TIDMBOIL
RNS Number : 8674C
Baron Oil PLC
23 June 2021
23 June 2021
Baron Oil Plc
("Baron" or "the Company")
AGM Statement and Result of Meeting
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration
company with projects in SE Asia, Latin America and the UK,
announces its Annual General Meeting ("AGM") Statement and Result
of Meeting.
AGM Statement
Timor-Leste, offshore PSC TL-SO-19-16 ("Chuditch PSC") - Baron
75%; Timor Gap 25%
Progress since the beginning of the year has exceeded the
Board's expectations both at the asset level as well as from a
corporate perspective.
Building on the work carried out during 2020, we announced a
significant upgrade in the Chuditch PSC ("Chuditch PSC" or "PSC")
non-SPE PRMS compliant gross volumes, which included a significant
new lead and a year's extension of the PSC to enable the timely
completion of the committed work programme. TGS-NOPEC Geophysical
Company ASA ("TGS") was engaged in April for the licensing and
reprocessing of 1,270km(2) of 3D seismic data covering the
Chuditch-1 discovery and adjacent prospects. This re-processing
programme is underway with results expected to be delivered across
the period from Q4 2021 to Q2 2022. In parallel, seismic data
interpretation, geological and other studies will occur ahead of a
decision by Q4 2022 on whether to enter the drilling phase, with
the potential for a high impact drilling programme in 2023.
From a corporate perspective, we raised funds of GBP3m (gross)
in March which allowed us to complete an Earn In to increase our
shareholding in SundaGas Timor-Leste (Sahul) Pte. Ltd. ("TLS") to
85% (an effective interest in the PSC of 63.75%). TLS' wholly owned
subsidiary SundaGas Banda Unipessoal Lda ("Banda") is the operator
of, and 75% interest holder in, the Chuditch PSC. Subsequently we
moved to fully align the interests of Baron and SundaGas Pte. Ltd
("SGPL") by way of a Share Exchange, with Baron acquiring the
remaining 15% of TLS in exchange for new Baron shares representing
9.99% of the Company's share capital. Baron is now the sole
shareholder of TLS and has a 75% effective interest in the PSC,
with the remaining 25% interest held by Timor Gap, the Timor-Leste
state oil company. SGPL has become a significant shareholder in
Baron and SGPL's team, which is currently under contract to TLS and
operating the Chuditch PSC, remains in place.
The move to full ownership of TLS represents an important
strategic move. A key objective for the Chuditch PSC in 2022 is to
attract drill funding for which there are multiple options and
alternatives. Building on our earlier work, the next steps are to
establish the drill funding objectives, agree the marketing
programme and identify the main partner targets. SGPL's team
members have extensive operating experience in South East Asia and
a significant record of achieving successful farmouts spanning
multiple countries and including transactions with super major oil
and gas companies, large and smaller regional players, and private
equity.
The recent uptick in oil & gas activity in the Timor Sea
region, including infill drilling at Bayu-Undan (the only producing
field currently in Timor-Leste), continues and will be key to the
successful evacuation and monetisation of gas from the area.
Expenditure of more than US$4.5 billion has been committed to
extend the life of existing fields and pipelines, bring new fields
onstream, and increase capacity at the Wickham Point, Darwin LNG
plant.
SundaGas Banda, the operator of the Chuditch PSC, has
pre-qualified for the Timor-Leste Second Licensing Round for seven
onshore and eleven offshore blocks, which closes in October 2021.
Banda is currently evaluating the available technical data in order
to high grade blocks of potential interest.
Peru: onshore Block XXI, Sechura Desert of northern Peru - Baron
100%
Despite the ongoing COVID-19 restrictions in Peru, which have
continued to prevent any progress in relation to the drilling
project, there appears to be some movement around our application
for a three-year extension option to the licence, a prerequisite
for attracting a drilling partner during the current licence phase.
We understand that Perupetro, the Peru state regulatory authority,
has initiated the prescribed Government approval process which
requires sign off from the Ministry of Energy and Mines and
Ministry of Economy before going to the Central Bank and
Presidential Palace for signature. The Board understands that this
process typically takes between three to six months. If successful,
this would help open up a way forward for the project.
In the meanwhile, we maintain a preference for bringing in a
drilling partner with operator capabilities as we believe this
represents the best way to develop and monetise any discovery.
However, it remains unclear how quickly oil and gas exploration
activity might recover once COVID restrictions have been lifted.
For the moment, the licence remains in Force Majeure.
Whilst there are issues around the most recent national
presidential elections, in the Piura area where the proposed well
would be situated, a regional president and council are in place.
