BPC November.december SCP 28-11 Final

8/2/2019 BPC November.december SCP 28-11 Final

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REDUCING RISK:

READY FOR THEDRILL BIT

Investor Presentation

November 2011(AIM: BPC)

Email: [email protected]: www.bpcplc.com

3D Seismic Acquisition 2011
mailto:[email protected]://www.bpcplc.com/http://www.bpcplc.com/mailto:[email protected]


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Important Notice DisclaimerThis 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 considered as the giving of investment advice by the Company or any of its shareholders, officers or advisers.If you are in any doubt about the contents of this Presentation or the action you should take, you should consult an independent adviser authorised to render such advice.

This Presentation has not been independently verified and is subject to material updating, revision and further amendments without notice. The Presentation does not purport to contain all informationthat a member of the Company may wish receive for purposes of assessment or valuation of his respective investment and is not intended to form the basis of any investment decision.

While the information contained herein has been prepared in good faith, neither the Company nor its shareholders, directors, officers, agents, employees, or advisors give, has given or has authority togive, any representations or warranties (express or implied) as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns contained in this

presentation, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be madeavailable to any shareholder of the Company (all such information being referred to as Information).

The Presentation is not an offer or invitation by the Company, its shareholders, directors, officers, agents, employees, or advisors to purchase, acquire or sell securities or assets, nor any form ofcommitment, legal obligation or recommendation by either the Company, its shareholders, directors, officers, agents, employees, or advisors.

So far as permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers (including the Agents) take any responsibility for, or will accept anyliability in respect of, the accuracy, reliability or completeness of the Information or for any loss, howsoever arising from the use of this Presentation. In furnishing this Presentation, the Company doesnot undertake any obligation to provide any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.

The Information is confidential information and the property of the Company. It is made available strictly for the purposes referred to above. The Information and any further confidential informationmade available to any recipient must be held in complete confidence and documents containing such information may not be reproduced directly or indirectly, used or disclosed without the priorwritten consent of the Company. By accepting delivery of this Presentation, the recipient agrees to return it at the request of the Company.

This presentation contains certain statements which may constitute "forward-looking statements". All statements in this presentation, other than statements of historical facts, that address futureactivities and events of developments that the Company expects, are forward-looking statements. Although the Company believes that the expectations reflected in these statements are based onreasonable assumptions, such statements are only predictions and are subject to inherent risks and uncertainties and changes in the underlying assumptions which could cause actual values, results,performance or achievements to differ materially from those expressed, implied or projected in any forward-looking statements. Factors that could cause actual results to differ materially from those inforward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any suchstatements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward-looking statements.

The Company will not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date ofthis Presentation, except as required by law or by any appropriate regulatory authority. Nothing in this Presentation or in documents referred to in it should be considered as a profit forecast. Pastperformance of the Company or its shares cannot be relied on as a guide to future performance.

This Presentation does not constitute, or form part of or contain any offer or invitation to sell or issue, or any offer to subscribe for, underwrite or otherwise acquire, or dispose of, any securities in theCompany in any jurisdiction and is directed at, and is only for distribution to existing shareholders of the Company. Neither this Presentation nor any part of or copy of it may be taken or transmitted,

directly or indirectly, into the United States of America or Canada or distributed or re-distributed directly or indirectly, in the United States of America, its territories or possessions, or Canada, or toany resident thereof except in compliance with applicable securities laws. Any failure to comply with these restrictions may constitute a violation of applicable U.S. or Canadian securities laws. ThisPresentation and the information contained herein do not constitute an offer of securities for sale in the United States. By accepting this Presentation, the recipient represents and warrants that it is aperson to whom this Presentation may be delivered or distributed without a violation of the laws of any relevant jurisdiction. This Presentation is not to be disclosed to any other person or used for anyother purpose and any other person who receives this Presentation should not rely or act upon it.

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By attending the meeting where this Presentation is made, or by reading the Presentation slides, you agree to be bound by these provisions.

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1. Investment Highlights

2. Strategy

3. Leadership Team

4. Asset Base

5. Key Risks Addressed

6. Valuation

7. Capital Structure

8. Competitive Landscape

9. Summary

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BAHAMAS PETROLEUM COMPANY Plc.

