LONDON (Alliance News) - Baron Oil PLC Monday said the cost of exiting the Nancy Burdine Maxine field in Colombia will total around USD1.0 million over the next six months as it completes the formal handover of the field to the state-owned oil company.
Inversiones Petroleras de Columbia, in which Baron holds a 50% stake, was operating the field, but handed over formal operator-ship last Friday to its partner, the state-owned oil company Ecopetrol SA.
The field was producing around 400 barrels of oil per day in the first half of 2015 but this was "abruptly stopped towards the end of the reporting period" due to downhole corrosion, it said in September.
To fix the problem, it would have had to re-enter the well but said it decided against this because it would involve "significant operational risk and cost" which could not be recovered from any further production sourced from the well.
Baron's contract on the field then expired and its request to continue operating the field was rejected by Ecopetrol.
Over the next six months, Baron will work to complete all the formal field handover documentation and the net cost of exiting the country will be around USD1.0 million, mainly related to accrued royalty payments and capital costs owed to Ecopetrol.
Back in September, the company said it is focused on finding new opportunities in Peru "and elsewhere" following the exit from Colombia.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Baron Oil (BOIL)