Competent Person's Report on UK Licence P2478

RNS Number : 0739Q

Baron Oil PLC

16 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.

16 February 2023

Baron Oil Plc

("Baron", or the "Company")

Competent Person's Report on UK Licence P2478 ("Dunrobin")

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 the RPS Group ("RPS") on Dunrobin for Licence Administrator Reabold Resources Plc on behalf of the Joint Venture ("JV"), in which Baron has a 32% non-operated working interest, can be viewed here: http://www.rns-pdf.londonstockexchange.com/rns/0739Q_1-2023-2-15.pdf, and will be published shortly on the Company's website at: www.baronoilplc.com . The Dunrobin licence is situated in the Inner Moray Firth.

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 Resources is given in the table below.

Key Points from the CPR

· 201 mmboe¹ aggregate² gross unrisked Pmean Prospective Resources on licence P2478

· The Dunrobin West prospect ("Dunrobin West") estimated to contain 119mmboe gross unrisked Pmean Prospective Resources aggregated across the Jurassic and Triassic stacked targets³

· 34% Geological Probability of Success (Pg) at Dunrobin West Jurassic primary target with an estimated 71mmbbl (gross) of Pmean Prospective Resources

·   Seismic response at the Jurassic target at Dunrobin West interpreted to be a possible gas cap and a gas oil contact

·   Dunrobin West geologically analogous to the Beatrice field, which produced in excess of 140mmbbl

· Secondary Triassic target included in formal resource assessment for the first time

· The Company has aggregated unrisked net Pmean Prospective Resources in the CPR and estimates Baron's farm up arrangement of August 2021 has increased the Company's share of aggregate unrisked net Pmean Prospective Resources on licence P2478 from 30mmboe to 64mmboe at a capped cost to Baron of £160,000

¹ The CPR reports oil and gas Prospective Resources. The oil equivalent value of the gas resources has been estimated by the Company using a factor of 1 barrel of oil to 6 thousand cubic feet of gas.

2 The unrisked aggregation was performed by the Company and assumes that all prospects at all levels are successful.

3 The unrisked aggregation of Dunrobin West was performed by the Company. The volumes were presented for each reservoir in the CPR and, at the Company's request, were not aggregated probabilistically.

Management Commentary

Management estimates, which differ from RPS mainly in their approach to statistical volumetric estimation, for Dunrobin West for the Jurassic alone remain in excess of Pmean 100mmbbl* gross unrisked Prospective Resources. Dunrobin West has been proposed by the JV to be the location of the first exploration well on the licence. Management believes that a single vertical borehole on Dunrobin West to a total depth of c.800 metres can test both Jurassic and Triassic targets at an estimated gross drilling cost of £8.6 million on a dry hole basis. A farmout campaign to attract additional funding is underway.

Jon Ford, Technical Director of Baron commented…

"We are pleased that the CPR provides independent confirmation for the Company's belief that the western part of the Dunrobin complex has matured into a drillable prospect where a relatively low-cost exploration well can target more than 100 MMbbl* of gross Pmean Prospective Resources with low geological risk. It validates our decision in 2021 to enter into a farm up arrangement which more than doubled our working interest in the licence to a more meaningful 32% by promoting and accelerating the Phase A work programme to a technically high standard at relatively modest cost.

"The publication of the CPR will add impetus and credibility to the ongoing farmout campaign which has already attracted industry interest ."

Technically Recoverable Prospective Resources

The table below summarises RPS's independent assessment of Gross Prospective Resources as at the CPR's effective date of 30 September 2022, from which are derived the Net Prospective Resources attributable to Baron's 32% effective interest, wholly within the P2478 licence areas. Totals are by arithmetic summation.

Prospective Resources	Gross Attributable to Licence				Net Attributable to Baron Oil				Risk Factor (GPoS)	Operator
	Low Estimate	Best Estimate	High Estimate	Mean Estimate	Low Estimate	Best Estimate	High Estimate	Mean Estimate
	(1U)	(2U)	(3U)		(1U)	(2U)	(3U)
Technically recoverable resources - Oil (mmbbl)
Dunrobin West Jurassic	7	42	168	71	2	13	54	23	34%	Reabold Resources North Sea
Dunrobin West Triassic	7	34	98	45	2	11	31	15	12%	"
Dunrobin C&E Jurassic	1	8	67	22	0.4	2	21	7	31%	"
Dunrobin C&E Triassic	1	9	56	22	0.3	3	18	7	14%	"
Golspie Jurassic	4	12	27	14	1	4	9	5	27%	"
Golspie Triassic	7	20	43	23	2	6	14	7	12%	"
Aggregate Oil (mmbbl)	27	125	459	197	8	39	147	64
Technically recoverable resources - Associated & Non-associated Gas (bscf)
Dunrobin West Jurassic	2	7	22	10	0.8	2	7	3	34%	Reabold Resources North Sea
Dunrobin West Triassic	1	4	11	5	0.2	1	3	2	12%	"
Dunrobin C&E Jurassic	0.1	1	7	2	0.04	0.3	2	1	31%	"
Dunrobin C&E Triassic	0.1	1	6	2	0.03	0.3	2	1	14%	"
Golspie Jurassic	0.4	1	3	2	0.1	0.4	1.0	0.5	27%	"
Golspie Triassic	0.8	2	5	3	0.3	0.7	1.5	0.9	12%	"
Aggregate Gas (bcf)	4	16	54	24	1	5	17	8
Oil equivalent (mmboe)
Dunrobin West Jurassic	7	43	172	73	2	14	55	23	34%	Reabold Resources North Sea
Dunrobin West Triassic	7	35	100	46	2	11	32	15	12%	"
Dunrobin C&E Jurassic	1	8	68	22	0.3	3	22	7	31%	"
Dunrobin C&E Triassic	1	9	57	22	0.3	3	18	7	14%	"
Golspie Jurassic	4	12	28	14	1	4	9	5	27%	"
Golspie Triassic	7	20	44	24	2	7	14	8	12%	"
Aggregate Oil equivalent (mmboe)	28	128	468	201	8	42	150	65

Notes:

·     Company has aggregated P90, P50, P10 and Mean values arithmetically. This is not statistically correct, and may not sum exactly due to rounding factors.

· "Gross Attributable" are 100% of the resources attributable to the licence whilst "Net Attributable" are those attributable to Baron's effective interest in the licence (32%) before economic limit test.

· Includes a mix of associated gas and non-associated gas from Dunrobin West Gas Cap, all others are associated gas only

· Mean is defined as the arithmetic average of successful outcomes

· Mmboe calculation, using a factor of 1 barrel of oil to 6 thousand cubic feet of gas, has been provided by Baron for reference for the purposes of this announcement. See announcement glossary 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.

* Not SPE PRMS compliant.

For further information, please contact:

Baron Oil Plc		[phone]
Andy Yeo, Chief Executive
Allenby Capital Limited		[phone]
Nominated Adviser and Broker
Alex Brearley, Nick Harriss, George Payne (Corporate Finance) Kelly Gardiner (Sales and Corporate Broking)
IFC Advisory Limited		[phone]
Financial PR and IR		[e-mail]
Tim Metcalfe, Florence Chandler

Glossary

bscf	Billion standard cubic feet of gas.
Best Estimate or 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.
Risk factor, Geological Probability of Success, Pg    or GPoS	The estimated geological probability of success that exploration activities will confirm the existence of a significant accumulation of potentially recoverable petroleum.
High Estimate or 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.
Low Estimate or 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.
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.
mmbbl	Million barrels of oil.
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.
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.
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. Quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. The total quantity of petroleum that is 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.

 

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