Colter and Wick Update

RNS Number : 6313V

Baron Oil PLC

25 July 2018

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

25 July 2018

Baron Oil Plc

("Baron Oil" or "the Company")

Baron to increase working interest in UKCS licence P1918 (Colter Prospect)

AFEs signed for Colter and Wick wells

Baron Oil (AIM: BOIL) provides an update on the proposed drilling of the Colter and Wick wells, on UK Continental Shelf Licence P1918 (UKCS Block 98/11a) and P2235 (UKCS Block 11/24b) respectively.

Colter well (increase from 5% to 8% working interest)

The Company announces that it has agreed to an amendment of the Farmout Agreement with Corallian Energy Limited ("Corallian") under which it will now earn an 8% working interest in UK Continental Shelf Licence P1918, which contains the Colter Prospect. The Colter well is planned to be drilled in the fourth quarter of 2018, subject to regulatory approvals, following the Wick well. Under the amended terms of the Farmout Agreement with Corallian, and subject to the necessary consents, the Company will fund 10.67% of the costs related to the Colter well, capped on a pro-rata basis at a gross cost of £8.0 million. Any incremental costs above this cap will be funded by the Company at 8%.

An Authorisation for Expenditure ("AFE") for the Colter well has now been signed for a total estimated cost of £7.5 million on a dry hole basis, including £0.4 million of back costs (a total of £0.8 million net to Baron).  

Wick well (15% working interest)

In addition, an AFE with a total estimated cost of £5.7m on a dry hole basis, including £0.5 million of back costs (a total of £1.1 million net to Baron), has been signed for the drilling of the Wick well. The Company will fund 20% of the costs related to the Wick well, capped on a pro-rata basis at a gross cost of £4.2m, with the incremental costs above this cap funded by the Company at 15%. The current target for commencement of drilling of the Wick well on UK Continental Shelf Licence P2235 is September 2018, subject to regulatory approvals. 

Malcolm Butler, Chairman and CEO of Baron commented:

"We are pleased to have moved each of the Colter and Wick wells to a committed AFE stage. We note that costs have increased as final estimates of rig and service rates have been obtained and the Joint Venture will maintain pressure on the drilling management team to deliver the wells within the new budget limits. Both of these wells are material drill targets for Baron and we are delighted to have had the opportunity to increase our Working Interest in the Colter Well to 8%."

Competent Person's Statement

Pursuant to the requirements of the AIM Rules for Companies, the technical information and resource reporting contained in this announcement has been reviewed by Dr Malcolm Butler BSc, PhD, FGS, Chairman & Chief Executive Officer of the Company. Dr Butler has more than 45 years' experience as a petroleum geologist.  He has compiled, read and approved the technical disclosure in this regulatory announcement.  The technical disclosure in this announcement complies with the Society of Petroleum Engineers standard.

For further information, please contact:

Baron Oil Plc	[phone]
Malcolm Butler, Chairman & Chief Executive Officer
SP Angel Corporate Finance LLP	[phone]
Nominated Adviser and Joint Broker
Lindsay Mair, Richard Hail, Richard Redmayne

 

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