Request for Relinquishment of Licence in Peru

RNS Number : 5783I

Baron Oil PLC

19 April 2022

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

19 April 2022

Baron Oil Plc

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

Request for Relinquishment of Licence Block XXI, Peru

Baron Oil (AIM: BOIL), the AIM-quoted oil and gas exploration company, announces that, through its fully owned subsidiary, Gold Oil Peru SAC, it has requested the relinquishment of its legacy Licence Block XXI in Peru (the "Licence").

As previously outlined, the Licence has been largely under Force Majeure ("FM") for a variety of reasons since 2017 and Baron has been frustrated in its attempts to access the area in order to carry out operations. In our Interim Report of September 2021, we set out four requirements necessary to progress the project, which were:

· confirmation that a three-year extension option to the Licence is available;

· attracting a local farm-in operating partner;

· freedom to conduct workshops with the local communities; and

· drilling authorisation at the local level from, amongst others, the regional president and council.

Regrettably, none of these criteria have been met.

Under the terms of the Licence Agreement, if the Licence is currently under FM and has remained so for a continuous period of more than 12 months, as is the case, the Licence holder may ask Perupetro SA (the Peruvian national Oil & Gas Agency and Licensing Authority) to release the licensee's Bank Guarantee, which in this case is US$160,000. Thereafter, there will be a requirement to establish and file an Abandonment Plan for approval by the relevant authorities.

Andy Yeo, CEO of Baron, commented:

"Over the last year or more we have worked hard to pivot the Company towards assets where we have significant interests in meaningful and active opportunities.

On the Chuditch TL-SO-19-16 PSC, offshore Timor-Leste, we have a 75% interest in a gas discovery and associated prospects and lead that have an aggregate gross Pmean prospective resource of over 590 MMboe independently validated to the SPE PRMS 2018 standard.

In the UK we have accelerated progress and increased our interest to 32% by executing a farm-up agreement in the P2478 licence containing the "Dunrobin" prospect with an internal, non SPE PRMS 2018 standard, estimated gross Pmean prospective resource of the order of 100 MMbbl.

In both cases, we are making good progress on the respective seismic re-processing projects and other technical studies with results to be announced later this year. In 2023 there will be the potential to be drilling at Chuditch and a drill or drop decision on Dunrobin. By contrast, Peru Block XXI has a materially smaller prospective resource with no certainty around pathways or timelines to drilling, hence the Company's decision to relinquish the Licence and ultimately withdraw from the country."

Qualified 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 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' standard.

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, Nick Athanas (Corporate Finance) Kelly Gardiner (Sales and Corporate Broking)
IFC Advisory Limited			[phone]
Financial PR and IR
Tim Metcalfe, Florence Chandler
GLOSSARY
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 high resource numbers with relatively low probabilities.
MMbbl	Million barrels (either oil or condensate liquids associated with gas, depending on context).
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 or condensate in millions of barrels.
Prospective Resources	Quantities of petroleum estimated to be potentially recoverable from undiscovered accumulations by application of future development projects.
SPE PRMS 2018	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.

 

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