Shares digital

Drilling is too far down the small-cap explorer’s pipeline to attract investors at present

by Tom Sieber

Investors face a long wait for sector newcomer BPC (BPC:AIM) to drill its acreage off the Bahamas, and since the company is targeting its first well in 2012 it is hard to enthuse about the stock.

BPC, which trades at 4.5p, does have potential as it has five licences covering a total area of 15,676 sq. km. At present, management is in talks to bring in a joint venture partner to carry 100% of the costs of drilling, which is likely to be expensive, and hopes to retain at least a 30% stake in the acreage.

The £35 million market cap reversed into troubled miner Falkland Gold & Minerals earlier this month and has already met the spending commitments it made to the government of the Bahamas when it took over as operator of the licences in April last year.

BPC has spent $10 million analysing historical data – some of which was found in a flooded warehouse in New Orleans.

Company chairman and chief executive Alan Burns says: ‘You’re not going to find an exploration project as vast, with structures so huge, where the company owns 100% and you’re dealing with a stable democracy – there’s no other deal like this one.’

Shares says: Sentiment towards the small cap exploration and production sector remains poor and more immediate catalysts are needed to buck the trend. Avoid