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LONDON (Alliance News) - Baron Oil PLC Monday said it has processed the 2D seismic data from Block XXI in Peru, producing some "encouraging results".
The seismic data showed that there appears to be a small gas accumulation of up to 5.0 billion cubic feet in sands around 4,425 feet below the surface. That was found to the north east of the original Minchales well bore, the company said.
The data also "clearly shows" several gas chimneys which the company believe are the course of a 10.0 foot gas zone identified in a shallow sand around 2,535 feet below surface. Those chimneys have been located to the north east of the Minchales well bore.
"We believe that gas is leaking up from fractured basement rock at around 6,000 feet subsurface, causing the gas chimney effect. Gas shows were encountered in the electric logs at the igneous basement level at the bottom of the original Minchales well," said Baron.
"We will now work to define a well location and design and cost an exploration well that will enable us to test as many of the potential hydrocarbon bearing zones as possible. Once we have completed that work we will decide whether to move forward to drill a well, most likely by bringing in a partner to share the drilling costs," said Chairman Bill Colvin.
Baron said it met with its partner on the licence last week and confirmed it will extend the licence period for a further 18 months and also relinquish 20% of the licence area as required under the terms of our exploration contract.
Baron shares were up 5.3% to 0.500 pence per share on Monday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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