TIDMBOIL
RNS Number : 2161R
Baron Oil PLC
28 February 2023
The information contained within this announcement is deemed by
the Company to constitute inside information pursuant to Article 7
of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended.
28 February 2023
Baron Oil Plc
("Baron", or the "Company")
Competent Person's Report on the Chuditch PSC
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration
and appraisal company, is pleased to announce that a copy of a
Competent Person's Report ("CPR") prepared by ERC Equipoise Pte Ltd
("ERCE") on the offshore Timor-Leste PSC TL-SO-19-16 ("Chuditch
PSC"), can be viewed
here:http://www.rns-pdf.londonstockexchange.com/rns/2161R_1-2023-2-27.pdf
and will be published in due course on the Company's website at:
www.baronoilplc.com . Baron has a 75% operated effective interest
in the Chuditch PSC, which is operated by its wholly owned
subsidiary SundaGas Banda Unipessoal Lda ("SundaGas") and contains
the Chuditch-1 gas discovery and offset analogous prospects.
The CPR has been prepared in accordance with the June 2018
Petroleum Resources Management System ("SPE PRMS") as the standard
for reporting. A summary of the gross and net Prospective and
Contingent Resources, prepared on a probabilistic basis, is given
in the tables below.
Key Points from the CPR
-- Contingent Resources assigned to Chuditch-1 discovery*
-- ERCE estimates that Chuditch-1 discovery contains 1,084 Bscf
gross Pmean Contingent gas Resources attributable to the
licence
-- Aggregated** gross Pmean Prospective gas Resources attributable to the licence of 1,562 Bscf:
o Chuditch SW prospect estimated to contain 675 Bscf gross Pmean
Prospective gas Resources when aggregated** across two segments,
Alpha and Beta, with respective Geological Chances of Success
("GCOS") of 52% and 45%;
o Chuditch NE prospect estimated to contain 744 Bscf gross Pmean
Prospective gas Resources with a GCOS of 30%; and
o Quokka prospect estimated to contain 143 Bscf gross Pmean
Prospective gas Resources with a GCOS of 26%.
-- Oil equivalent** Pmean Resources net to the Baron working
interest, including the condensate yield, calculated by the Company
to be:
o 140 MMboe Contingent for Chuditch-1; and
o 202 MMboe Prospective, when aggregated**
*A chance of development has not been estimated for the
Chudich-1 discovery.
**The CPR reports gas and condensate Contingent and Prospective
Resources separately per discovery and prospects. Aggregation and
oil equivalent calculations performed by Company. See Glossary
below for basis of calculation.
Management Commentary
The assignment of Contingent Resources to the Chuditch-1
discovery, built on the extensive technical studies completed by
the Company, sets the foundation for the next stage of the project
cycle. This phase would typically include an appraisal well,
pre-feasibility studies, Environmental Impact Assessment planning,
and preliminary work on gas sales arrangements. Management believes
that the Chuditch-1 Pmean Contingent Resources, now independently
assessed, are likely to be sufficiently large to be economically
viable to be developed standalone or in parallel with other
developments in the region.
Management's probabilistic estimates of gross gas Prospective
Resources for the Chuditch SW, NE, and Quokka prospects, as set out
below, differ from ERCE's estimates, mainly through the Company's
preferred use of the latest reprocessed seismic data velocity model
to define the extent of the prospects. Further technical discussion
regarding these differences can be found in Appendix 1 of the
CPR.
Management notes that in its previous announcements the Company
referred to both Chuditch NE and Quokka informally as "Leads", due
to parts falling outside of 3D seismic coverage, whereas ERCE
describe them as "Prospects", terminology which the Company has now
adopted. This increase in maturity towards being drillable features
is accompanied by a more conservative view on the probabilistic
Prospective Resources estimation being taken by ERCE. Further, in
the Company's announcement of 24 October 2022, the basis for in
house estimation was as "Deterministic Best Case", whereas
estimates presented in this announcement are "Probabilistic" which
introduces ranges of uncertainty on all contributing subsurface and
recovery factors, including the degree to which 3D seismic coverage
is not currently available on Chuditch NE and Quokka. Deterministic
Best Case and Probabilistic estimates are not therefore directly
comparable.
