Postponement of Referendum on Oil Exploration Lifts Bahamas Petroleum

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Shares of Bahamas Petroleum Company plc (LSE:BPC) surged upward on the London Stock Exchange today after the Government of The Bahamas decided to postpone a referendum that would decide the future of the oil exploration in the waters of the Caribbean commonwealth state.

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In a statement, BPC’s Chief Executive, Simon Potter, welcomed the decision of the Bahamas Government saying that it “paves the way for an assessment of the potential of oil resources” in the country.

The country’s Environment & Housing Minister announced on 10th March that the government is postponing its plan to put to a vote in a referendum the decision on the future of oil development in the country until after the exploration phase undertaken by BPC.

Back in September 2012, the newly elected government informed BPC that any policy on oil exploration will have the vote of the citizen through referendum, prompting the company to issue a statement that the April 2013 commitment well may be not be drilled on schedule.

BPC, which holds five 100%-controlled offshore licences encompassing approximately 16,000 square kilometres, is the first oil and gas company to explore the waters of the archipelagic state in 25 years.

Following 2D and 3D surveys as well as historical data, BPC said there are multiple structures that potentially contain at least 500 million to a billion barrels of hydrocarbon, as outlined in the company’s Competent Person’s Report in 2011.

BPC’s interest in exploring the waters of The Bahamas was in part due to the active exploration in the waters of the nearby state of Cuba believed to contain multi-billion barrels of oil equivalents.

The company said the deferring the referendum after the result of the exploration will provide “the Bahamian people the data from which to make an informed decision on the framework for energy industry activities”.

According to BPC, about US$50 million has been allotted by the company to the Bahamas Project, which is hoped to yield a successful discovery of multi-billion barrels of oil within its large acreage.

The news was welcomed positively by the market with nearly 60 million shares traded on the Alternative Investment Market and boosting the share price up 37.9% by 2:00 PM GMT to 6.55 pence, valuing the company at £80.6 million.

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