RNS Number : 0218J
Baron Oil PLC
18 August 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
18 August 2021
Baron Oil Plc
("Baron" or the "Company")
Increase in interest in Licence P2478
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration
company, is pleased to announce an increase in its interest in
United Kingdom Offshore Licence P2478 from 15% to 32%, conditional
on approval from the UK Oil and Gas Authority ("OGA").
-- More than doubling of Baron's interest, to 32%, in the prospective Dunrobin area
-- Dunrobin evaluated as one of the few remaining sizeable undrilled UK North Sea targets
-- Accelerated seismic reprocessing is now due for delivery in
early 2022 ahead of engagement with potential drilling partners
-- Builds on earlier work sharing agreement which enhanced petroleum geology understanding
Innovate Licence P2478 (the "Licence") was awarded in September
2019 to Corallian Energy Limited ("Corallian"; Operator, 45%);
Upland Resources (UK Onshore) Limited ("Upland"; 40%); and Baron
(15%). The Licence's current phase modest work commitment is to
undertake reprocessing of legacy 2D and 3D seismic data and perform
other 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 in July 2023.
Covering blocks 12/27c, 17/5, 18/1 and 18/2 in the Inner Moray
Firth area of the North Sea, the Licence contains the prospective
Dunrobin area which consists of large shallow rotated fault blocks
which are mapped mostly on 3D seismic data including candidate
direct hydrocarbon indicators. Well costs are expected to be modest
at c. GBP7 million gross as the prospect lies in shallow water of
less than 100 metres and the total drilling depth of the well is
prognosed to be approximately 660 metres.
Dunrobin is evaluated by Baron to be one of the few remaining
targets yet to be drilled in the UK North Sea with estimated gross
mean prospective resources of the order of 100 MMbbl (a non-SPE
PRMS compliant estimate).
In Q1 2021, the joint venture partners received the results of
technical studies from a large European E&P company under a
work sharing agreement, which enhanced the partners' understanding
of the petroleum geology and corroborated their view of Dunrobin as
a potentially attractive and substantial target.
Farm In Agreement
In order to build on work already undertaken on the Licence and
to accelerate progress, existing partners Corallian and Upland have
signed an agreement whereby Baron will increase its interest in the
Licence from 15% to 32% in exchange for paying 100% of the costs of
the remaining Phase A work commitments up to a cap of GBP160,000
(the "Agreement"). Under the terms of the Agreement all other
costs, including, inter alia, licence and OGA fees and the
Operator's administrative expenses, will be borne by all of the
partners proportionate to their revised interests. Corallian will
remain the Licence's Operator with Baron assuming the role of
technical overseer of the remaining Phase A work commitments. No
consideration is payable to Corallian or Upland under the
Commencement of the outstanding Phase A technical work
commitments is due shortly with the key component, that of 3D
seismic reprocessing, expected to be delivered early in 2022. The
Board believes that this will provide the partners sufficient time
to mature the Dunrobin Prospect and to engage with potential
drilling partners in due course.
On completion of the Agreement, the revised interests held in
the Licence will be as follows:
-- Corallian 36%;
-- Upland 32%; and
-- Baron 32%.
The Agreement is subject to the consent of the OGA.
Jon Ford, Technical Director of Baron commented...
"This Agreement, in keeping with our corporate strategy, more
than doubles Baron's interest in the prospective Dunrobin area at a
modest cost, whilst at the same time accelerating the subsurface
evaluation towards a decision regarding the potential drilling of
an exploration well evaluated to have a sizeable resource target.
The 3D seismic reprocessing is aimed at reducing the range of
volumetric uncertainty and subsurface risk, as well as providing
drilling location candidates, during 2022."
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'
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
Kelly Gardiner (Sales and Corporate Broking)
Turner Pope Investments (TPI) Limited +44 (0) 20 3657 0050
IFC Advisory Limited +44 (0) 20 3934 6630
Financial PR and IR
Tim Metcalfe, Florence Chandler
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.
MMbbl Million barrels of oil.
Prospective resources Quantities of petroleum that are estimated to exist originally in naturally occurring
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
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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