-- Baron's own Pmean estimates of gross unrisked Prospective
Resources aggregate to 2,128 Bscf***:
o Chuditch SW 855 Bscf***, with a low to high estimate range
from 420 to 1,284 Bscf*** and a GCOS of 40%;
-- Baron considers that SW represents a relatively low risk
follow on to a Chuditch-1 appraisal well;
o Chuditch NE 863 Bscf***, with a low to high estimate range
from 311 to 1,401 Bscf*** and a GCOS of 34%; and;
o Quokka 410 Bscf***, with a low to high estimate range from 110
to 733 Bscf*** and a GCOS of 26%.
Aggregate oil equivalent Pmean Prospective Resources net to the
Baron working interest, including the condensate yield, are
estimated by the Company to be 366 MMboe**, representing a
significant follow-on portfolio to be explored. Management
estimates of the Geological Chance of Success for the prospects are
in reasonable agreement with ERCE's estimates, indicating the
relatively low risk nature of the Prospective Resources
assessment.
*** Not SPE PRMS compliant. However, management believes that
its in-house estimates of Prospective Resources, although not
independently verified to SPE PRMS, are based on best industry
practice by employing the latest reprocessed seismic data velocity
model.
TIMOR GAP announcement on development of the Greater Sunrise
fields
Management notes that offshore Timor-Leste the Sunrise Joint
Venture (TIMOR GAP 56.56%; Operator, Woodside Energy 33.44%; Osaka
Gas Australia 10.0%) announced on 6 February 2023 that it will
undertake a concept select program for the development of the
Greater Sunrise fields, including the location of gas delivery,
processing and onward LNG sales, which management believes has
potential positive impacts on the export options for the
development of the Chuditch-1 gas discovery (See Section 3.5 of the
CPR - Development Plans - for more detail).
TIMOR GAP's press release can be found here:
https://www.timorgap.com/newsroom/press-releases/sunrise-joint-venture-to-undertake-concept-select-with-a-strong-focus-on-delivery-of-gas-to-timor-leste/
.
Jon Ford, Technical Director of Baron, commented:
"The independent assessment of approximately 1.1Tscf of gross
Pmean Contingent Resources for the Chuditch-1 discovery is a major
milestone, underpinning the potential commercial viability of the
asset and highlighting its attractions to potential future
participants in the Chuditch project.
"Following the recent fund-raise we have a well-funded balance
sheet for current operations, with current work commitments on both
the Timor-Leste and UK P2478 assets largely complete. Our focus now
is on assessing the viability of drilling for both a Chuditch
appraisal well in Timor-Leste and a Dunrobin West exploration well
in the UK."
Contingent and Prospective Resources
The tables below summarise ERCE's independent assessment of
Gross Contingent and Prospective Resources as at the CPR's
effective date of 31 January 2023, from which are derived the Net
Contingent and Prospective Resources attributable to Baron's 75%
net working interest, wholly within the Chuditch PSC licence area.
Totals are by arithmetic summation by the Company.
Contingent Resources
ERCE attributes the Contingent Resources associated with the
Chuditch-1 discovery to the sub-class Development Unclarified. The
Chuditch discovery Development Unclarified Contingent Resources are
contingent on the drilling and testing of an appraisal well, the
Operator finalising a commercially viable development plan and the
Operator being able to fund and execute this development plan,
including obtaining partner and regulatory consents to the
appropriate facilities.
