top of page

Oilman Jim's Private Blog


Bahamas Petroleum - Result of Placing, Open Offer & Funding Strategy


·      Open Offer closed with c.50% take-up from existing shareholders raising gross proceeds of US$4.3 million through the issue of 166.4m ordinary shares at a price of 2p each.

·      Successful Placing to raise additional gross proceeds of US$7.1 million through the further issue of 275,641,455 ordinary shares at a price of 2p each.

·      Aggregate gross proceeds of US$11.4 million from Open Offer and Placing representing an oversubscription of 60% against announced targeted fundraise amount.

·     As a result of the Open Offer, the Placing and the previously announced Conditional Convertible Note, the Company expects to see gross cash inflows of approximately US$24.6 prior to March 2020.

·     Sequenced cash inflows through 2019 and 1H 2020 expected to be sufficient to meet the anticipated costs of an initial exploration well in The Bahamas during 2020, consistent with licence obligations, with timing of cash inflows matched to funding requirements.

·     Farm-in discussions remain active, and the Company continues to consider other financing alternatives, to strategically expand its available funding resources.


Bahamas Petroleum Company plc, the oil and gas exploration company with a significant prospective resource in licences in The Commonwealth of The Bahamas ("The Bahamas"), is pleased to announce that it has raised US$7.1 million before expenses through a firm placing of 275,641,455 new ordinary shares of 0.002p each ("Ordinary Shares") (the "Placing Shares") at a price of 2p each (the "Placing). The Placing was undertaken via an accelerated book-build process, as announced on 4 November 2020, with the Company seeing strong demand and thus increasing the size of the Placing from the initial targeted amount.

Together, the Placing and the previously announced successful Open Offer, raised US$11.4 million before expenses representing an oversubscription of 60% against the announced targeted placing.

The Placing comprises part of a coordinated funding strategy by the Company toward the drilling of an initial exploration well in The Bahamas during 2020. Other elements of this funding strategy as announced to-date are:

1.    An Open Offer to qualifying shareholders, as announced by the Company on 18 October 2019 and closed for acceptances, in accordance with its terms, at 11.00 a.m. on 1 November 2019 (the "Open Offer"). The Company received valid acceptances and excess applications from qualifying shareholders for a total of 166,402,235 new Ordinary Shares under the Open Offer. All excess applications from qualifying shareholders will be met in full, and in aggregate the Open Offer represented a c.50% take-up by existing shareholders, raising gross proceeds of approximately US$4.3 million.

2.    A Conditional Convertible Note Subscription Agreement, entered into by the Company on 10 October 2019 (and as more particularly described in the Company's announcement of that date - the "Conditional Convertible Note"), whereby, subject to satisfaction of various conditions precedent prior to 15 February 2020 in accordance with the terms of that subscription agreement, the Company expects to raise an additional c.US$13 million.

When considered in aggregate, the proceeds of the Open Offer, the Placing and the Conditional Convertible Note (assuming all conditions precedent to the Conditional Convertible Note are either satisfied or otherwise waived and the Conditional Convertible Notes are fully subscribed, and assuming further that interest is capitalised and all principal and capitalised interest is ultimately converted) would result in approximately 1 billion new Ordinary Shares being issued, and total funding inflows over the next six months of approximately £19.1 million (approximately US$24.6 million), with cash inflows matched to the timing of operational requirements. The Company's present estimate of the total cost for the drilling of the initial exploration well is in the range of US$20 million to US$25 million.

Funding Strategy Update:

The Company considers that with the success of the Open Offer and the Placing, and when combined with the Conditional Convertible Note, it will likely have sufficient funds to undertake the drilling of an initial exploration well in The Bahamas during 2020, in accordance with the Company's licence commitments.

Moreover, in addition to the proceeds from these activities the Company continues to pursue a farm-out as part of its overall funding strategy, and has received proposals for, and continues to develop and assess a number of other financing options. A decision to enact any of these other financing proposals will be taken, if required, based on the outcome of the farm-out process.

To the extent that a farm-out is successfully concluded on terms acceptable to the Company, the amount of capital available to the Company would likely materially increase, and would be additive to the funds raised through the Open Offer, the Placing and the Conditional Convertible Note. Such funding could be applied towards all or a considerable portion of the costs in respect of the intended drilling, or alternatively proceeds from any farm-out could be applied to a broader work programme than the current single well the Company intends to drill in 2020.

