Bahamas Petroleum Company PLC to reset and rebrand as Challenger Energy Group

() said it will convene an extraordinary general meeting and reveal a number of material changes to the business including a £6.9mln capital raise, a new chief executive, and a rebrand to ‘Challenger Energy Group PLC’.

Challenger Energy will in the near-term focus on cashflow and production whilst managing a cost cutting initiative to reduce its operational cost by at least 20% to 30%.

Eytan Uliel, currently commercial director, will become the company’s new chief executive and Simon Potter is to transition to a non-executive director role, effective from May 20.

The company is to raise £6.9mln with an open offer to qualifying shareholders, issuing some 1.96bn new shares priced at 0.35p. Shareholders will be able to buy 1 new share for every 2.46 shares they hold. Any shares not taken up will be sold to institutional investors at the same price.

The equity issue will be followed by a 1:10 share consolidation.

“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.”

Much of the detail in Challenger’s operations have previously been announced.

The Saffron-2 appraisal well, in Trinidad, will be a highlight as drilling gets underway in May or June.

The well is budgeted to cost US$3mln and is expected to yield 200 to 300 barrels of oil per day (bopd), to generate US$1.8mln to US$2.6mln of cashflow per year and set up a full-field development programme which could establish a base of 1,000 to 1,500 bopd, for US$8mln to US$12mln per year.

A longer term development of Saffron would comprise up to 30 wells to achieve peak production of around 4,000 bopd, it noted.

Separately, an appraisal well at the Weg Naar Zee project in Suriname is slated for July, budgeted at US$0.7mln, to potentially tee up an initial development producing 100 bopd for US$1mln of cashflow per year. A longer term development scenario is projected to generate more than US$2.5mln per year.

Challenger will also continue its schedule of ongoing production maintenance and enhancement work in Trinidad and Tobago where five producing fields currently average production between 450 and 500 bopd, for US$3mln of annual cashflow.

The company said it intends to continue low-cost exploration activities meanwhile a farm-out is sought for the group’s Bahamas asset.

In Uruguay, the company is conducting initial technical work and in the future it will consider options to farm-out a stake in the project.

Along with the chief executive switch, the company will also see non-executive directors Adrian Collins and Ross McDonald step down, and, Stephen Bizzell will join.

“I would like to welcome both Eytan Uliel and Stephen Bizzell on their prospective appointments to the board, as respectively CEO and non-executive director,” Schrader said.

“Shareholders will already be familiar with the contribution of Eytan to the organisation over the last seven years, and Stephen is highly credentialled in the industry, having successfully assisted many similar companies with significant capital raisings and transformational corporate transactions, as well as having actively supported the funding of this company for the past two years.

“Simon Potter stays with us as a non-executive director, where his skills and experience remain available to the organisation.”

The chairman added: “Taken together, the steps being announced today represent what the board considers to be a coordinated approach to charting a viable and…