Baron Oil plc (LON:BOIL) Chief Executive Officer Dr. Andy Butler caught up with DirectorsTalk for an exclusive interview to discuss the proposed name change, the Chuditch project, funding of the drilling, additional projects, and what we can expect from the company this year.
Q1: Andy, Baron Oil just announced annual results for 2023 and an operational update and within these, you’ve announced a proposal to change the company name to Sunda Energy. Could you just explain for us why you’ve chosen this name and how it fits with the company’s focus and strategy?
A1: I guess I’d say first of all is that this is a company that’s going through quite a lot of change, with recent change of board and we’ve been focusing away from areas where we have been active previously and focusing exclusively on Southeast Asia, where we have an anchor asset in Timor-Leste called Chuditch, but also a region here where we see very strong macro fundamentals for growing a business and a gas-based business.
So, really what we wanted to do by changing the name was underline that change in focus. We’re essentially becoming a new company in many ways and the new company name reinforces that.
This is a region where we see great potential to take our business forward. One focus on gas, as I say, one where the demand for gas in the economies around us remains very strong, where gas is an important transition fuel, hopefully displacing coal, and oil for electricity generation. So, one where we see that we have great strengths here, we have a lot of competitive advances, we have good reputation and we can see that we can really take this business forward.
The name change is a positive statement, an exciting statement to say that we are now unambiguously a company focused on this region and hopefully people share our enthusiasm for that and you’ll be seeing a lot more.
So, we’re looking forward to asking shareholders to accept that proposed name change in a few weeks’ time.
Q2: As you mentioned, the company is currently purely focused on Chuditch project, offshore Timor-Leste. Now, it has plans to drill the Chuditch-2 appraisal well, can you just update us on the preparations for this well? What influenced the target for Q1 2025 for drilling operations rather than late 2024, and how that affects the overall project schedule?
A2: So, our plans are going well and we’ve made some announcements along that and we’re giving an operational update today of course.
We completed our site survey a month or two back and we have a full in-house drilling team who are focused purely on preparations for that well. We have a lot of workshops and interactions with our partner TIMOR GAP and with the regulator ANP around all aspects of logistics and planning and approvals required for that well.
We are making significant progress in terms of accessing the materials that are needed. We’ve got long lead items that take a long time to be delivered and that could be the casing if you like, the lining for a well, various other things that go with it, the drill bits that come along etc. We’re in the process of doing all of that.
We are of course in negotiations with the rig contractor to access the drilling rig that we wish to use and equally that’s going well and discussions that are both commercial and technical in nature, and we see that moving forward nicely.
It’s not the case that we’re targeting a spud of the well in early 2025 rather than 2024, it’s just the reality that operators other than ourselves that are looking to use the same drilling rig in the near future, their plans change as well, they evolve and so the date that we’ve put out as being early 2025 now, rather than late 2024, is just a reflection of other operators.
It’s nothing that’s changed in our camp and indeed our team are continuing to prepare with a potential commencement date in late 2024, the same targets that they were set previously. It’s just what we’ve expressed now is there’s the reality of the situation that the availability of the drilling unit that we wish to use has probably slipped back a little bit. That’s what happens in this business but we’re talking just a shortish period of time.
Q3: Now, I know you’re in discussions with additional parties to assist with funding the drilling, are you happy with how these discussions are progressing?
A3: Yes, we are indeed in discussions with a number of parties around participation in the well, investing into this project in different ways. Those negotiations are complex and it takes some time but we are making good progress and I’m reasonably happy with how that’s progressing. I do see that we’re moving forward at a nice pace in the various discussions that we’re having. I don’t see any significant delays expected in front of us around that.
I obviously can’t say a great deal on this subject but we are making progress and that progress continues in parallel to the drilling operations planning that we’re carrying out with confidence. Myself and my board colleagues don’t see any reasons why we don’t continue to move forward quickly whilst we conclude some of those third-party discussions.
Q4: You’ve stated the focus is now firmly on gas in Southeast Asia. Can we expect additional projects to be added to the company and if so what sort of projects are of interest?
A4: Well, absolutely. The focus is on this region and it is on gas in this region for the reasons I’ve been describing. Actually, I should mention we put out a company presentation today with a bit more information around that and there will be more information in due course, and the new company name will come with a new website with further information around the opportunities that we see in the region.
Our focus is absolutely on Chuditch but we do look beyond the successes in Chuditch to where we may grow the business further. Having operated personally and my colleagues having worked in this region for a long time, having got to see a lot of assets, a lot of opportunities in various stages of their maturity, we see a pretty interesting pipeline of things that we could do and things that we’re already starting to take something of a look at whilst remaining very, very focused on delivery at Chuditch.
The nature of assets, as I say the focus is on gas because we believe there’s great value in gas, there’s a good need for gas in this market, and it could be a variety of styles of asset, I won’t say much more at this stage. It’s an interesting arena to be operating in and the alignment with government in enabling you to take assets forward once you’re working with them is a really encouraging factor that influences our choice of the style of asset that we work with.
Q5: Just before we go, is there anything else that you’d like to add on what we can expect to see from Baron Oil or should I say Sunda Energy this year?
A5: In the last few months, I think you’ve seen quite a lot of change in the company and now what will be Sunda. We are very driven as a new board, as a new team and around our assets in Chuditch, around taking this business forward in Southeast Asia. There will be a lot more news flow going into the later parts of the year, particularly in preparations for drilling and everything around it.
The next step is our annual general meeting in a few weeks’ time where we’ll be asking for approval for the name change and various other things, everything that we’ve been talking about here in terms of delivery on Chuditch, other things that we might be doing and the continued transformation of this business.
Hopefully, it’ll be an interesting story to continue to watch and one that works out for everybody.
