• Environmental Authorisation granted by The Government of The Bahamas for the Company's 100% owned and operated Perseverance #1 well, expected to spud in April 2020, targeting recoverable prospective resources of 0.7 - 1.4 billion barrels of oil
• Authorisation represents the conclusion of an extensive and thorough process over many years, involving local and international agencies, independent third-party expert consultants, and extensive engagement across all aspects of Government

Map source: Bahamas Petroleum

Environmental Authorisation

Following a considerable body of work, engagement and consultation both before and further to submission for an Environmental Authorisation ("EA") by the Company in April 2018, the Bahamas Minister of Environment (the "Minister"), upon notice of a "no objection" from the Bahamas Environment Science & Technology Commission (the "BEST Commission), has today granted the requisite EA to the Company for the proposed activities associated with the drilling of the Perseverance #1 well.

The EA has been granted by the Minister in accordance with Regulation 3 of the Bahamian Petroleum (Offshore Environmental Protection and Pollution Control) Regulations 2016, and was made on the basis that the Ministry of the Environment and Housing (the "Ministry" or "MOE&H") is satisfied, having regard to all information made available to it, that the Company be allowed to undertake the activities the subject of the EA. The Company notes that the grant of the EA confirms that the potential impacts associated with the Company's intended drilling activities have been adequately and appropriately noted and suitably addressed by the proposed mitigation measures outlined in the EA as submitted by the Company, and were in accordance with all laws and regulations applicable in The Bahamas, as well as applicable performance measures or guidelines established by international bodies, standards, conventions, treaties and maritime laws.

Environmental Authorisation Process

In 2012, the Company submitted an Environmental Impact Assessment ("EIA") to the Ministry, and which EIA was reviewed by the BEST Commission for the Ministry, and subsequently accepted at the time. The EIA was prepared in accordance with national and international industry best practices, and identified and addressed, inter alia, matters relevant to the proposed activities of the Company in its licence areas, such as Potential Impact Identification, Worst Case Discharge Analysis allied to a Fate of Particles Analysis, and associated plans for waste handling, hazard identification, and emergency/incident preparedness and appropriate response. Since 2012, the EIA has been a public document, open to public scrutiny and comment.

On 26 April 2018, in accordance with Regulation 3(1) of the then upgraded and strengthened, newly enacted Petroleum (Offshore Environmental Protection and Pollution Control) Regulations 2016, the Company submitted the EA application to the Ministry, for review and consideration by the BEST Commission on behalf of the Ministry. Reflecting the updated and modernised legislative requirements in The Bahamas since 2016, the EA included, inter alia, an updated EIA and Environmental Management Plan (the "EMP"), which specifically addressed matters relevant to a detailed description of the Company's proposed well activities, with comprehensive information associated with incident emergency response plans, management processes and systems, Environmental Sensitivity and Index Maps, and specification of on-board safety procedures relating to the proposed rig model capable of conducting drilling consistent with the licence requirements. In addition to compliance with all local Bahamian laws and regulations, the EA followed the guidelines and established performance standards of the International Association of Drilling Contractors (IADC), International Finance Corporation (IFC), World Bank Group EH&S Guidelines - Offshore Oil and Gas Development, and International Association of Oil and Gas Producers (OGP).

Since its submission, the Company's EA has been extensively reviewed by independent, internationally recognised consultants engaged by the BEST Commission, been assessed and tested against the guidelines and performance measures detailed above, and subsequently revised by the Company (with the assistance of industry leading international consultants engaged by the Company), so as to ensure the EA would adhere to all applicable laws and regulations, as well as international standards and industry best practices. All areas of additional work identified by the BEST Commission (inclusive of all the details, specifications and procedures associated with the specific rig intended to undertake the Company's drilling activities) were comprehensively addressed, with various updated and revised sections of the EA accordingly re-submitted by the Company to the BEST Commission, consistent with the established timetable agreed by all parties, and thereby completing the formal technical review portion of the approval process.

In parallel, through the Ministry and the BEST Commission, the Company has consulted with a wide range of relevant Bahamian Government departments and agencies, so as to inform them of the proposed well, and the hazard and risk management and contingency planning that has been put in place by the Company (as agreed with the Ministry and reflected in the EIA and EMP). The Company has also maintained liaison with select international Government departments and agencies where those departments and agencies might have an interest in the Company's proposed activities, and has engaged over a number of years in extensive community consultations with a wide range of potential stakeholders across The Bahamas.

Based upon this considerable body of work, engagement and consultation, the Minister has granted the Company the right to undertake the proposed activities associated with the drilling of the Perseverance #1 well at the specific location set out in the EA submission.

The Company and the Government are working towards a final agreement on the amount of licence fees payable for the period to 2018 and the two years to December 2020 (if any, and subject to any reconciliations of prior amounts paid by the Company that may be required), and in the EA the parties have acknowledged that they will continue to work collaboratively with a view to finalising this long outstanding matter within the next 60 days.

Simon Potter, Chief Executive Officer, commented:
"On the way to delivering our single-minded goal of safely completing the drilling of the Perseverance #1 exploration well there will be no more important milestone than receipt of Environmental Authorisation from The Government of The Bahamas. I am therefore extremely pleased and proud to advise that Environmental Authorisation has today been granted. This is the outcome of an extensive and collaborative work effort over an extended period of time by our team of predominately Bahamian employees, various third-party consultants, and The Government and Ministry, advised by the BEST Commission.

Today's approval reflects our steadfast commitment to ensuring that Perseverance #1 will be drilled in an entirely safe and responsible manner, in full compliance not only with the stringent laws and regulations in place in The Bahamas, but also in accordance with all applicable international standards, and adherence to global best practices as defined by the guidelines and performance measures adopted by multiple international agencies.

We continue to make rapid progress toward the drilling of Perseverance #1, and remain on schedule for a well spud in April 2020. I look forward to updating shareholders on additional milestones in the coming weeks, in what we expect to be an exciting time for our Company."