BARON OIL PLC
("Baron Oil" or "the Company")
Results of AGM and Update on Operations
Baron Oil, the AIM-listed oil and gas exploration and production company, announces that at the Annual General Meeting of the Company ("AGM"), which took place earlier today, all resolutions outlined in the Notice of AGM were duly passed.
The Chairman, Bill Colvin, stated that little tangible progress had been made in discussions with Union Oil and Gas Group ("Union") in agreeing a settlement of the outstanding US$2m debt due to Baron under the terms of the 2013 Farm In Agreement. He noted that this was a frustrating situation as the Union executives had given no clear reasons as to why the outstanding cash had not been paid, despite their acknowledgement that such payment fell due under the agreement. As a result, the Company had discussed the situation in detail with its legal advisors to determine the process to recover the monies due from Union and what other courses of action might be possible in respect of the working interests in Block Z-34.
The continuing refusal of Union to carry out or pay for further technical work on Block Z-34 had also been very frustrating. Indeed, Baron had now commenced its own technical studies on seismic attributes derived from the 3D data, using Rock Solid Images as a contractor, to aid in the understanding of the potential of the Block.
Mr Colvin reported that discussions were continuing in the effort to find a partner for onshore Peru Block XXI. A detailed prognosis had been forwarded to Perupetro for the drilling of well El Barco-3X on a prospect defined by the 2D seismic data acquired in 2015/16. Such well would be drilled to a total depth of 5900 ft later in 2017 if farm out discussions were successfully concluded.
He noted that the failure of the Woodburn Forest-1 well was a disappointment and evaluation had led to the conclusion that remaining potential lay closer to the coast of the Irish Sea. However, reprocessing of 2D data over offshore licence P2123 had not been encouraging and the blocks had been relinquished.
He was hopeful that the joint studies carried out with SundaGas in SE Asia would lead to the award within the next 3 months of a Production Sharing Contract over a continental shelf block that contains an existing gas discovery. He noted that once the block had been awarded, Baron Oil had the right under the JV Agreement to require the assignment to it of a working interest.
Mr Colvin commented as follows:
"This has been a very frustrating year for the shareholders and your directors. Despite a great deal of effort, we have been unable to stimulate Union into carrying out much-needed work on finalising the evaluation of Block Z-34 and preparing to drill, nor have we yet managed to get them to honour their obligations and pay the Company the $2 million owed to it under the Farm In Agreement. However, we have now taken back full control of activities on the Block and are paying for our own specialist technical work on the 3D seismic data to give us a better understanding of the prospective resources.
On the positive side, we have identified a good-looking prospect in Peru Block XXI and we hope to be able to achieve a farm out and get this drilled this year. In addition, we hope that as a result of our Joint Venture with SundaGas we will be able to obtain an interest in a high-potential block in SE Asia within the next few months."
For further information:
Baron Oil Plc Tel: +44 (0)1892 838948
Malcolm Butler (CEO)
Cantor Fitzgerald Europe (Nominated Adviser and Broker) Tel: +44 (0) 20 7894 7000
Sarah Wharry (Corporate Finance)
Alex Pollen (Corporate Broking)
SP Angel (Joint Broker) Tel: +44 (0)20 7470 0470
Richard Hail / Richard Redmayne
This information is provided by RNS