TIDMBOIL
RNS Number : 7915D
Baron Oil PLC
24 October 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310.
24 October 2022
Baron Oil Plc
("Baron", or the "Company")
Chuditch PSC Update
Significant increases in management's aggregate Gas-in-Place and
Recoverable Gas Resource estimates
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration
and appraisal company, is pleased to provide a further update on
the TL-SO-19-16 Production Sharing Contract, offshore Timor-Leste
("Chuditch", the "Chuditch PSC" or "PSC") and the preliminary
interpretation of the reprocessed Chuditch 3D seismic data.
Chuditch Highlights
-- Best case aggregate gross Gas-In-Place estimate of
approximately 5,500 BCF versus an equivalent estimate of 3,889 BCF
prior to 3D seismic data reprocessing
-- Best case Recoverable Resource estimate of 3,625 BCF, using
preliminary gas recovery factors of between 50% and 75%, versus an
equivalent estimate of 2,924 BCF prior to 3D seismic data
reprocessing
-- Chuditch-1 gas discovery best case Recoverable Resource
estimate of 1,350 BCF is materially larger and may independently
represent a Liquefied Natural Gas ("LNG") scale resource
-- ERCE engaged to prepare a Competent Person's Report ("CPR") -
potential for contingent resources to be assigned to the Chuditch-1
discovery
-- Chuditch SW prospect Gas-In-Place estimate has increased, but
greater structural complexity may imply a lower recovery factor
-- Extension of sizable Chuditch NE Lead onto 3D seismic data area confirmed
-- The previously unevaluated 'Quokka' Lead extends onto the 3D seismic data area
Technical Update
Preliminary interpretation of the Chuditch PSC reprocessed 3D
seismic data is leading to significant increases in management's
aggregate Gas-in-Place and Recoverable Gas Resource estimates (the
"Update") compared to the previous independent Prospective Resource
estimates by THREE60 Energy (the "2021 Report", 14 July 2021).
The preliminary interpretation has led to a significant uplift
in seismic imaging quality and has significantly reduced subsurface
risk. Mapping indicates a greater concentration of resources into
the Chuditch-1 discovery in a simplified and robust structure with
relatively high gas recovery expected. The adjacent prospectivity
has evolved; its understanding is now more robust, including
confirmation of leads extending onto the 3D seismic data area.
Consultancy group ERCE has been engaged to prepare a CPR to
provide an independent validation of Baron's internal resource
estimates to a SPE PRMS compliant standard, which will include a
probabilistic estimate of Resources and revised risk factors.
Revised Gas-in-Place and Recoverable Gas Resource estimates,
gross for the Chuditch PSC, are detailed in the table below:
Previous Resource Estimates Current Provisional in-house
Probabilistic Best Cases Deterministic Best Case Estimates
Gross Attributable to Licence (2)
Gas BCF Gross Attributable to Licence
Gas BCF
Status Gas-in-Place Recovery Prospective Gas-in-Place Recovery Recoverable
(2) Factor Resource (2, 3, 4) Factor Gas (2,
(1) 3, 4)
------------- -------------- --------- ------------
Chuditch-1
Discovery 951 75% 713 1,800 75% 1,350
------------- ------------ -------------- --------- ------------
Chuditch
West Prospect 540 405 merged into Chuditch-1 Discovery
------------- ------------ ---------------------------------------
Chuditch
North Prospect 473 355 not present on improved data
------------- ------------ ---------------------------------------
Chuditch
NE Lead(5) 1,293 970 1,950 67% 1,300
------------- ------------ -------------- --------- ------------
Chuditch
SW Prospect 642 482 1,150 50% 575
------------- --------- ------------ -------------- --------- ------------
Quokka lead
(5) not evaluated 600 67% 400
-------------------------------------- -------------- --------- ------------
Aggregate 3,899 75% 2,924 5,500 65.9% 3,625
------------- --------- ------------ -------------- --------- ------------
SundaGas Banda Unipessoal Lda. ("SundaGas"), a wholly owned
subsidiary of Baron, is the operator of the Chuditch PSC and holds
a 75% effective interest in the Chuditch PSC. Revised Gas-in-Place
and Recoverable Gas Resource estimates, net attributable to Baron,
for the Chuditch PSC are therefore as detailed in the table
below:
Previous Resource Estimates Current Provisional in-house
Probabilistic Best Cases Deterministic Best Case Estimates
Net Attributable to Baron (2)
Gas BCF Net Attributable to Baron
Gas BCF
-----------------
Status Gas-in-Place Recovery Prospective Gas-in-Place Recovery Recoverable
(2) Factor Resource (2, 3, 4) Factor Gas (2,
(1) 3, 4)
------------- --------- ------------ -------------- --------- ------------
Chuditch-1
Discovery 713 75% 535 1,350 75% 1,013
------------- ------------ -------------- --------- ------------
Chuditch
West Prospect 405 304 merged into Chuditch-1 Discovery
------------- ------------ ---------------------------------------
Chuditch
North Prospect 355 266 not present on improved data
------------- ------------ ---------------------------------------
Chuditch
NE Lead(5) 970 727 1,462 67% 975
------------- ------------ -------------- --------- ------------
Chuditch
SW Prospect 482 361 863 50% 431
------------- --------- ------------ -------------- --------- ------------
Quokka lead
(5) not evaluated 450 67% 300
-------------------------------------- -------------- --------- ------------
Aggregate 2,924 75% 2,193 4,125 65.9% 2,718
------------- --------- ------------ -------------- --------- ------------
Notes
1: Volume estimates use definitions and guidelines set out in the
2018 Petroleum Resources Management System prepared by the Society
of Petroleum Engineers (SPE PRMS)
2: Not SPE PRMS compliant*
3: Condensate yield
not included
4: Rounded deterministic technical best cases
5: Chuditch NE & Quokka: partial 3D seismic coverage
Other Chuditch PSC Matters
PSC Extension
As announced on 18 October 2022, SundaGas was granted a
six-month extension to Contract Year Two of the PSC which now
expires on or before 18 June 2023.