Shareholders should note, however, that there remains a degree of uncertainty in relation to the Conditional Convertible Notes, given that ultimate quantum of funding to be received is dependent on the occurrence of future events outside of the control of the Company. Specifically:

·     Funding from the Conditional Convertible Notes remains subject to certain conditions precedent as set out in the subscription agreement for the Conditional Convertible Notes first being satisfied on or prior to 15 February 2020 (unless said conditions are waived by the subscribers), and

·     the Company continues to work on securing a farm-out, which if successful could likely materially increase the amount of capital available to the Company, which could offset all or a considerable portion of the costs in respect of the intended drilling or alternatively provide funds in excess of that required to complete the initial well, thereby potentially facilitating further exploration activity on the licences including that of an additional well.

In circumstances where suitable funds are not raised via the Conditional Convertible Notes, or if a farm-out is not secured, the Company would likely not have sufficient cash to complete the drilling of the planned initial exploration well in 2020, which, in turn, puts the Company at risk of not meeting its licence obligations. In such circumstances the Company would look to secure funding by way of alternative sources. There can be no assurance, however, that the Company would be successful in securing any such alternative funding.

Placing Summary:

The Placing will raise, in aggregate, $7.1 million before expenses through the placing of, in aggregate 275,641,455 new Ordinary Shares at a price of 2p per share (the "Placing"). The Placing Shares to be issued will rank pari passu in all respects with the Company's existing Ordinary Shares and will represent approximately 14 per cent. of the Company's enlarged issued ordinary share capital, following admission of the Placing Shares. 13.8 million unlisted warrants to subscribe for new Ordinary Shares at the Placing Price per share for a period of 24 months are to be issued to Shore Capital as part compensation for services provided under the Placing. In addition, 5 million warrants to subscribe for new Ordinary Shares at the Placing Price per share for a period of 24 months are to be issued to Strand Hanson Limited for corporate finance advisory services in connection with the Open Offer and Placing. 

Application will be made for the 275,641,455 Placing Shares to be admitted to trading on the AIM market of the London Stock Exchange ("AIM") and it is expected that admission will take place and trading in the Placing Shares will commence from 8:00am on 12 November 2019 ("Admission").

Total Voting Rights:

Following the Admission (and inclusive of the shares to be issued pursuant to the Open Offer), the Company's issued share capital will consist of 2,134,762,786 Ordinary Shares, with each Ordinary Share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. This figure of 2,134,762,786 Ordinary Shares may therefore be used by shareholders in the Company, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules ("DTRs").

Working Capital:

The directors consider that the proceeds of the Placing and the Open Offer, together with the Conditional Convertible Note (subject to satisfaction or waiving of the outstanding conditions precedent) and the Company's existing financial resources, will provide sufficient working capital for its currently anticipated requirements, including its planned exploration well, for at least the next 12 months. 

Simon Potter, Chief Executive Officer, commented:

"Our clear focus at Bahamas Petroleum is to drill an initial exploration well on our highly prospective acreage in The Bahamas during 2020, consistent with our obligations to the Government of The Bahamas. We have been working diligently to develop a coordinated funding strategy so as to ensure we have access to the funds necessary for drilling, as and when we need them. I am thus extremely pleased to advise all shareholders of our successful Open Offer and Placing, which, in aggregate, have raised approximately US$11.4 million. When combined with the proceeds we expect to receive from our Conditional Convertible Note, we will have secured the finance required for drilling activities, given our anticipated well cost is in the range of US$20 million to US$25 million. At the same time, we continue to maintain our cost focus, monitor a range of additional funding options, and progress our farm-in process, all with a view to strategically enhancing the overall financial capacity of the Company, whilst not being reliant on any particular outcome for drilling activities to be implemented.

I would like to thank existing shareholders for their continued support, commitment to the project and confidence in the ability of management to deliver on their behalf. The path taken to this point has not been straightforward but collectively we have stayed focused so as to realise the Company's goal - the management team understands the responsibility it bears and is determined to succeed. I also take this opportunity to welcome our new shareholders and I look forward to updating you all on our progress over the next six months as we ramp up for drilling operations. We strongly believe it will be an exciting time for our Company."

Recent Posts

See All
bottom of page