The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas-based oil explorer says the London listing - and trading - of shares in an investment fund it promoted to local investors has "been significantly hampered and thus delayed" by COVID-19.

Bahamas Petroleum Company (BPC), which has already delayed the drilling of its first exploratory well in Bahamian waters until late May/early June, said in a statement that plans to list the BPC Investment Fund on the UK's Alternative Investment Market (AIM) have also been impacted by the virus.

The fund, which was sponsored by the oil exploration outfit, was targeted at "sophisticated" Bahamian investors to give them an opportunity to participate in the potential rewards should BPC's activities uncover commercial quantities of recoverable oil.

Some 35.337m BPC ordinary shares have already been allocated to the BPC Investment Fund, which can only invest in the oil explorer. BPC had planned for trading in the fund's shares to begin on Tuesday, April 14, but revealed this week that this date has been missed as "necessary administrative processes in The Bahamas" are still being completed.

"Admission to trading on AIM of the fund shares did not take place... as previously announced, as the Fund is yet to complete certain necessary administrative processes in The Bahamas," BPC said.

"The Fund's ability to undertake this action has been significantly hampered, and thus delayed, by the state of emergency declared and ongoing business disruption caused by the national response to the COVID-19 outbreak in The Bahamas.

"The expected admission date for the fund shares will be announced once timing for completion of the necessary administrative processes is known with certainty. The company notes that, notwithstanding the delay in allotment, the subscription funds, amounting to approximately $0.9m in respect of the fund shares, reside in the mutual fund account."

The BPC fund's "professional fund" status meant it could only seek investments from so-called "sophisticated" investors, such as institutions and high net worth individuals, willing to commit a minimum $10,000 while excluding smaller Bahamian retail investors from any involvement.

While some Bahamian retail investors are likely to have been unhappy at their exclusion, others will argue that the fund's status as a "professional" fund is entirely appropriate as the investment opportunity is only suitable for sophisticated investors able to both understand its high reward/high risk potential and absorb any subsequent losses.

For BPC is effectively a start-up, yet to drill its first well and with a history of financial losses. And, for all its research to "de-risk" the project, there is no 100 percent certainty that commercial quantities of recoverable oil lie below The Bahamas' sea bed.

As a result, many capital markets observers will likely view the BPC Investment Fund offering as more a venture capital/private equity investment play rather than an opportunity for small retail investors who can ill-afford any major loss.