Development and gas commercialisation
As the preliminary subsurface interpretation is indicating an
uncomplicated structural configuration for Chuditch, and subject to
an ongoing revision of the Chuditch engineering concept study, a
simpler field development concept is likely. The apparent increase
in gas resources in the Chuditch-1 discovery itself suggests that a
single appraisal well will suffice to determine commerciality of
the project without the need for immediate follow-on exploration
wells.
Multiple potential export solutions for gas have been previously
identified which are not dependent on any single concept or route.
The fastest development and export option is expected to be to
utilise a hybrid floating and platform LNG system, which does not
require export pipelines or border crossings.
A revision of the Chuditch engineering concept study has
commenced. It is anticipated that this work will illustrate and
quantify a fast-track development pathway that targets first
production in 2028.
Management estimates of project economics continue to be
attractive at current and long term average gas prices in Asia.
Development strategies for handling carbon dioxide could include
Carbon Capture and Storage ("CCS") at Bayu-Undan or for disposal
within the Chuditch PSC. SundaGas aspires to achieve net zero LNG
through long term supply arrangements with buyers that have an
effective Scope 3 strategy.
Farmout
The Company continues to evaluate options to secure further
investment for the Chuditch project, including an ongoing farmout
process, which is accelerating with the availability of the revised
interpretation. The Company remains in talks with multiple
potentially interested parties.
The combination of the PSC extension, availability of the new
reprocessed 3D seismic data, and the external validation of
Resources that are to be provided via the CPR will be of
significant benefit to this process as we move into 2023.
Investor Webinar
Baron will hold an investor webinar for existing and potential
shareholders at 6.00 p.m. (London time) on 26 October 2022.
Those wishing to attend should register via the following link
after which they will be provided with log in details:
https://us02web.zoom.us/webinar/register/WN_B-Rp7LJDRbGzCLh8IqIkag
There will be the opportunity for participants to ask questions
at the end of the presentation. Questions can also be emailed to
baronoil@investor-focus.co.uk ahead of the presentation.
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 Broker
Alex Brearley, Nick Harriss, Nick Athanas (Corporate
Finance)
Kelly Gardiner (Sales and Corporate Broking)
IFC Advisory Limited +44 (0) 20 3934 6630
Financial PR and IR baronoil@investor-focus.co.uk
Tim Metcalfe, Florence Chandler
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining
and Oil and Gas Companies ("AIM MOG"), 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 40 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' SPE PRMS standard.
* The Update supplements the previous SPE PRMS compliant 2021
Report. However, the Update has not been prepared to the standards
set forth in the SPE PRMS or in accordance with an appropriate
Standard as set out in the AIM MOG Note. The CPR commissioned by
the Company will be SPE PRMS compliant.
The updated Gas-in-Place and Recoverable Resource estimates
included in the Update are not directly comparable to those in the
2021 Report or those required under SPE PRMS.
Glossary
BCF Billion cubic feet
Gas-in-Place Volume of natural gas estimated to exist originally in naturally
occurring reservoirs
LNG Liquefied natural gas
MMBtu Million British thermal units
Prospective Resource 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
Recoverable Gas Resource or Recoverable Resource Quantities of gas which are estimated to be potentially recoverable
from discoveries, prospects
and leads
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. Quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations
by application of future development projects. The total quantity of
petroleum that is 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
TCF Trillion cubic feet
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END
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