19 June 2024
Baron Oil
Plc
("Baron", or the
"Company")
Entry into Contract Year 3 of
Chuditch PSC, Timor-Leste
Baron Oil Plc (AIM: BOIL) is pleased
to provide an update on the status of the TL-SO-19-16 Production
Sharing Contract ("Chuditch
PSC" or the "PSC"),
offshore Democratic Republic of Timor-Leste ("Timor-Leste").
Headlines:
·
Chuditch PSC has entered Contract Year
Three
·
Bank guarantee increased from US$1 million to US$2
million (net to Baron Oil)
·
Funding initiatives progressing
·
New investor presentation available on
website
Timor-Leste Chuditch PSC: Commitment Status
The Chuditch PSC in Timor-Leste,
which Baron operates through its SundaGas subsidiary, with a 60%
working interest in partnership with state-owned joint venture
partner TIMOR GAP Chuditch Unipessoal Lda ("TIMOR GAP"), entered Contract Year
Three of the PSC today, 19 June 2024. This is in line with the
details set out in the operational update released by the Company
on 28 May 2024.
Contract Year Three contains a
commitment to drill an appraisal well on the Chuditch gas field, an
obligation which was previously subject to seismic data
reprocessing confirming the presence of a significant structure
associated with the field. As previously announced, the successful
conclusion of the 3D seismic reprocessing project, and subsequent
interpretation of those data and other technical studies, has
removed that subjectivity; Chuditch has been demonstrated to be a
field of significant scale, interpreted to be >20 km long with a
Pmean Contingent Resource of 1.16 Tcf of gas.
Bank Guarantee
A requirement of the PSC is to
provide government regulator Autoridade Nacional do Petróleo
("ANP") with a security in
the form of a bank guarantee. Previously, a bank guarantee to
the value of US$1.0 million was provided. For PSC Contract
Year Three, reflective of the increased work programme commitment,
ANP has requested an increase in the total amount of the bank
guarantee to US$2.5 million. As TIMOR GAP is responsible for
20% of costs in relation to the PSC, the Company's net share is
US$2.0 million, a US$1.0 million increase for Baron.
The new bank guarantee has been
issued by Banco Nacional de
Comércio de Timor-Leste ("BNCTL"), a bank wholly owned by the
government of Timor-Leste. The use of BNCTL is part of the
Company's commitment to maximising local content inside
Timor-Leste, but also indicative of its intent to broaden its
business partnerships in-country.
Drill Funding
The Company continues its
discussions with additional potential funding partners regarding
participation in the drilling of the appraisal well in Contract
Year Three. These parties include potential strategic investors
into the Chuditch project and enterprises with an interest in
developing and / or taking the gas resources to market.
Whilst there is no certainty of any of the discussions
reaching a completed transaction, the progress is encouraging, and
the Board is confident of the financing being in place in time to
enable drilling of the Chuditch well as planned in early
2025.
Investor Relations:
Baron will be giving a presentation
at the Proactive One2One Investor Forum in London today, followed
by a Q&A session and informal networking. Details of the
event can be found at https://www.proactiveinvestors.co.uk/register/event_details/445#.
A copy of the presentation has been uploaded onto the Company
website www.baronoilplc.com
and a video recording of the presentation will be
uploaded as soon as it is made available to the Company.
Dr
Andy Butler, Chief Executive
Officer, commented:
"The move into Contract Year Three is an
important milestone for the Chuditch PSC. The Company's
technical and operational teams are making great progress in
preparations for drilling of the Chuditch-2 appraisal well and the
parallel initiatives around funding for drilling and subsequent
activities are advancing at pace."
For
further information, please contact:
Baron Oil
Plc
+44 (0) 20 7117 2849
Dr Andy Butler, Chief Executive
Officer
Allenby Capital
Limited
+44 (0) 20 3328 5656
Nominated Adviser and Joint
Broker
Nick Athanas, Nick Harriss, George
Payne (Corporate Finance)
Kelly Gardiner, Stefano Aquilino
(Sales and Corporate Broking)
Cavendish Capital Markets
Limited
+44 (0) 131 220 6939 / +44 (0) 207 397
8900
Joint
Broker
Neil McDonald, Pearl Kellie
(Corporate Finance)
Leif Powis (Sales)
IFC
Advisory
Limited
+44 (0) 20 3934 6630
Financial PR and
IR
baronoil@investor-focus.co.uk
Tim Metcalfe, Florence
Chandler
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 Dr Andrew Butler, Fellow of the
Geological Society of London and member of the Society of Petroleum
Engineers. Dr Butler has more than 27 years' experience as a
petroleum geologist. 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.
Glossary of Technical Terms
|
Contingent Resources
|
Those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
known accumulations by application of development projects, but
which are not currently considered to be commercially recoverable
owing to one or more contingencies.
|
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Mean or Pmean
|
Reflects an unrisked median or
best-case volume estimate of resource derived using probabilistic
methodology. This is the mean of the probability distribution for
the resource estimates and is often not the same as 2U as the
distribution can be skewed by high resource numbers with relatively
low probabilities.
|
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PSC
|
Production Sharing
Contract.
|
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Tcf
|
Trillion standard cubic feet of
gas.
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