Operations Update

RNS Number : 7965G

Baron Oil PLC

06 March 2018

 

Baron to earn 5% interest in UKCS Licence P1918 (Colter Prospect).  Farmout Agreement signed on Licence P2235 (Wick Prospect)

Baron Oil PLC

6 March 2018

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY BARON OIL PLC TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

BARON OIL PLC

("Baron Oil" or "the Company")

Baron to earn 5% interest in UKCS Licence P1918 (Colter Prospect)

Baron Oil PLC (AIM:"BOIL") ("Baron" or "the Company") announces that it has entered into a Farmout Agreement with Corallian Energy Limited ("Corallian") under which it will earn a 5% working interest in UK Continental Shelf Licence P1918, which contains the Colter Prospect, on which a well is planned to be drilled this year.

The Colter Prospect lies in Bournemouth Bay, immediately southeast of the Wytch Farm oilfield which has been developed from onshore facilities.  Mapping of 3D seismic data by Corallian indicates that the 98/11-3 well, which encountered oil in the Triassic Sherwood sandstone reservoir in 1986, lies on the flank of a structure that has the potential to hold unrisked P50 Prospective Resources of 26.8 million barrels of oil recoverable from this reservoir. The Colter Prospect will be appraised by a well drilled to a total depth of 1800 metres subsea in a water depth of 16 metres.  The well is currently planned to be drilled in the second or third quarter of 2018, subject to regulatory approvals, at a total cost of some £6.4 million.  Under the terms of the agreement with Corallian, subject to governmental consents, the Company would pay 6.67% of the costs related to this well, capped at a gross cost of £8.0 million: costs above this cap would be funded at 5%. Including a 5% share of back costs unrelated to the well, the total payable by the Company is currently estimated at some £425,000 to earn a 5% interest in the licence.

Farmout Agreement signed on UKCS Licence P2235 (Wick Prospect)

The board is pleased to announce that a definitive Farmout Agreement has now been signed with Corallian, under which Baron will pay 20% of the costs of the first well on the Wick Prospect to earn a 15% interest in Licence P2235.  The terms are as previously announced.

Pursuant to the requirements of the AIM Rules for Companies, the technical information and resource reporting contained in this announcement has been reviewed by Dr Malcolm Butler PhD, BSc, FGS, Chairman and Chief Executive Officer 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.  The technical disclosure in this announcement complies with the Society of Petroleum Engineers standard

Malcolm Butler, Chairman and CEO of Baron commented:

"I was deeply involved in the interpretation and identification of the Colter Prospect and I am very pleased that Baron will be able to participate in the drilling of it, albeit with a small interest.  The Prospect lies very close to Wytch Farm oilfield and, subject to agreement with the field partners, any discovery would likely make use of these existing facilities, enabling development to take place very quickly.

"The signature of this Farmout Agreement and that for the Wick Prospect completes a portfolio that is planned to give Baron's shareholders exposure to three significant wells in 2018."

Glossary: Prospective Resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. P50 indicates that there is a 50% chance of the quantities being higher than the estimate and a 50% chance of them being lower.

For further information:

Baron Oil Plc                                                                              Tel: [phone]

Malcolm Butler (Chairman & CEO)                                                                   

Cantor Fitzgerald Europe (Nominated Adviser and Broker)     Tel:  [phone]

 David Porter, Nick Tulloch (Corporate Finance)                                

Alex Pollen (Corporate Broking)

SP Angel (Joint Broker)                                                             Tel:  [phone]

Richard Hail / Richard Redmayne

 

END

 

 

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