North Sea Comparison


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Investment Highlights

Unique portfolio of licences; play-type range, untested scale, commercial terms thus upside

Extension of proven Cuba fold belt/thrust sheet plays. Greater Gulf of Mexico analogues

Experienced leadership team with strong track record of value creation

Executive team with focus on commercialisation of new hydrocarbon provinces

Progressive and significant de-risking of the asset base over last 4 years

Successful 2D and 3D acquisition confirms large structures; 3D to specify drillable locations

Additional licence applications submitted Third-party verification of scale and quality of asset base Ryder Scott CPR, Statoil farm-in

Immediate next stage well work programme (2012/3) to crystalise value

Scale, risk, reward and location attractive to Majors, NOCs and large state enterprises

Aggressively pursuing farm out plans and working closely with Bahamas Government ahead ofdrilling

Fully funded into the next stage of de-risking

Momentum stock

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Strategy - Regional Context

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Region has discovered nearly 100Billion bbl oil and 500 tcf gas

Pervasive, prolific Jurassic source rock

Nearly 4mm acres under license

equivalent to 672 OCS lease blocks

Individual mapped closures exceed130,000 acres equivalent to 22 OCS leaseblocks

Repsol to spud Cuba well 1Q 2012


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Strategy Goals and Targets

Maximise value growth from oil/gas potential in Bahamian licences

Technical: Maximise resource/reserves declaration, exploit carbonate expertise regionally

Costs: Leverage equity position to minimise future demands on shareholders

Commercial: Maintain maximum access to upside while retaining adequate control of licences

Ensure wealth and opportunity creation for Bahamian people and nation

GOALS

Describe and demonstrate upside

High-grade resource potential post 3D

Continue to de-risk inventory internally

Prove play-types commence inventory drill-out

Funding/farmdown strategy to leverage activity

Negotiated JOA to retain influence

Realise value upside through equity participation

Examine new licence potential

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TARGETS Timing

Opened data room 2Q11

Completed 3D acquisition 3Q11

Initial 3D interpretation 4Q11

Commence preparations for drilling 1Q12

Complete Farm-in discussions 2Q12

Comply with regulations 2Q12

Access Rig 4Q12

Drilling (before April 2013) 2013

STRATEGY


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Leadership Team

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In-countryleadership

Executive

Management

Non-ExecutiveBoard

President

Material international business experience

Significant directorships, financial and oil & gas executiveexperience

Financial, technical stewardship

Founder of BPC, 39 year career in the oil business

Founder of Hardman Resources, sold to Tullow Oil - A$1.4bn

Active in 28 new field discoveries Uganda, French Guiana, Mauritania

30 years resources exploration, development and production, in Europe, Russia, America,Africa and Australasia

BP 20 years. CEO:- Hardman Resources, Arrow Energy International, Dart Energy.Management of dual listed entities - AIM top 10, ASX 100 and 200. Value growth track record

Commercialisation of new hydrocarbon provinces. Significant raising and A&D experience

37 years directing exploration and production projects throughout the United States andCanada. Ph.D. Geology

Marathon Oil Company: Manager of US exploration.

Chief Geologist: BP America

Audit as at 30/9/2011; refreshed governance processes

Invite Bahamian and E&P experienced candidates onto the Board

Examine Bahamian listing options

AdrianCollins

DursleyStott

EddieShallcross

SteveWeyel

AlanBurns

SimonPotter

PaulGucwa

d


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Asset Base, Activities and Status

Exploration licence: 12 years in total; four 3-year periods 1st Renewal (years 4 6) @ 100% of acreage well

commitment (spud before end of year 4 - April 2013)

Company advised Ministry of the Environment ( Feb.2011) commitments fulfilled and intention to extent

licences to 2015Production licence: 30 years plus additional 10 years(subject to approval of extension)

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Application (1) Holder License Area

Islamorada Licence BPC / Statoil777,900 acres

3,148 km2

Zapata Licence BPC / Statoil

776,200 acres

3,141 km2

Falcones Licence BPC / Statoil774,600 acres

3,135 km2

Application (2) Holder License Area

Santaren Licence BPC760,100 acres

3,076 km2

Andros Licence BPC 774,500 acres3,134 km

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August 2010 Bahamian Government suspended theconsideration process for all oil exploration anddrilling applications pending new environmentalprotocols

Ri k Miti ti P i D Ri ki


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Risk Mitigation Progressive De-Risking

25 KmTenneco 1986

BPC 2007

BPC 2011

BPC 2012

Forward Work Programme/Obligations

Fast Track PSDM: Improve interpretation of Jurassicinterval, seismic facies/lithology

