Baron Oil Plc (LON:BOIL), the AIM-quoted oil and gas exploration and appraisal company with projects in SE Asia and the UK, has announced that at the Annual General Meeting of the Company to be held later today, the Company’s Non-Executive Chairman, John Wakefield, will make the following statement:
SE Asia: Timor-Leste, offshore TL-SO-19-16 PSC (“Chuditch”) – Baron 75%; TIMOR GAP 25%
Technical and commercial progress on the Chuditch asset has continued apace since the start of the year. The publication of the Competent Person’s Report (CPR) prepared by ERC Equipoise Pte Ltd in February was a significant milestone in the technical evaluation of the asset. The CPR attributed approximately 1.1 Tcf of gross Pmean Contingent Gas Resources to the Chuditch-1 discovery (approximately 813 Bcf net to Baron, equivalent to 135MM barrels of oil). These discovered resources, when aggregated with the significant Prospective Resources in adjacent prospects, means that more than 2.6 Tcf of gas resources have been identified within the PSC on a gross Pmean basis.
Current technical activities are focused on further detailed interrogation of our data to identify optimal candidate locations for appraisal drilling, including additional geophysical work and environmental impact studies. The results will be input into detailed well planning. Discussions are being held with drilling contractors, to be well placed to expedite appraisal activities through 2024.
The recent granting of a six-month extension to the current contract year of the Chuditch PSC provides Baron’s SundaGas subsidiary with additional time to continue these pre-drill preparatory activities. The extension was approved within three weeks of its formal request, illustrating the strong support from the Ministry of Petroleum, ANPM and TIMOR GAP for our efforts to progress the Chuditch project.
Baron continues efforts to attract funding partners and investors to jointly participate in a Chuditch appraisal well and other future activities. The project attracts interest, particularly with players with a close understanding of the Asia Pacific gas markets, as a candidate shallow-water gas development of scale. We look forward to providing more information around funding plans and potential partners when we are able to do so.
United Kingdom: Offshore Licence P2478 – Reabold Resources (Licence Administrator) 36%; Baron 32%; Upland Resources 32%
All Phase A technical studies, with Baron’s involvement, were completed earlier this year on the P2478 licence situated in the Inner Moray Firth. The CPR delivered by the RPS Group in February was, similarly, a significant milestone, confirming the Dunrobin West prospect as a large, shallow, simple structure where an exploration well could target an aggregate of 119 MMboe gross unrisked Pmean Prospective Resources: this includes the estimated 71 MMbbl gross Pmean Prospective Resource at a geological Probability of Success of 34% for the primary Jurassic target.
As the current phase of the licence draws to a close the Joint Venture is actively engaged with the North Sea Transition Authority (“NSTA”) with a view to extending Phase A of the Licence. Feedback received from potential funding partners encountered during the Joint Venture farmout campaign has been helpful, as we weigh up the various options going forward. One option might include completion of the 3D seismic coverage of Dunrobin West employing data acquisition techniques that maximise the chances of directly characterising the fluid content of the reservoir and hence even further reduce pre-drill risk and volumetric uncertainty.
Baron, as a non-operating partner, submitted an application in the 33rd Round of UK offshore licensing for a significant stake in a material prospect with modest initial work commitments located in a proven prospective fairway. Recently the technical interview with the NSTA was attended, during which the NSTA indicated that any offer would be made before the end of 2023.
We are continuously evaluating and pursuing other new ventures which meet Baron’s stated corporate strategy.
Our priorities for the second half of 2023 are to make drilling decisions on Chuditch-1 and Dunrobin West. Chuditch has been confirmed as a significant, LNG-scale discovery and bringing a funding partner(s) alongside us will open the door to the long-awaited drilling and anticipated testing of an appraisal well on the Chuditch-1 discovery. In the UK, the outcome of our discussions with the NSTA will guide us through the next steps, where again we are pleased that Dunrobin West has been confirmed as a material oil prospect.
There is a lot to achieve over the coming months, as we look forward to the future with increased confidence.