Baron Oil PLC Update on Block Z-34 Peru (0879W)
February 06 2017 - 3:17AM
UK Regulatory
TIDMBOIL
RNS Number : 0879W
Baron Oil PLC
06 February 2017
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
Update on Block Z-34 Peru
The Board of Baron Oil plc ("Baron" or "the Company"), the
independent oil and gas exploration and production company, is
pleased to provide an update on activities in Peru on Block
Z-34.
Following preparation and presentation of a detailed drilling
plan in Lima, the Company is pleased to announce that Cuy-Z34-13-1X
has now been accepted by PeruPetro, the responsible government
agency, as an exploration well location. The well is planned to be
drilled in 5,764 ft of water to a total depth of 12,553 ft.
Uruguayan based Union Oil and Gas Group ("UOGG") the Company's
partner on the block is continuing farm out efforts for a partner
to share the drilling costs and the Company feels this process will
be assisted by the substantial reduction in well costs with the
fall in rig rates and service costs. The licence remains in
suspension through the Force Majeure clause of the Production
Sharing Contract (PSC).
The Company owns a 20% carried interest in the Z-34 block PSC
offshore north-west Peru with UOGG who own the remaining 80%
interest but currently pay 100% of all the costs related to the
block. This carry arrangement lasts through all remaining
exploration phases of the PSC. The original transaction with UOGG
was signed in April 2013 and the Supreme Decree to complete the
transaction was officially approved by the Peruvian President in
July 2016. The final step in the process is now the execution and
publication of the Public Deed, which the Board anticipates will
take place shortly. Under the terms of the Farm-in Agreement, UOGG
will pay Gold Oil Peru US$2 million when the Public Deed completes
the assignment. This amount will be subject to Peruvian tax at
30%.
Block Z-34 is located in an undrilled deep water basin and
covers an area totalling 3,713 square kilometres. The prospect is
located only some 15 kms from an existing producing field in the
shallow offshore/onshore Talara Basin, an area that has already
produced 1.7 billion barrels of oil. Most of the remaining
potential in this area is believed to be located in this deep water
basin.
The Company's internal estimates of gross unrisked best estimate
(P50) prospective resources for the Cuy Prospect is 413 MMbbls
recoverable.
Malcolm Butler, Baron's CEO commented as follows:
"Baron and UOGG have worked hard together over the past few
months to produce not just the technical case for the optimum
location to drill the Cuy Prospect but also a drilling, casing and
mud programme that will cope with the unknown pressure environment
of this hitherto untested basin and the problems created by the
apparent presence of gas hydrates in the upper part of the
geological section. Getting PeruPetro to accept this as a viable
programme is a significant step forward. However, the well cannot
be drilled until UOGG has brought in a partner with the financial
and technical strength to actually operate in this challenging
environment, a suitable dynamically-positioned drillship has been
located and all necessary permits put in place."
For further information on the Company, visit
www.baronoilplc.com or contact:
Baron Oil Plc: Tel: +44 (0)1892 838948
Malcolm Butler (CEO)
Cantor Fitzgerald (Nominated Advisor and Joint 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
The person making this notification on behalf of Baron Oil plc
is Geoff Barnes, the Chief Financial Officer and Director of the
Company.
This information is provided by RNS
The company news service from the London Stock Exchange
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February 06, 2017 03:17 ET (08:17 GMT)