Prioritise well locations Detailed well planning

Continue negotiations for partner(s) for SouthernLicences

Apply for additional licences

Participate in 2D over Statoil joint application areas

Retrieved original core and cutting samples

Completed modern analysis of olderseismic, well logs, gravity and magnetics toprovide structural geologic analysis,

reservoir simulations, geochemistry andpetroleum systems evaluation

Shot 2D seismic, gravity and magnetics inJune 2010 and January 2011

CPR released July 2011

CGGVeritas BroadseisTM 3D acquisitioncompleted September 2011. >3000 km;largest ever for GoM-Caribbean

Ri k Miti ti P t D fi iti


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Risk Mitigation Prospect Definition

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Time Structure Top Cretaceous showing Folds A,B, C & D

Figure SM-3: Top Cretaceous Fold B and C closure, Red polygon, 75km in length, area 524km2 (129,400 acres >22 OCS lease blocks )

Ri k Miti ti S d Mi ti


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Risk Mitigation Source and Migration

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Seafloor vent activehydrocarbon seepagecreates vent on seafloor

No or poor seismicdata

No valid traps

Wells on bank

Limited seal faciesshallow

No Jurassic sourcepenetration

Risk Mitigation Diverse Petroleum Systems and Play types


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Risk Mitigation Diverse Petroleum Systems and Play-types

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2. Upper CretaceousPlatforms, Buildups &

Talus

3. Lower Cretaceous &Jurassic EvaporiticPlatform Dolomites,

Buildups & Talus

1. Jurassic Paleo Highs,Clastics & Subsalt

4. Middle Late Jurassic Rift& Sag Basins, Evaporitic

Dolomites& Reactivated Faults

5. Foreland Folds &Imbricate Thrusts

Risk Mitigation Reservoir and Seal; Seismic Determined Facies


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Risk Mitigation Reservoir and Seal; Seismic Determined Facies

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Upper Cretaceous platform architecture

Retrogradational stacking of Albian 1 and 2 platformsKerans, 2011

Risk Mitigation Structures Scale and Potential Targets


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Risk Mitigation Structures, Scale and Potential Targets

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5 km

Near top Cretaceous

Top lower Cretaceous Albian

Intra lower Cretaceous Aptian

Intra lower Cretaceous Base Aptian

Jurassic

Cuban Border

Low HighUn-risked(MMBO)

CoS %

Section is horizontally compressed approximately 2:1

2011 2D Seismic with CPR Estimates Nassau270 km

3,000

Approx.Depth(feet)

9,000

18,000

Fold B5 km

Fold A Fold C

33 36328%

54 53828%

29

31535%

98 170235%

93 131523%

135 161126%

13

14611%

34 79813%

116 150332%

Section is horizontally compressed approximately 2:1

Risk Mitigation Third Party Verification: CPR July 2011


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Risk Mitigation Third Party Verification: CPR July 2011

HIGHLIGHTS:

Assessment of Cretaceous play system, post Aptian, only.

Over 1 billion bbls of risked recoverable resources. Average risk ~1:4 (25%)

Two independent reservoir intervals over the Bain, Cooper and Donaldson Licenses each havemean estimated un-risked recoverable resources in excess of 1.5 billion bbls; a third has inexcess of 1.0 billion bbls

Top Aptian horizon alone contains a risked recoverable resource in excess of 0.5 billion bbls

Potentially a single penetration could test a mean unrisked recoverable volume of in excess of 2billion bbls

Two structures have an un-risked recoverable resources in excess of 1 billion bbls of oil

Unrisked mean volumes sum to in excess of 4 billion barrels with working petroleum systemsat each stratigraphic level assessed

Shallower Tertiary strata and deeper Jurassic, pre and post-salt are still to be evaluated (post3D seismic evaluation) and could equal or exceed the aggregate Cretaceous potential

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Risk Mitigation Environment; EIA Spill Simulation


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Risk Mitigation

Environment; EIA, Spill Simulation

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simulated release site

% of oil released making shoreline, remainder eitherevaporated or biodegraded

2,556 individual spills lasting 60 days tracked for 90 days; nointervention

BPC EIA for Southern blocks submitted to Government October 2011

Agreed deadline for received comments and issue for public consultation 23rdJanuary 2012

Joint Statoil/BPC EFS submitted to Government October 2011

Active dialogue with Government ahead of a public consultation process

Wide consultation process on best regulatory practice

LocationSurface

15 mbopdSeabed

10 mbopdSeabed

20 mbopd

Eastern US 0.05 0.03 0.02Southeast 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 MPAs 0.00 0.00 0.00

Total 46.9 35.3 27.7

Commercial Context and Fiscal Terms


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Commercial Context and Fiscal Terms

