold C
Trend A
Top Cretaceous Structure
TopVertical closure
Area
Fold B700m750m423 km2
(104,526 acres)
Fold C950m350m63 km2
(15,814 acres)
TopVertical closure
Area
9
Fold B
Fold C
Trend A
Top Albian Structure
10 Kms
10
10 Kms
Fold B
Fold C
Trend A
Top Aptian Structure
TopVertical closure
Area
Fold B2400m1400m288 km2
(71,166 acres)
Fold C3250m750m63 km2
(15,814 acres)
TopVertical closure
Area
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Progressive 3D De-risking
Fractured carbonate
Anhydrite
Shale
More porous carbonate
Less porous carbonate
Badhole
LKUJr Anhydrite ‐Dolomite
LK/Ujr Anhydrite?
NE
Callovian
Tertiary Pelagics
Upper Cretateous Pelagics
Est 22,500 sstvd
12
SW
3D line Through Fold B - Perseverance 1 Location
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Perseverance - 1
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Environmental Context
Provision of Regulations Cross border co-operation and coordination Public consultation Coordinated response
EIA
Submitted October
BEST dialogue complete January
Public consultation
EMP
OSMP
Well location and rig specific
Cuba
CCA
Regulations
Statute
Law
Enabling Regulations
International Standards and Codes
% of oil released making shoreline, remainder either evaporated or biodegraded2,556 individual spills lasting 60 days tracked for 90 days; no intervention
Environment: Oil Spill Movement Simulation
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Location Surface15 mbopd
Seabed10 mbopd
Seabed20 mbopd
Eastern US 0.05 0.03 0.02
Southeast Florida
0.09 0.04 0.03
Florida Keys 0.04 0.02 0.01
Western Bahamas
0.07 0.14 0.29
Eastern Bahamas
0.16 0.12 0.11
Northern Cuba 46.44 34.98 27.26
Bahamian MPA’s 0.00 0.00 0.00
Total 46.9 35.3 27.7
• simulated release site
Sophisticated model incorporating ocean currents, wind and oil properties An uncontained, GoM-type spill – very minor landfall impact on Bahamas Trans border planning and response will be important
Ocean State Bathymetry
Bahamas Royalty Income
Phased Development - 2 billion barrels of oil - conceptual
Year
$MM
Annual Production Company Challenges: Subsea development with FPSO Environmental aspects Limited reservoir specific information Geologic complexity/oil quality
Government Challenges: Converting resource use into sustainable
economic development
Benefits to The Bahamas:
Long term direct source of revenue
Enhanced indirect revenue
Potential for direct and indirect employment
Diversification/Rebasing of the economy
Social development
16
256
220
182
146
120
72
36Mill
ions
bbl
s/yr
Annual
Cumulative
1 2 3 4 5 6 7 8 9 10
Assumed:• $100/bbl oil price• 2 bn bbls development• Initial well rates, acre
spacing, vertical trajectory, recovery, oil type and quality
• Licence royalty (~25%)• Undiscounted
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Commercial Issues - 2012 Funding
Current sources US$m
Cash as at 1/1/12 35.0
Cash Raise -
TOTAL SOURCES 1 35.01 Additional sources expected from farm in
Sources Uses (Estimated – calendar year 2012)
Operating expenditures US$m
2D Seismic 1.5
3D Seismic Processing 6.5
Other Technical Projects 1.0
Technical staffing/Consulting 1 0.5
Licence Related Costs 1.3
2012 Non-recurring costs 2 0.5
Sub-Total 11.3
Corporate Costs 2012 5.0
TOTAL USES 16.3
1 Including preparation for drilling2 Personnel, BISX Listing and Legal costs
Note: BPC is debt free
˃ Farm-in negotiations ongoing
˃ Drilling program to be funded from new sources (Farm-in vs Placing)
˃ Resultant net cash balance end 2012 assuming estimated uses ~US$19 million before any new sources
˃ BDR Listing BISX 4Q 2012
˃ Referendum Process and Timing
Timeline: Company Planning
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4Q133Q132Q131Q134Q123Q121Q124Q113Q11 2Q12 3 Years
Corporate Objectives• A well safely executed to 2,000’ into Jurassic source• Shallower objectives as justified commercially• Facilitate the drilling of a well• Address funding, environment and permissions• Delay not in the interests of shareholders but realisable
SEISMIC
2Q11
ENVIRONMENT
DRILLING
2D
3D
EMP
Well FEED
Long Lead
Farm-in BDR COMMERCIAL
Acquired Fast track Interpretation
Potential well sites 3D PSDM Interpretation
Sites Defined
Farm-in
Consultation
Consultation?
Spill Study
Multi-beam
Renewal Licence Obligation
Submitted
Clean Caribbean & Americas
Spill Plan
Potential well sites
Enabling Regulations ?
EIA
Repsol
Zarubezhneft
Petronas PDVSA? ONGC?CubanDrilling
Repsol??
Long Lead
Referendum disclosed
Detailed well design