This will be of assistance in due course as we have a requirement
to undertake workshops in the local communities of Belisario and El
Barco ahead of any drilling authorisation.
As previously indicated, the Company intends to make a decision
on the drilling of the El Barco-3X project during the second half
of 2021.
United Kingdom: offshore Licence P2478 - Corallian 45%; Upland
Resources 40%; Baron 15%
Covering blocks 12/27c, 17/5, 18/1 and 18/2 in the Inner Moray
Firth part of the North Sea, the P2478 licence contains the
Dunrobin prospect which consists of large shallow rotated fault
blocks which are mapped mostly on 3D seismic data including
candidate direct hydrocarbon indicators. The prospect is believed
to be one of the few remaining undrilled UK North Sea targets
having Pmean prospective resources of the order of 100 MMBOE. The
licence's current modest work commitment is to undertake
reprocessing of legacy 2D and 3D seismic data and other subsurface
studies in order to reduce risk and refine volumetric estimates
ahead of making a "drill or drop" decision before the end of Phase
A of the licence period in July 2023. The prospect lies at shallow
depth (c. 660 metres subsea) in shallow waters (c. 75 metres).
The regional study work, carried out by a large European E&P
Company, which included the area over Licence P2478, confirmed and
enhanced our geological understanding and corroborated our view of
Dunrobin as a potentially attractive and substantial target. The
results are being incorporated into the ongoing work programme
which includes preparations for the seismic reprocessing in order
to reduce further the pre-drill risk on the prospect.
The relative size and ease of drilling make the Dunrobin
prospect a potential good fit for Baron's corporate strategy. There
are signs of industry interest returning to the UK North Sea which
could lead to a decision to pursue the licence into the drilling
phase in 2023. We are active within the joint venture to press
ahead with technical work during the remainder of 2021 in order to
position ourselves to take advantage.
Result of AGM
The Company is pleased to inform shareholders that each of its
six resolutions were duly passed by more than 93% of votes in
favour at its Annual General Meeting held earlier today.
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining
and Oil and Gas Companies, the technical information and resource
reporting contained in this announcement has been reviewed by Jon
Ford BSc, Fellow of the Geological Society, Technical Director of
the Company. Mr Ford has more than 39 years' experience as a
petroleum geoscientist. He has compiled, read and approved the
technical disclosure in this regulatory announcement and indicated
where it does not comply with the Society of Petroleum Engineers'
standard.
Andy Yeo, Chief Executive commented...
"Now that the Chuditch PSC project is moving ahead at pace and
with the alignment of our interests with SGPL successfully
completed, we are well placed to build on our earlier initiatives
around attracting drill funding in parallel with the TGS 3D seismic
licensing and reprocessing programme. In Peru, we intend to make a
decision on the drilling of the El Barco-3X project during the
second half of 2021 and in the UK, we will be looking to enhance
the value of the large Dunrobin prospect during the remainder of
2021 in order to make an informed and timely decision on entering
any drilling phase."
For further information, please contact:
Baron Oil Plc +44 (0) 20 7117 2849
Andy Yeo, Chief Executive
Allenby Capital Limited +44 (0) 20 3328 5656
Nominated Adviser and Joint Broker
Alex Brearley, Nick Harriss, Nick Athanas (Corporate
Finance)
Kelly Gardiner (Sales and Corporate Broking)
Turner Pope Investments (TPI) Limited +44 (0) 20 3657 0050
Andy Thacker (Joint Broker)
Glossary
Mean Reflects a mid-case volume estimate of resource derived using probabilistic methodology. This
is the mean of the probability distribution for the resource estimates and may be skewed by
high resource numbers with relatively low probabilities.
MMBOE Million barrels of oil equivalent. Volume derived by dividing the estimate of the volume of
natural gas in billion cubic feet by six in order to convert it to an equivalent in million
barrels of oil and, where relevant, adding this to an estimate of the volume of oil in millions
of barrels.
Prospective Resources Quantities of petroleum that are estimated to exist originally in naturally occurring
reservoirs,
as of a given date. Crude oil in-place, natural gas in-place, and natural bitumen in-place
are defined in the same manner.
SPE PRMS The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management System ("PRMS"):
a system developed for consistent and reliable definition, classification, and estimation
of hydrocarbon resources prepared by the Oil and Gas Reserves Committee of SPE and approved
by the SPE Board in June 2018 following input from six sponsoring societies: the World
Petroleum
Council, the American Association of Petroleum Geologists, the Society of Petroleum Evaluation
Engineers, the Society of Exploration Geophysicists, the European Association of Geoscientists
and Engineers, and the Society of Petrophysicists and Well Log Analysts.
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END
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