Baron Oil Plc (AIM: BOIL), the AIM-listed oil and gas exploration and production company, is pleased to provide the following update to shareholders.
· Evaluation work on the Colter South discovery underway
· Colter side-track indicated potential targets within the onshore licences PEDL 330/PEDL 345
· Baron has applied as a non-operator with two groups in the 31st UKCS Licensing Round
· Significant new opportunity being reviewed with our strategic partner SundaGas in SE Asia
· Peru farmout discussions continue
· Board changes to increase execution capacity and broaden experience
Now that Baron has completed its initial UK drilling programme which concluded with a new discovery at Colter South, in common with its other joint venture partners the Company is remapping the Colter Area structures in offshore Licence P1918 to determine their extent and update the estimates of the Prospective Resources.
As shareholders will be aware, following completion of drilling, it has been determined that the majority of the potential resource resides within the Colter South portion of the play. Pre-drill, Corallian (Operator of the licence) had an estimated Pmean recoverable volume of 15 mmbbls for the Colter South Prospect. The current work, which we expect to be finalised towards the end of April 2019, will be used to determine the forward plan to maximise the potential value associated with the Colter and Colter South Prospects. (Baron holds an 8% interest in Licence P1918)
PEDL 330 & PEDL 345
The Colter side-track also encountered live oil and gas shows in the Jurassic Cornbrash-Lower Oxfordian interval, the producing reservoir zone in the onshore Kimmeridge oilfield. This upgrades the Purbeck Prospect and other potential targets on trend to the west within the onshore licences PEDL 330 and PEDL 345 which are held by the same Joint Venture group as offshore licence P1918. Baron holds an 8% interest in these two PEDLs.
31st UKCS Licensing Round
Applications for licences in the 31st Offshore Licensing Round closed on 7 November 2018. As disclosed by the UK’s Oil & Gas Authority (OGA), the Round attracted 36 applications covering 164 blocks in frontier areas of the UK Continental Shelf (UKCS).
Baron has applied as a non-operator with two groups. The OGA has stated its intention to offer awards to successful applicants as early as possible during Q2 2019.
Peru – Onshore Block XXI
Baron continues its farm-in discussions on Block XXI. The Block is in the 5th and last exploration phase with less than 6 months left in which to drill when Force Majeure is lifted. The well location and Environmental Impact Assessment has been approved. In order to maximise the chances of finding a partner, Baron has recently negotiated a 3-year extension, to take effect once the well has been drilled.
SundaGas – South East Asian Strategic Joint Venture
Baron is currently reviewing a new significant offshore exploration opportunity in SE Asia that has arisen through Baron’s established relationship with SundaGas, a Singapore-based company and regional specialist. Unlike the ongoing SE Asia block application, this new opportunity relates to an established Production Sharing Contract located near producing fields and infrastructure and we anticipate that rapid progress can be made if current discussions are successful.
On the separate SE Asia block application made by SundaGas in 2016, it remains live and we hope that the previous delays on a decision to award the block may now be coming to an end. If the block is awarded to SundaGas, Baron will have the right to request assignment of a 25% interest.
The following board changes will occur on 31 March 2019
· Dr Malcolm Butler will step away from his role as Chief Executive but will remain as Executive Chairman;
· Andrew Yeo, who was appointed as a non-executive director of the Company in April 2018, has agreed to take on the executive role of Managing Director;
· Jon Ford is being appointed as a non-executive director. Jon is an experienced geophysicist and exploration manager who has been involved in international petroleum exploration, development and production for more than 35 years; and
· Geoffrey Barnes, who agreed to defer his impending retirement as Finance Director in February 2018, will resign from the Board but continue to be employed part-time as Financial Controller and Company Secretary. He has successfully looked after the Company’s financial and secretarial affairs for many years, as a consultant, non-executive director and executive director, and will now enter a well-earned semi-retirement while continuing to keep an eye on our finances.
Malcolm Butler, Executive Chairman of Baron, commented:
“We have already made significant progress this year with the discovery at Colter South, which as well as offering potential value to shareholders has opened up other avenues of exploration activity in our Dorset licences. In addition, through the SundaGas relationship we are currently reviewing a significant new opportunity as well as progressing the earlier 2016 SE Asia Block application.
As a result of this increasing level of activity, I feel now is an appropriate time for the Company to strengthen the board’s execution capacity and experience. I have worked in cooperation with Andy in various capacities over the past seven years and I am confident that he will provide the necessary leadership to help us drive Baron forward. Jon brings to the board an extensive background in exploration operations, particularly in the North Sea and SE Asia, areas where his advice will be invaluable as the Company moves forward.
As described above, as well as the work on our existing portfolio of assets, we already have a number of possible new ventures and initiatives planned over the coming months and I look forward to updating shareholders on progress during the coming year.”
Further information on Jon Ford as required by Rule 17 and Schedule Two paragraph (g) of the AIM Rules for Companies is detailed below:
Hugh Jonathan Ford, aged 59, is or has been a director of the following companies over the past five years:
Tedstone Oil & Gas Limited
Octane Exploration & Production Limited
There is no further information to be disclosed for Jon Ford as required under Schedule Two paragraph (g) of the AIM Rules for Companies.