Commercial

Politically stable; uninterrupted parliamentary democracy of over 275 years

English heritage/based legal system and structure

Significant structural cost benefits from proximity to extensive oil field services, contractors andequipment/infrastructure providers from US Gulf of Mexico

Freeport status; facilitated customs and excise import/re-export

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Fiscal

Excellent fiscal terms structured around sliding scale production-based royalties (12.5 - 25%)

No income/corporation tax in Bahamas

No capital gains tax on any transaction

Initial 50% free cash flow to licence owner (based on 600 mmbbl development and currentprevailing oil price)

Modest holding cost based on cost/acre paid annually (deductible against royalty payment)

Capital Structure


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Capital Structure

Enterprise Value Current Substantial* Shareholdersas at 30th September 2011

Shareholder

Fidelity

TD Waterhouse

Halifax Share DealingBarclays Wealth

Hargreaves Lansdown Asset Management

Standard Life Investments

Majedie Asset Management

JM Finn & Co

Total Directors, Management& Founders 63,298,444 5.14%

Total

Top 25 Shareholders 740,388,933 60.17%

Total Shares in Issue 1,230,479,096

* Holding over 3% of shares in issue

* Share price and Market Cap as at 22 November 2011

** Based on figure disclosed in Interim Financial Statements to 30 June 2011

*** Estimate of 3D costs expended to date following disclosed cash balance as at 30 June 2011

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GBP USDPrice* 0.0691 0.1085

52 Week High 0.2525 0.3966

52 Week Low 0.0680 0.1068

Market Cap (mm) 85.0 133.5

Cash and Cash Equivalents (mm)** 41.9 65.8

Less 3D Costs (mm)*** (16.6) (26.1)

Reconciled Cash and CashEquivalents 25.3 39.7

Enterprise Value (mm) 59.7 93.8

Existing register

80% UK, 15% Europe, 5% R0W

Retail 50 55%

Future

Bahamian Listing

BDR option

Funding - Sources and Uses


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Funding Sources and Uses

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Current sources US$m

Cash as at 1/1/11 6.1

Cash raised 1 70.1

TOTAL SOURCES 2 76.2

1in the 6 months to 30/6/2011. Net ofraising costs

2Additional sources expected from farm in

Sources Uses (Estimated - beginning 2011 to end 2012)

Operating expenditures US$m

2D seismic

3.4

3D seismic 34.4

Multibeam 0.6

Other Technical Projects 1.8

Technical staffing/Consulting 3 1.3

Licence Related Costs 1.3

2011 Non-recurring costs 1 3.3

Sub-Total 46.1

Corporate Costs 2011/12 10.5

TOTAL USES 2 56.6

1 Raising, Personnel and Legal costs2 Period 1/1/11 31/12/123 Including preparation for drilling

Note: BPC is debt free

Farm down to reduce exposure and providefunding

Opened data room June 2011

Targeted major companies with proven trackrecord and active independents

Significant interest maintained

Negotiations underway; expect to occur by 2Q2012

Resultant net cash balance end 2012assuming estimated uses ~US$20 millionbefore any new sources

Competitive Landscape


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Co pet t ve a dscape

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Anticipated well locations

News flow 2011/2012


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/

Bahamianise: new Board members (Bahamian, E&P), Bahamian listing

EIA submitted: public consultation, endorsement, revised legislative framework

New licenses: pending revised protocols

Existing applications, new seismic

Expand asset base, leveraging expertise

3D Database: fast track processing, interpretation and attributes

Seismic facies analysis, Petroleum system development Prospect definition and prioritisation

Bahamas election: result and timing; New mandate; Relationships

Farmdown: Verification, funding capacity, technical credentials; rig access

Drilling: Revised drilling mandate, Cuban activities Detailed well planning; location options, depth, timing and cost

Spill response plan, coordinated across the region

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Key Conclusions


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y

New 2D established the playfairway, basin architecture and scale. Indicates historicwells were not valid tests

Establishes billion barrel risked potential; Multi-billion barrel upside; Multiple

independent play systems

Individual well tests/prospects could prove multi-billion barrel potential acrossdifferent, independent horizons

3D data significantly reducing risk whilst facilitating prospect identification and wellplanning

Scale, volume upside and untested nature of the basin attractive to Majors and NOCs

Unparalleled commercial context; benign regime, political stability/legal integrity,advantaged cost structure

National election, revised regulatory framework and renewed mandate catalysts

BPC believes stock significantly undervalued

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Technical and commercial combination provides almost unique access to valuegrowth potential in current international oil and gas markets

Documents

BPC November.december SCP 28-11 Final