Contingent Gross Attributable to Net Attributable to Risk Operator
Resources Licence Baron Oil Factor
(CoS)
------------ ------------------------------------------- ------------------------------------------- ------- ---------
Low Best High Mean Low Best High Mean
Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate
------------ ------- ---------
(1C) (2C) (3C) (1C) (2C) (3C)
------------ --------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Gas (Bscf)
--------------------------------------------------------------------------------------------------------------------------
Chuditch-1
Discovery 461 929 1845 1084 346 697 1383 813 n/a SundaGas
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Condensate (MMstb)
--------------------------------------------------------------------------------------------------------------------------
Chuditch-1
Discovery 1.4 4.1 11.9 5.9 1.1 3.1 9.0 4.4 n/a "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Oil equivalent (MMboe) **
--------------------------------------------------------------------------------------------------------------------------
Chuditch-1
Discovery 78 159 319 187 59 119 240 140 n/a "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Notes:
1. Gross Contingent Resources attributable to Licence are
limited to within PSC TL-SO-19-16 and are based on percentage
on-block of the total Gross Contingent Resources.
2. Net attributable resources are based on a SundaGas working
interest of 75% of the Gross Contingent Resources attributable to
Licence following development and first gas prior to deduction of
any royalties. SundaGas are carrying the costs of the remaining 25%
interest during this phase.
3. Company net entitlement Contingent Resources require a full
economic evaluation which has not been done as part of this CPR and
hence are not presented.
4. There is no geological risk factor (CoS) for Contingent
Resources because the resource has been discovered. The Contingent
Resources have not been risked for chance of development and are
sub-classified as development unclarified.
5. There is no certainty that it will be commercially viable to
develop any portion of the Contingent Resources.
6. Contingent Resources for gas include the removal of inert
gasses.
Prospective Resources
Prospective Gross Attributable to Net Attributable to Risk Operator
Resources Licence Baron Oil Factor
(CoS)
-------------- ------------------------------------------- ------------------------------------------- ------- ---------
Low Best High Mean Low Best High Mean
Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate
-------------- ------- ---------
(1U) (2U) (3U) (1U) (2U) (3U)
-------------- --------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Gas Prospective Resources - Gas (Bscf)
----------------------------------------------------------------------------------------------------------------------------
Chuditch
SW Alpha 139 326 729 394 105 244 547 296 52% SundaGas
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
SW Beta 107 238 505 281 80 179 379 211 45% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
NE 163 516 1556 744 122 387 1167 558 30% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Quokka 27 94 314 143 20 70 236 108 26% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Aggregate**
Gas (Bscf) 436 1174 3104 1562 327 881 2328 1172
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Condensate Prospective Resources (MMstb)
----------------------------------------------------------------------------------------------------------------------------
Chuditch
SW Alpha 0.4 1.4 4.6 2.1 0.3 1.1 3.4 1.6 52% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
SW Beta 0.3 1.1 3.2 1.5 0.3 0.8 2.4 1.1 45% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
NE 0.6 2.3 9.2 4.0 0.4 1.7 6.9 3.0 30% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Quokka 0.1 0.4 1.8 0.8 0.1 0.3 1.4 0.6 26% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Aggregate**
Condensate
(MMstb) 1.4 5.2 18.8 8.4 1.1 3.9 14.1 6.3
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Oil equivalent Prospective Resources (MMboe)
----------------------------------------------------------------------------------------------------------------------------
Chuditch
SW Alpha 24 56 126 68 18 42 95 51 52% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
SW Beta 18 41 87 48 14 31 66 36 45% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
NE 28 88 269 128 21 66 201 96 30% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Quokka 5 16 54 25 3 12 41 18 26% "
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Aggregate**
Oil
equivalent**
(MMboe) 74 201 536 269 56 151 402 202
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Notes:
1. Gross Prospective Resources attributable to Licence are
limited to within PSC TL-SO-19-16 and are based on percentage
on-block of the total Gross Prospective Resources.
