MODERN TECHNOLOGY LEVERAGES OPPORTUNITY
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SIMON POTTER CHIEF EXECUTIVE OFFICER
September 2013
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 for information 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.
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Company Highlights
Multiple play-types with scale potential – proven Cuban petroleum systems
CPR highlights multiple billion barrel prospects – extended and derisked by 3D
Fiscal terms yield returns commensurate with risk – Government clarity drives activity and investment
Value realisation by material participation through funded well execution
Corporate and Commercial • Capitalised Expl. US$45.7 mill.
• Funds Expended US$82.8 mill.
• Cash end 2012 US$21.3 mill. est. 2013 US$15 mill.
• New CA’s signed; revised mandate sOmulated interest
• Fully-‐funded for immediate future; F/O interest renewed
Opera0onal and Technical • 3D Seismic data interpreted
• Residual risks post CPR further miOgated
• ProspecOvity deeper confirmed
• Well Plan FEED completed
• No read-‐across from Cuba wells
• Technically robust and drill ready
Government and Environment • Moratorium/exploraOon referendum
• Licence renewed/extended • New oil & gas regulaOons – internaOonal best pracOces
• EIA public; EMP underway
• Poli;cal clarity reinvigorates explora;on process
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Anticipated BPC location
Curtailed Cuba Drilling
Previously drilled wells
★ ★ Licences grant 2007- renewed 2013
• Obligation to drill – commence April 2015
• 4 million acres, 16 million sq.km, 672 OCS
New applications submitted 2010
Listed London: 2008 (AIM:BPC)
+$50 million spent to date
Nassau based office and staff
Attractions
• Prospectivity and scale – multiple play types and multi-billion barrel prospects
• Location and cost structure
• Legislative and fiscal stability
• Technology application
Company and Licence Overview
Regional Prospectivity and History
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Doubloon Saxon - 1987 • Oil Shows
• Some good source rock
• Good reservoir/seal intervals
• Normally pressured
No commercial production
No viable structures
Regional data acquired
Reinterpretation/reprocessing
All core & chippings recovered
Cost to acquire now +$0.5 bn
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Accumulated Seismic Database on Workstation
1985
2011
2013
Tenneco
BPC
BPC
Cuba
Florida
Bahamas
Seismic Acquisition: 3D PSDM
Trend A
Fold B
Fold C
Fold B
Fold C
Fold B
Cross-‐sec0on
High to Low
ç Cuban Border Andros è
Fold B
Fold B
Fold B
Fold C
Fold C
Fold C
Trend A
Trend A
Fold B Fold C
Depth Length Closure
Area
Fold B
700 m ~75 kms 423 km2 (104,526 acres)
Fold C
950 m ~25 kms 63 km2
(15,814 acres)
Late Cretaceous
Albian
Ap0an
Depth Length Closure
Area
Fold B
2,400 m ~75 kms 288 km2 (71,166 acres)
Fold C
3,250 m ~25 kms 64 km2
(15,814 acres)
Competent Persons Report • ~3 billion bbl potential • Risking 35 – 23% Folds B/C • Below first anhydrite & other
potential not assessed
Conclusion • Residual source risk • Only reduced by drilling 6
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Original and Relocated Pseudo Doubloon Saxon - 1
Doubloon Saxon-1 Pseudo DS-1
3D data 2D data
First Evaporite
Good tie between 2D and 3D seismic data
Ome
First Evaporite
Good tie synthetic to 3D seismic data
Pseudo DS-1
3D Data Mixed 2D and 3D Data
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DS-1 Geological Signature Transposed onto 3D Seismic
Cuba (SW)
Bahamas (NE) Fold B
Prospect Locations, Scale and Extent
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Fold B North
Trend A - Cenomanian Reef
Trend A - Cenomanian Backreef
Trend A – Cenomanian Forereef
10 Kms
Fold C
Fold B South
Fold B
Fold C
Trend A
MCU Albian
Albian Reef Albian Megabank
Aptian First Anhydrite
Anhydrite/Dolomite
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Cuba Context
Anticipated BPC location
Drilling issues – aborted well short of target depth
Anticipated well locations
Previously drilled wells
Cuba drilled holes
Target Zone
Projected well
Similar Projected well
Shallower water but thicker, hard overburden
Large Gap
2,000m
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Well Target Comparison: Cuba Evaporite Basin / Bahamas
Environment and Safety Approach
Regulations and Standards
• International best practices embodied in EIA
• No sensitive environments in immediate vicinity of first proposed drill site
• Modernised and strengthened Regulations
Equipment and Procedures
• Performance based systems • Advanced mud systems
• Learnings applied
Top Hat Capping Stack
Source: Helix Well Containment Group
Spill Response
• Response Plan • Tier III Responder
• Educated, prioritised and focused response
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➠ Safe Exploratory Drilling
Atlan&c Ocean Abaco
Grand Bahama
Eleuthera
Cat Is.
