Inner Moray Firth Update on Licence Status

RNS Number : 1137J

Baron Oil PLC

08 April 2020

 

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

  8 April 2020

Baron Oil Plc

("Baron" or "the Company")

Inner Moray Firth Update on Licence Status

Baron Oil Plc (AIM:BOIL), the AIM-listed oil and gas exploration and production company, provides the following Inner Moray Firth ("IMF") update to shareholders.

As announced on 20 September 2019, Baron and its joint venture partners were awarded exclusive licenses over seven blocks and part blocks in the IMF, part of the UK Continental Shelf, under the 31^st Offshore Licensing Round.

Licence P2470 (Baron 15%)

Licence P2470 included blocks 11/23, 11/24c and 11/25b, surrounding the Wick Prospect and was applied for before the results of the 11/24b-4 Wick well were known. Although they contain the small Knockinnon oil discovery the prospectivity of the blocks was downgraded by the dry Wick well, which Baron and its partners drilled at the beginning of 2019. The modest work commitment on this licence consisted of a small volume of 3D seismic reprocessing, which has now been completed.  The results of such work were not encouraging and the decision has been made to relinquish the licence with effect from 31 March 2020.

Licence P2478 (Baron 15%)

The relinquishment of Licence P2470 does not affect Licence P2478, over blocks 12/27c, 17/5, 18/1 and 18/2. This contains the Dunrobin prospect which consists of three large shallow Jurassic rotated fault blocks that are mapped mostly on 3D seismic data within a single culmination with Direct Hydrocarbon Indicators. The lowest closing contour covers 40 square kilometres and the Operator, Corallian Energy Limited, estimates the prospect to have Pmean unrisked Prospective Resources of 172 mmboe, with upside recoverable potential of c. 400 mmboe (P10). Additional Pmean unrisked Prospective Resources of 23.5 mmboe are estimated by Corallian for the smaller Golspie Prospect, also contained within the licence. These resource estimates are non SPE-PRMS compliant recoverable Prospective Resources for the Jurassic sands primary target. Both prospects are defined by existing 3D seismic with supporting 2D seismic and reprocessing of these data is underway. There is no current drilling commitment on these blocks, although the licence must be relinquished before the end of the 4th year, being September 2023, if no well has been drilled .

Competent Person's Statement

Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and Gas Companies, the technical information and resource reporting contained in this announcement has been reviewed by Dr Malcolm Butler BSc, PhD, FGS, Executive Chairman 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, which complies with the Society of Petroleum Engineers standard except as noted.

Malcolm Butler, Executive Chairman of Baron Oil, commented...

"The decision to relinquish Licence P2470 was taken in light of the fact that the area was applied for before the disappointing results of the Wick well were known and because the results of our seismic reprocessing work were not encouraging.

In contrast, the P2478 licence area is highly prospective and we have already identified significant potential in the acreage. Our initial work commitment consists mainly of 3D seismic reprocessing which we anticipate will enable us to define at least one near-term drilling location. P2478 lies in an area which attracted multiple bids as part of the UKCS 31^st Offshore Licensing Round, including successful ones from major companies."

For further information, please contact:

Baron Oil Plc	[phone]
Dr Malcolm Butler, Executive Chairman
Andy Yeo, Managing Director
SP Angel Corporate Finance LLP	[phone]
Nominated Adviser and Joint Broker
Stuart Gledhill, Caroline Rowe
Turner Pope Investments (TPI) Limited	[phone]
Joint Broker
Andy Thacker, Zoe Alexander

Glossary

Oil equivalent mmboe P10 Pmean	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 adding this to the estimate of the volume of oil in millions of barrels. Millions of barrels of oil equivalent An estimated upside case of resource derived using deterministic methodology and reflecting a 10% chance that the volumes will be this figure or greater. Reflects a median or best case volume estimate of resource derived using probabilistic methodology. This is the mean of the probability distribution for the resource estimates and can be skewed by high resource numbers with relatively low probabilities.
Prospective Resources SPE PRMS	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. The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management System ("PRMS") is 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.
Unrisked Prospective Resources	Denotes the unrisked estimate of Prospective Resources.

 

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