Operational Update

RNS Number : 7349E

Baron Oil PLC

14 April 2014

 



14th April 2014

Baron Oil plc

("Baron Oil", "Baron" or the "Company")

Operational Update

Baron Oil plc, an independent oil and gas exploration and production company focused on Latin America, is pleased to announce:

Highlights

·      Colombia: Sale of 50% of Invepetrol-Nancy Burdine Maxime field

·      Peru: Environmental Impact Assessment study for offshore block Z-34 in the final phase and very close to approval according to the Ministry of Energy and Mines.

·      Peru: Environmental Impact Assessment study for on-shore block XXI in Peru on track.

Colombia

NMB Field

Baron Oil, the AIM-listed oil and gas exploration and production company, is pleased to announce the sale of 50% of its equity in Inversiones Petroleras de Colombia S.A.S. (Invepetrol) (a wholly owned subsidiary) to C.I. International Fuels Ltd. (www.ciinternationalfuels.com) ("CII").  Invepetrol is a special purpose Colombian Company holding the Company's 50% interest in the Nancy- Burdine - Maxime field (NBM), located in the Putumayo Basin, Colombia.

Under the terms of the agreement, Invepetrol will initially purchase S&J Fullservices Ltd's 50% participation interest in the NBM field to give it a 100% interest.  Baron Oil will then sell a 50% interest in Invepetrol to CII for US$2 million in cash. 

Baron Oil and CII  will become equal partners in the NBM field where Baron Oil keeps the operatorship whilst CII will enhance the commercial side of the business. 

After the encouraging production results obtained in the last acid job done in B5 and production enhancement in N1 early this year, it is Baron Oil and CII's intention to allocate most of the cash generated from the NBM operations to expand and upgrade surface infrastructures; meanwhile the NBM contract extension discussions with Ecopetrol continues. The production from NBM has been between 500-600 BOD since the start of this year.

C.I. International Fuels Ltd. is a Colombian private company with more than 10 years engaged in the commercialization, storage and supply of petroleum derivatives fuels and lubricants.  CII is considered one of the most important in the Fuels Marketers in Colombia and the Caribbean Sea and has gained international recognition in the marine and industrial sector. 

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Peru

Block Z-34

The Environmental Impact Assessment ("EIA") is now in the final phase and it is expected that the final approval will be obtained within two months.

Other Activities in the area

The Company notes that BPZ Resources Inc in its Offshore Block Z-1 north of our Z34 has recently announced a substantial gross production increase for the first quarter 2014. Gross production increased to 5,045 barrels of oil per day (bopd), from 2,571 bopd for fourth quarter 2013. In addition BPZ has announced additional good news concerning its aggressive drilling campaign and development of its Corvina and Albacora Fields which in combination with the already mentioned developments in Karoon's Z38 offshore field is encouraging news for the Company's Z34 project.

 Block XXI:

The EIA is in process and advancing in line with management expectations. The second round of workshops, which are a key aspect of the lengthy approval process for EIA studies in Peru, were successful. The third and final round of workshops is scheduled for late June or early July which is a few weeks ahead of our already quite aggressive time table. 

Baron Oil plc

("Baron Oil" or "the Company")

For further information:

Baron Oil Plc

Rudolph Berends (Chairman & CEO)                                  Tel: [phone]

Cantor Fitzgerald Europe

(Nomad and Joint Broker):

Stewart Dickson/Tom Sheldon (Corporate Finance)         Tel:  [phone]

Richard Redmayne/David Banks (Corporate Broker)       Tel:  [phone]

 

END

 

 

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