Interim Results for the six months ended 30 June 2023
Baron Oil Plc (AIM: BOIL), the AIM-quoted oil and gas exploration and appraisal company focused on assets in SE Asia and the UK, is pleased to announce its unaudited interim results for the six months ended 30 June 2023.
Chief Executive’s Statement
Timor-Leste TL-SO-19-16 PSC (“Chuditch PSC” or “PSC”) (Baron 75% interest)
The Company’s strategic and operational priority this year continues to be to prepare for the drilling and testing of an appraisal well on the Chuditch-1 gas discovery. Success here will prove up the commerciality of the 1,165 Bcf of gas (194MMboe) gross Pmean Contingent Resources in the field and de-risk an additional 1,651 Bcf (275MMboe) of gross Pmean Prospective Resources. The granting of a further six-month PSC extension in June 2023 demonstrates the strength of our relationships in Dili.
Our ongoing discussions with potential funding partners provide additional affirmation that the technical case is robust and there is alignment on the requirement for drilling an appraisal well on Chuditch, followed by additional exploration activities to delineate the total on block gas resources for this LNG scale project.
Technical activities during 2023 have been focused on further detailed interrogation of our data, to identify optimal candidate locations for Chuditch appraisal drilling, including additional geophysical work and environmental impact studies. Based on these studies, we have selected a preferred appraisal drilling location, which is approximately 4.8km from the Chuditch-1 discovery well. This represents a substantial step-out, illustrating the size of the field and our confidence in the reprocessed seismic datasets. This location is now being input into the detailed well planning programme. In anticipation of the proposed drilling of an appraisal well, the Company is in discussions with various contractors and is actively assessing the availability of suitable rigs, equipment and personnel.
Dunrobin (UKCS P2478) – Reabold (Admin.) 36%; Baron 32%; Upland Resources 32%
The publication of the CPR by RPS Group in February 2023 provided independent confirmation of the Company’s belief that the western part of the Dunrobin complex had matured into a drillable prospect where a relatively low-cost exploration well can target more than 100 MMbbl of gross Pmean Prospective Resources with modest geological risk.
In July 2023, post period end, the joint venture announced that it had been granted a two-year extension to Phase A of the licence by the UK North Sea Transition Authority (“NSTA”). The additional commitment is to acquire a minimum of 30 square kilometres of 3D seismic data which will complete the 3D coverage over the Dunrobin West prospect.
Plans for execution of this new seismic programme during the first half of next year are underway with contractors, stakeholders and the NSTA. On completion of this work, aimed primarily at further reducing pre-drill risks and volumetric uncertainty, the partners intend to re-engage with potentially interested third parties in respect of the drilling of an exploration well. A ‘Drill or Drop’ decision on P2478 is now required on or before 14 July 2025.
Baron continues to pursue additional new venture opportunities, to enhance and complement the existing portfolio. In particular, we await the outcome of the UK 33rd Round of Licensing where we participated in a licence application as a non-operating partner. The NSTA has recently indicated that any offer would be made before the end of 2023.
The net loss after finance costs and tax of £847,000 (30 June 2022: net loss of £419,000; year to 31 December 2022: net loss of £1,387,000), represented a loss of 0.004p per share (30 June 2022: 0.003p; year to 31 December 2022: 0.010p).
We continue to build out our operations, either in support of existing projects or in the pursuit of new opportunities. We are able to do this as the Company has a well-funded balance sheet which more than covers our current activities and commitments. Available cash (excluding monies held as security for the bank guarantee in Timor-Leste) as at 30 June 2023 was £4,619,000 (30 June 2022: £2,365,000; 31 December 2022: £5,807,000).
On 1 July 2023, Dr. Andy Butler joined the Board as Director, Asia Pacific. He has been closely associated with Baron and Chuditch from the outset through our initial new venture partnership to the capture and de-risking of the TL-SO-19-16 PSC in Timor-Leste. He adds technical and commercial capacity to the Board as well as providing access and expertise in Asia. Andy continues to manage the Timor-Leste project.
During August 2023, we completed the switch over of the US$1m Bank Guarantee (“BG”) for the Chuditch PSC from United Overseas Bank Limited of Singapore to ANZ Banking Group Limited in Timor-Leste. In line with its full ownership of both SundaGas (Timor-Leste Sahul) Pte. Ltd. and SundaGas Banda Unipessoal Lda., Baron has provided 100% of the funds required for the BG.
John Wakefield, Non-Executive Chairman, commented:
“All of our efforts are currently focused on the Chuditch PSC drilling decision to be made late in 2023 for a Chuditch-1 appraisal well. We are making good progress and are in advanced discussions with a number of potential funding partners. We look forward to updating shareholders as soon as we are able.”
Qualified Person’s Statement
Pursuant to the requirements of the AIM Rules – Note for Mining and Oil and Gas Companies (“AIM MOG”), the technical information and resource reporting contained in this announcement has been reviewed by Jon Ford BSc, Fellow of the Geological Society, Technical Director of the Company. Mr Ford has more than 40 years’ experience as a petroleum geoscientist. 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’ SPE PRMS standard.
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