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Although we are not insulated from the recent gyrations in the oil price, it should be noted that the Company's assets are all in the pre-cashflow exploration phase and future development of the Chuditch PSC will be more dependent on increasing regional gas prices than on global oil prices as the SE Asian economies recover from the COVID-19 pandemic." 2/2
22 April 2020
Baron Oil Plc
("Baron" or "the Company")
Timor-Leste: Execution of Shareholders' Agreement and Settlement of Carry Agreement
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration and production company, focused on opportunities in SE Asia, Latin America and the UK is pleased to announce that it has executed a Shareholders' Agreement ("SHA") with SundaGas Resources Pte. Ltd ("SundaGas") governing the operation of SundaGas (Timor-Leste Sahul) Pte.Ltd ("SundaGas TLS"), in which Baron now has a 33.33% shareholding. The sole asset of SundaGas TLS is its 100% shareholding in SundaGas Banda Unipessoal Lda., Operator of the TL-SO-19-16 Production Sharing Contract (the "Chuditch PSC"), offshore Democratic Republic of Timor-Leste, in which it holds a 75% interest.
The SHA contains provisions typical of an agreement of this nature including, but not limited to, mutual undertakings, the right to appoint one of the three directors of SundaGas TLS and certain shareholder rights protections.
Pursuant to the terms of the Carry Agreement, executed between SundaGas and Baron on 27 January 2020, Baron has paid the sum of US$521,149 to SundaGas to reimburse it for Baron's 33.33% share of costs incurred since the Chuditch PSC was signed on 8 November 2019. This amount includes Baron's 33.33% share of the US$1,000,000 Bank Guarantee and the subscription for 3,333 shares in SundaGas TLS, representing 33.33% of the issued share capital of that company. Baron now plans to maintain its interest by continuing to pay 33.33% of the costs incurred on the Chuditch PSC through additional investment into SundaGas TLS. The Company's 33.33% interest in SundaGas TLS equates to an indirect 25% interest in the Chuditch PSC after accounting for the 25% carried interest of the Timor-Leste state company.
SundaGas is progressing with the initial work programme commitment to reprocess existing 2D and 3D seismic data over the Chuditch PSC area. Most of this work is desk and computer-based and should not be unduly affected by current movement restrictions, although gaining access to the necessary data is being delayed. Thereafter, subject to satisfactory results from the reprocessing, the subsequent commitment is for a well to be drilled in the third year of the Initial Term of the Chuditch PSC.
Although this is not a Related Party Transaction under the AIM Rules, it is noted that a director and an ultimate beneficial owner of SundaGas (Dr Andy Butler) is the nephew of Dr Malcolm Butler, Baron's Executive Chairman.
Dr Malcolm Butler, Executive Chairman of Baron, commented…
"Now that our shareholding in SundaGas TLS is established, we look forward to the progress of the Timor-Leste project, which has the potential to make a step-change in the value of your Company. Following the recent Placing, our proposed work programme for 2020 and into 2021 in Timor-Leste, Peru and the UK is funded. 1/2
Online conference on 9th July 2020.
https://twitter.com/Profitseeker3/status/1278261962405789696
https://twitter.com/Profitseeker3/status/1278264970212528129
Point to be noted, it has over £1.8 million cash and the undisclosed European company might be finding one of the projects,
UK - Inner Moray Firth, Offshore Licence P2478 - 15% interest
"In April 2020, we announced a Work Sharing and Confidentiality Agreement ("WSCA") with a large European Exploration and Production Company for licence P2478. The Joint Venture partners agreed to cease marketing a farmout until 30th September 2020, during which period the WSCA party will complete its own regional technical work and share its data and interpretations over the area. The exclusivity period may be extended with this party until 31 December 2020 should it wish to negotiate farm-in terms. Whether or not this happens, we are hopeful that these studies will improve the chances of bringing in a partner to assist in funding, should the group elect to drill in due course."
"Block XXI: The Company continues to pursue efforts to drill the El Barco-3X well in Peru, including introducing a partner"
So Peru has been in extended lockdown but Peru's miners are now revving up stalled operations with mass testing, isolation periods and revamped shift patterns, setting up the world's No. 2 copper producer to hit 80% of production capacity by the end of June, industry officials said. Shopping malls in Peru are welcoming customers for the first time in just over three months.
https://uk.reuters.com/article/us-health-coronavirus-peru-mining-exclus/exclusive-peru-miners-restart-pandemic-hit-operations-with-mass-testing-isolating-workers-idUKKBN23P1L6
https://www.voanews.com/covid-19-pandemic/peru-reopens-shopping-centers-restrictions-closed-months-over-covid-19-spread
Seems the Chuditch PSC is being fast tracked and Sundagas will be presenting an update at the Timor Leste Oil & Gas energy summit on 09th July. Baron have 25% of this. Shell's internal analyses following the drilling of the Chuditch-1 discovery in 1999, indicate a Mean Gas Initially in Place (GIIP) for the surrounding group of prospects in the Chuditch PSC of 2,320 BCF
"The summit will gather government officials, key IOCs, investors and service providers that will discuss these topics and network with attendees online in sessions and private B2B meeting rooms."
"The Chudith Gas Discovery and the PSC TL-SO-19016 license, SundaGas' success and update."
https://oilvoice.com/Event/42817/The-Energy-Online-Series-TimorLeste