2. Net attributable resources are based on a SundaGas working
interest of 75% of the Gross Prospective Resources attributable to
Licence following development and first gas prior to deduction of
any royalties. SundaGas are carrying the costs of the remaining 25%
interest during this phase.
3. Company net entitlement to Prospective Resources requires a
full economic evaluation which has not been done as part of this
CPR and hence are not presented.
4. The geological chance of success (COS) is an estimate of the
probability that drilling the prospect would result in a discovery
as defined under SPE PRMS 2018 guidelines.
5. In the case of Prospective Resources, there is no certainty
that hydrocarbons will be discovered, nor if discovered will be
commercially viable to produce any portion of the resources.
6. These are unrisked Prospective Resources that have not been
risked for chance of development.
7. Prospective Resources for gas include the removal of inert
gasses.
** Aggregation of P90, P50, and P10 values is not statistically
correct but has been shown for illustrative purposes. Aggregation
of Mean values is statistically correct. Aggregates have been
calculated by Baron and may not sum exactly due to rounding
factors. Mean is defined as the arithmetic average of all outcomes
in a probabilistic assessment of Contingent or Prospective
Resources. Oil equivalence (MMboe) calculation has been provided by
Baron for reference for the purposes of this announcement. See
Glossary below for basis of calculation.
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.
Basis of preparation
The Prospective and Contingent Resources estimates within this
announcement have been prepared on a probabilistic basis and unless
indicated otherwise comply with the standards set forth in the SPE
PRMS. The probabilistic Prospective and Contingent Resources
estimates within this announcement are not directly comparable to
management's provisional in-house estimates of Gas-in-Place or
Recoverable Gas Resources, as announced by the Company on 24
October 2022, which were prepared on a deterministic basis and not
to the standards set forth in the SPE PRMS or in accordance with an
appropriate Standard as set out in the AIM MOG Note.
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, George Payne (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
Glossary
Bscf Billion standard cubic feet of gas.
Best Estimate ( 2U) Denotes the mid estimate qualifying as Prospective Resources.
Reflects a volume estimate that
there is a 50% probability that the quantities actually recovered
will equal or exceed the
estimate.
Best Estimate ( 2C) Denotes the mid estimate qualifying as Contingent Resources.
Reflects a volume estimate that
there is a 50% probability that the quantities actually recovered
will equal or exceed the
estimate.
Contingent Resources Those quantities of petroleum estimated, as of a given date, to be
potentially recoverable
from known accumulations by application of development projects,
but which are not currently
considered to be commercially recoverable owing to one or more
contingencies.
Gas-in-Place Volume of natural gas estimated to exist originally in naturally
occurring reservoirs.
Geological Chance of Success , CoS or Risk factor The geological chance of success (COS) is an estimate of the
probability that drilling the
prospect would result in a discovery as defined under SPE PRMS 2018
guidelines.
High Estimate (3U) Denotes the high estimate qualifying as Prospective Resources.
Reflects a volume estimate
that there is a 10% probability that the quantities actually
recovered will equal or exceed
the estimate.
High Estimate ( 3C) Denotes the high estimate qualifying as Contingent Resources.
Reflects a volume estimate that
there is a 10% probability that the quantities actually recovered
will equal or exceed the
estimate.
LNG Liquefied natural gas
Low Estimate (1U) Denotes the low estimate qualifying as Prospective Resources.
Reflects a volume estimate that
there is a 90% probability that the quantities actually recovered
will equal or exceed the
estimate.
Low Estimate (1C) Denotes the low estimate qualifying as Contingent Resources.
Reflects a volume estimate that
there is a 90% probability that the quantities actually recovered
will equal or exceed the
estimate.
Mean or Pmean 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
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.
MMstb Millions stock tank barrel
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.
Recoverable Gas Resource Quantities of gas which are estimated to be potentially recoverable
from discoveries, prospects
and leads
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.
Tscf Trillion standard cubic feet of gas.
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