Peru Block XXI Exploration Progress Update

RNS Number : 6339T

Baron Oil PLC

21 July 2015

 



21 July 2015

Baron Oil plc

("Baron" or "the Company")

Peru Block XXI Exploration Progress Update

The board of Baron announce that the Company's local subsidiary (Gold Oil Peru S.A.C.) has confirmed that formal EIA governmental approval documentation allowing it to immediately commence further exploration activities on the Company's 100% owned Block XXI onshore Peru has now been signed in Lima.

This extensive approval process has involved a significant amount of consultation and liaison work both with the Ministry of Energy and Mines and also extensive and detailed consultation with local communities in our Block located in the Piura region of northwest Peru.

Block XXI is a large exploration concession (in excess of 3,000 square kilometres) and has already had a significant amount of exploration work carried out on it over the past 10 years by the Company. In the northern part of Block XXI Baron drilled two exploration wells in 2006 and 2008, both were unsuccessful but indicated the presence of suitable reservoir rocks. In 2012 Fugro acquired in excess of 8,000 kilometres of airborne gravity and magnetic data over the block which gave an indication of several large sub-surface structures. However, to date no seismic data has been acquired on this block.

Due to the large area to be covered and the relatively high cost of acquiring seismic data onshore, the directors have decided to focus on acquiring the data from an area in the south of the block considered to be prospective around the original Minchales exploration well site. This site is over 80 kilometres south of the two unsuccessful exploration wells.  The Minchales well was interpreted by third parties to have encountered hydrocarbons when it was originally drilled and logged over 60 years ago.

The receipt of EIA approval has now formally triggered the GSS seismic contract which was announced on 15 May 2015. Baron has already made the initial US$375,000 payment to GSS earlier this month and GSS will now begin to order the seismic equipment and mobilise the seismic crew into Peru. When all the seismic acquisition equipment enters the country and the seismic work commences we anticipate the acquisition will last for approximately 60 days and then GSS will process and interpret all 180 kms of acquired 2D seismic data. This will also fulfil the required work program for this period of the block ownership.  The Board should be in a position by the end of the current Calendar year to make a decision on whether or not to drill an exploration well on this block.

Commenting on the EIA approval Baron Oil Chairman/CEO Bill Colvin said:

"Peru has a very diverse and environmentally sensitive ecological system and Baron Oil is conscious of that important fact and we respect the comprehensive work that is required by the Peruvian government in receiving the formal EIA approval. We now intend to move forward with our onshore seismic acquisition program in this under-explored area of our large onshore acreage. We will keep shareholders fully informed of our progress."

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]

 

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