Baron Oil Plc (LON:BOIL) has announced a proposed assignment of a 15% working interest in the TL-SO-19-16 Production Sharing Contract, offshore Democratic Republic of Timor-Leste to TIMOR GAP Chuditch Unipessoal Lda., the existing Joint Venture partner on the PSC and a wholly owned subsidiary of TIMOR GAP E.P. the Timor-Leste National Oil and Gas Company.
Baron’s wholly owned subsidiary, SundaGas Banda Unipessoal Lda. has entered into a Memorandum of Understanding with TIMOR GAP, which details the proposed Farm-Up. The terms of the MOU constitute a binding obligation on the Parties to enter into the Farm-Up, subject to and conditional on the satisfaction of two Conditions Precedent, as described below.
The Directors consider that the Farm-Up by TIMOR GAP will have a value to Baron of approximately US$8.5 million in reimbursement for prior costs and in the offset of future spend. Furthermore, the Directors believe that the Timor-Leste Government’s validation and commitment will both support and progress our preparations for the planned Chuditch-2 appraisal well as well as advance our financing plans for Chuditch-2, where discussions continue with other potential funding partners.
