Baron Oil (AIM: BOIL), the oil and gas company with a strategy of exploring near-term drilling opportunities in established producing areas, will provide the following update at its AGM at 11:00 a.m. today, which is to be held at the offices of Kerman & Co, 200 Strand, London WC2R 1DJ.
On 10 June 2019, Baron announced that it had raised an additional £440,000 (gross) through a Placing and Subscription at 0.08p per New Ordinary Share to enable the Company to continue to build and evaluate its existing portfolio of oil and gas assets in the UK, progress the potential for further drilling activity this calendar year by bringing in a partner to Peru Block XXI and to help deliver the existing SE Asia application in place with SundaGas Pte. Ltd. At close of business on 24 June 2019, the Company held a cash balance of £609,000.
COLTER and PEDL330/PEDL345 (8%)
The Corallian Energy Limited (“Corallian”) operated group is in the process of undertaking a major review of the seismic data and mapping of the area after the well results to determine the size and path to commercialisation of the Colter Area Prospects.
The Colter South discovery has been assessed by Corallian to contain gross unrisked Pmean recoverable Prospective Resources of 15 mmbo (1.2 mmbo net to Baron) as well as upgrading the adjacent onshore licences PEDL330 and PEDL345 (which include the Purbeck Prospect with gross unrisked Pmean recoverable Prospective Resources of 36 BCF).
UK 31st OFFSHORE ROUND AWARDS (8%-15%)
The Board was delighted with the outcome of the 31st Round applications, which not only lock in the eastern extension of Colter South and the Ballard Point gas accumulation acreage surrounding Baron’s existing prospects and discoveries but also bring in an exciting and potentially significant new exploration area in Inner Moray Firth South. The Board expects the UK Oil & Gas Authority awards to be confirmed in H2 2019 and Corallian will be the operator.
The Inner Moray Firth South Blocks (Baron interest 15%), 12/27c, 17/5, 18/1 and 18/2, contain a new low risk exploration play up-dip from the earlier 12/27-1 discovery. This lies in shallow water with shallow targets near proven reservoirs. Dunrobin is the primary prospect, structurally located to receive oil spilled up-dip from the 12/27-1 gas discovery. The Golspie follow-on prospect is in a separate fault block also up-dip from 12/27-1. Within the four year Phase A of the Innovate licence, the joint venture has a modest work commitment which can be funded out of existing resources, before making a decision to drill or drop the licence before the end of Phase A.
Corallian estimates gross unrisked Pmean recoverable Prospective Resources of 187 mmboe for the Dunrobin Prospect and 21.5 mmboe for the Golspie Prospect. The primary reservoir intervals for both prospects are sandstones of the Beatrice Formation and Dunrobin Bay Group.
In Peru, the Company continues to drive forward its plans for Block XXI which could see drilling activity occur in H2 2019. The well location and an environmental impact assessment (EIA) have been approved and a provisional authorisation for expenditure (AFE) has been prepared. An experienced local operator with onshore drilling capacity is available and Baron has negotiated a three year licence extension to be approved by PeruPetro once an exploration well has been drilled. The Board continues to seek third party partner(s) to join with Baron and the planned well operator to achieve the required funding level. The Company is also entitled to the return of its US$160,000 government performance bond following drilling of the well.
The most likely unrisked recoverable Prospective Resources lie in low risk Mancora Sands (6.4 BCF of gas) and higher risk Fractured Basement sands (7 mmbo oil or 17 BCF of gas). The Board believes the Basement structure, over which Baron acquired 2D seismic in 2015, may extend beyond the limits of the existing seismic data and be larger than currently mapped.