Operations Update

RNS Number : 1906H

Baron Oil PLC

27 November 2015

 

27 November 2015

Baron Oil plc

("Baron " or "the Company")

Operations Update

The Board of Baron is pleased to provide an update on its operations in Peru, and the Islandmagee gas storage project in Ireland.

Block XXI Seismic Acquisition, Peru

Baron is pleased to confirm that it has now commenced its topography work in the area around the Minchales well location in the south of Block XXI, onshore Peru. The Company's work timetable has been slightly delayed in obtaining local approvals and also seismic equipment being held up with the Peruvian customs. The majority of the seismic equipment has now been released by Peruvian customs and the Company expects the remainder to be released in the next 2-3 days, which will allow the commencement of the seismic acquisition programme during the course of the week commencing 30 November 2015.

The Company will provide further updates as it progresses the seismic acquisition programme.

Islandmagee Gas Storage Project, Ireland

The Company notes the announcement released this morning by InfraStrata plc ("InfraStrata") regarding the completion of the 2015 work programme at its Islandmagee gas storage project, and EU reconfirmation of the project as a project of common interest.

The full text of today's announcement from InfraStrata follows:

"InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to provide an update on its Islandmagee gas storage project.

In the Company's update announcement on 4 September on the 2015 programme of work, InfraStrata confirmed that following successful drilling of the Islandmagee-1 data gathering well to obtain core samples of the Permian Salt and wireline data, all end of well reports had been finalised and the initial results from the laboratory testing on the cores were encouraging and being used by InfraStrata's engineering team to update the facility design and costs estimates.

Test results on the salt cores and rock mechanics have now been incorporated into the preliminary design of the subsurface and surface facility and cost estimates for the project have been updated.

InfraStrata is therefore pleased to confirm that with the finalisation of this work, the five stages of the £3.8 million programme of work have been successfully completed, on time and within budget. The overall results from the technical programme of work are positive and the objective to confirm the feasibility of the development of an underground gas storage facility in salt caverns in this location has been met.

The thickness and depth of the Permian Salt were both within 10% of pre-drill estimates. The Permian Salt average thickness over the area of the proposed gas storage caverns is approximately 200 metres to a depth of approximately 1,300 metres sub-sea. The rock mechanical properties of the salt determined from the core data are in line with data for Permian Salt at other locations across northern Europe where caverns for gas storage have been constructed and are in operation.

The successful completion of the programme is a major milestone for the project and InfraStrata can now commence the monetisation process to attract investors into the project to take it through to detailed design and on to full construction.

In addition, InfraStrata is pleased to announce that the status of the Islandmagee gas storage project as an EU Project of Common Interest ("PCI") was reconfirmed recently with the adoption of the latest PCI list by the European Commission on 18 November 2015. The list of PCIs is reviewed and updated every 2 years and continued inclusion is a significant boost for the project. Islandmagee is the only gas storage project in northwest Europe to be awarded PCI status.

Under PCI rules, PCI projects benefit from accelerated permitting procedures and improved regulatory conditions and are also eligible to apply for financial support from the Connecting Europe Facility ("CEF"). A budget of €5.35 billion has been allocated under CEF for 2014-20 to help PCIs be implemented faster and make them more attractive to investors. As an existing PCI, InfraStrata, on behalf of the project company Islandmagee Storage Limited ("IMSL"), successfully applied in 2014 for a €2.5 million grant to support its 2015 programme of work and IMSL will continue to seek to utilise the benefits PCI status brings to the project including further applications for financial support, where appropriate."  

For further information:

Baron Oil Plc

Bill Colvin (Chairman & CEO)                                         Tel: [phone]

Cantor Fitzgerald Europe 

Nominated Adviser and Broker

Sarah Wharry (Corporate Finance)                                 Tel:  [phone]

 

END

 

 

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