San Salvador
Rum Cay
Samana Cay Crooked Is.
Long Is.
Andros
Exuma
Exuma Cays
Cuba
Cay Sal
Great Bahama Bank
New Providence
BPC ExploraOon Well Zarubezhnef drilled Q1 2013
Wells drilled in Cuba 2012 AnOcipated well locaOons for 2013
Storages
Oilfields
Oil Pipeline Gas Pipeline
Mar0n Mesa Field Jarahueca Field
Motembo Field
Central Basin Fields (4)
Boca de Jaruco Fields (5)
Pto. Escondido Yumuri Fields (2)
Santa Cruz
Varadero Fields (7)
Refineries
Terminals
Cayo Coco 10 563 f (3,200m)
Cay Sal IV-‐1
Joides 101
Joides 100
Joides 99
Long Is. -‐ 1
Andros -‐ 1
GT. Isaacs
Coastal State -‐1
Doubloon Saxon -‐1
Joides 98 Williams Historic
Boreholes
Oil and Gas Activity Already Exists!
Major Shipping Lanes
FREEPORT
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Exploration Well Design – Enablers to Drilling Activity
• Planned well depth: 22,500 feet
• 1 year to plan, 120 days to drill
• Anticipated well cost: $100 - $120 million
• 3D seismic data to safely plan well
• Water depth at location: 1,500 feet
• Distance from Shoreline – Cuba 25 miles
• Drilling rig – upgraded & advanced safety mechanisms
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Enablers
• Moratorium – previous Government
• Exploration drilling – Political clarity
• Licences renewed, obligation to drill
• Licence boundaries realigned
• Upgraded regulations pending
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Potential Development, Timing and Benefits
Phase
~ 5 – 10+ years
~ 1 year ~ 1 – 3 years ~ 3 – 6 years ~ 20 – 40 years
Seismic & Geologic Studies
Exploratory Drilling
Exploratory/Appraisal Drilling
Development Planning &
Construction
Development and
Production
BPC
$50 million
$60 – 160 million
$400 – 600 million
$multiple billion USD
Gov.
$0 $0 $0 $0 ~ $ tens billion revenue
Completed In Progress Estimated Typical Costs Based upon Exploration Success
Cost
Note: These numbers are based on estimates that could change as the result of exploration drilling. Does not include cost of capital to shareholders.
Bahamas Investment Climate
• “Open for Business”
• Stability – legal and fiscal
• Established framework – No Corporation/Income Tax, No CGT
• 30 year Production Licence
• Royalty rate to 25% on revenues
Benefits to The Bahamas
➔ No financial risk/cost to Government
➔ Long term source of revenues
➔ Diversification of the economy
➔ Time: training and employment
➔ Local contracts/investment
➔ Costs of fuel and power
Timeline: Company Planning
2Q15 1Q15 4Q14 3Q14 2Q14 4Q13 3Q13 2Q13 1Q14 1Q13
ENVIRONMENT
DRILLING OPTIONS
Well Planning
COMMERCIAL
4Q12
Hurricane Season Hurricane Season
Zarubezhneft Drilling
EIA Published
Petronas Drilling
Public Consultation ???
Regulations ??
EMP Spill Plan Sensitivity Maps
Funding Options ?
CUBAN DRILLING
Well Planning
Long Lead Items
Referendum Decision
Decision
Final Consultation? Final Consultation?
Decision
Long Lead Items
Designed Well Engineered
Corporate Objectives • A well safely executed to 22,5000’ into Jurassic source • Shallower objectives as justified commercially • Facilitate the drilling of a well
• Address funding, environment and permissions
Drilling
BDR Listing
Hurricane Season
Hurricane Season
Drilling Commencement Range
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