Baron Oil Share News (BOIL)

(Sharecast News) - Baron Oil updated the market on the Inner Moray Firth (IMF) on Wednesday, having been awarded exclusive licenses over seven blocks and part blocks in the IMF, part of the UK continental shelf, under the 31st Offshore Licensing Round in September, alongside its joint venture partners.

At licence P2470, where Baron has a 15% interest, which includes blocks 11/23, 11/24c and 11/25b surrounding the Wick Prospect, the company said it was applied for before the results of the 11/24b-4 Wick well were known.

The AIM-traded firm said that, although they contained the small Knockinnon oil discovery, the prospectivity of the blocks was downgraded by the dry Wick well, which Baron and its partners drilled at the beginning of 2019.

It said the modest work commitment on this licence consisted of a small volume of 3D seismic reprocessing, which had now been completed.

The results of the work were not encouraging, and the decision had been made to relinquish the licence with effect from 31 March.

At licence P2478, where Baron also holds a 15% interest, the board said the relinquishment of licence P2470 did not affect it, which was over blocks 12/27c, 17/5, 18/1 and 18/2.

It said the licence contained the Dunrobin prospect, which consists of three large shallow Jurassic rotated fault blocks that were mapped mostly on 3D seismic data within a single culmination, with direct hydrocarbon Indicators.

The lowest closing contour covered 40 square kilometres, and the operator- Corallian Energy - estimated the prospect to have unrisked prospective resources of 172 million barrels of oil equivalent (mmboe), with upside recoverable potential of around 400 mmboe.

Additional unrisked prospective resources of 23.5 mmboe were estimated by Corallian for the smaller Golspie Prospect, which was also contained within the licence.

Baron said those resource estimates were non-SPE-PRMS compliant recoverable prospective resources for the Jurassic sands primary target.

Both prospects were defined by existing 3D seismic, with supporting 2D seismic, and reprocessing of that data was underway.

There was no current drilling commitment on the blocks, although the licence needed to be relinquished before the end of the fourth year, being September 2023, if no well was drilled.

"The decision to relinquish Licence P2470 was taken in light of the fact that the area was applied for before the disappointing results of the Wick well were known and because the results of our seismic reprocessing work were not encouraging," said executive chairman Malcolm Butler.

"In contrast, the P2478 licence area is highly prospective and we have already identified significant potential in the acreage."

Butler said the initial work commitment consisted primarily of 3D seismic reprocessing, which the company expected would enable it to define at least one near-term drilling location.

"P2478 lies in an area which attracted multiple bids as part of the UKCS 31st Offshore Licensing Round, including successful ones from major companies."