By Samuel Indyk
Investing.com – Shares in AIM-listed energy company Bahamas Petroleum (LON:) were plunging on Friday after they announced a “reset” of the company and its capital base.
Firstly, the company said it plans to hold an extraordinary general meeting to push through a change of name from Bahamas Petroleum to Challenger Energy Group, a new CEO and a capital hike of £6.9mln.
Eytan Uliel is to be become new CEO, replacing Simon Potter who will transition to a non-executive director role effective 20th May 2021.
The company also plans to recapitalise the business through a proposed £6.9mln share offering to qualifying existing shareholders. The company intends for any shares not taken up in the open offer to be placed with institutional investors at the same price. The company intends to offer approximately 1.967bln shares at a price of 0.35 pence per share.
In the near term, the company said activity is focussed on significantly increasing production and cashflow.
That includes drilling Saffron #2 well in Trinidad in May or June this year which is expected to produce around 200-300 barrels of oil per day, paving the way for full-field development.
The company has also commenced a cost cutting initiative with a view to reducing ongoing cost of operations by at least 20%-30%.
“The Company is focussed on restoration, renewal and refreshment,” said Chairman Bill Schrader. “In this context, the Company’s forward business strategy for the coming 12-18 months has been firmly set, on significantly increasing oil production and thus cashflow from our assets in Trinidad and Tobago and Suriname, which the Board considers to be the most effective manner in which to restore value and create a foundation for future value growth.”
The update comes after the failure of the company to find commercial hydrocarbons at its Perseverance #1 well, which the company said would be plugged and abandoned back in February. Technical issues while drilling meant the ultimate cost was “considerably more than planned”.
Before the announcement in February, Bahamas Petroleum shares were trading above 2.00 pence per share, but a steep decline has seen shares drop to all time lows. At 11:25BST, shares in Bahamas Petroleum were trading lower by 23% at 0.406 pence per share.
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