28 May 2024
Baron Oil
Plc
("Baron",
or the "Company")
Operational
update
Proposed change of Company
name
Baron Oil Plc (AIM: BOIL) is pleased
to announce a proposed change of the Company's name to reflect its
strategic focus on gas in South East Asia and an update on
operational activities on the TL-SO-19-16 Production Sharing
Contract ("Chuditch" or the
"PSC"), offshore Democratic
Republic of Timor-Leste ("Timor-Leste"). This follows the
announcement of the Company's results for the year ended 31
December 2023 earlier today.
Headlines:
·
Change of Company name to 'Sunda Energy plc' to be put to
shareholders at forthcoming Annual General Meeting ("AGM")
·
Name change reinforces Company's strategic focus
on gas in the South East Asia region
·
Chuditch PSC will enter Contract Year Three on 19
June 2024
·
Significant progress in operational planning for
Chuditch-2 well, including:
o site
survey completion
o negotiations on a drilling rig
o environmental approvals process
o well and
production test design
o procurement of equipment and services
·
Good progress in discussions with potential
Chuditch drill funding partners
·
Pursuing new venture gas opportunities in SE Asia
with low initial cost of entry.
Explanation of SE Asia Focus and Proposed Name Change to
'Sunda Energy plc'
Following the relinquishment of
Baron's sole remaining upstream asset in the United Kingdom, the
Company has embarked on a strategy focussed on SE Asia,
particularly the operated business in Timor-Leste. To
reinforce this strategic change in direction, the Baron board of
directors (the "Board") is
seeking shareholder approval for a change of Company name at the
upcoming AGM to Sunda Energy plc, a geographically pertinent name
relating to the vast archipelago of islands in the SE Asia
region.
The Board believes that the Company
has significant competitive advantages within the Sunda region,
including a strong operating platform and a team with considerable
experience and an excellent reputation; strong relationships with
government and industry peers; and extensive regional knowledge
that will enable execution of a clear value orientated growth
strategy.
Gas, which is naturally abundant in
SE Asia, is an increasingly important part of the energy mix,
particularly as a transition fuel in a region where energy demand
leads to a heavy reliance on emissions-intensive coal. As a
result, Asia is the centre of global growth in liquefied natural
gas (LNG) demand. These factors underpin the Company's drive to
focus on gas in the region.
The decision to seek shareholder
approval for a change of name from Baron Oil to Sunda Energy has
been taken to reinforce the Company's unambiguous focus on SE Asian
energy markets.
Timor-Leste Chuditch PSC (Baron 60% working
interest)
Commitment Status
The Chuditch PSC in Timor-Leste,
which Baron operates through its SundaGas subsidiary with a 60%
working interest in partnership with TIMOR GAP, the state-owned
energy company of Timor-Leste, is currently in its second contract
year. Following several extensions, the last being announced by the
Company on 5 December 2023, Contract Year Two ends on 18 June 2024
and Contract Year Three commences on 19 June 2024.
Contract Year Three of the PSC
contains a commitment to drill a well to appraise the Chuditch gas
discovery, an obligation which had previously been subject to the
reprocessing of seismic data confirming the presence of a
significant structure associated with the field. The
successful conclusion of the 3D seismic reprocessing project, and
subsequent interpretation of those data and other technical
studies, has definitively removed that subjectivity. Chuditch has
been demonstrated to be a field of significant scale, interpreted
to be >20 km long and >150m in vertical relief, with a Pmean
Contingent Resource of 1.16 Tcf of gas. Hence the Company
will automatically progress into Contract Year Three on 19 June
2024, and does so with confidence around its plans to drill a key
milestone well on Chuditch, subject to securing drill
funding.
Well Planning Preparations
Site Survey and Well Location
As announced by the Company on 16
April 2024, SundaGas completed a physical assessment (a
"Site Survey") at the
planned site of the Chuditch-2 appraisal well, work which has
enabled a drilling location to be confirmed that the Company
considers to be final. As described in the announcement, the
well will be situated 5.1km from the original Chuditch-1 discovery
well in a water depth of 68m. The predicted vertical column
height of gas in the Jurassic reservoirs at this location is
149m.
Well Design
SundaGas' experienced in-house drill
team has conducted extensive design studies for the Chuditch-2 well
construction, enabling detailed specifications to be fed into the
ongoing procurement processes highlighted below. Analyses of
borehole trajectory, stability, drilling fluid, liner and bit
requirements are all enabling a plan to be developed for the
effective, efficient and safe drilling of the appraisal well.
Design work on a planned production flow test (DST) for
Chuditch-2 gas, led by SundaGas' well test engineer, is also
advancing apace.
Workshops are continuing on a
regular basis with the government regulator Autoridade Nacional do Petróleo
("ANP") and joint venture
partner TIMOR GAP, and the Company appreciates the strong
collaboration from both parties on operational and logistical
planning.
Procurement of Drilling Rig and Other
Services
The Company is in detailed
discussions with the operator of a rig that it considers suitable
to drill the Chuditch-2 well. These discussions are of a technical
and commercial nature. The schedule of activities planned by
other operators for the target rig means that the Company now
believes the most likely commencement date for drilling operations
is Q1 2025 rather than late 2024 as previously
indicated.
In addition, the Company is moving
quickly to procure many of the other materials and services
required for the drilling campaign. Numerous tendering exercises
have been undertaken or are ongoing, including for borehole casing
and wellheads.
Environmental Approvals
In addition to demonstrating the
physical suitability of the location for drilling, the recent Site
Survey operations also provided an opportunity to collect
environmental samples, data and images which have provided critical
information for necessary environmental approvals. The
preparation of precedent documents to support a full Environmental
Impact Assessment is ongoing with the assistance of a contracted
Timor-Leste specialist agency, including plans for public
consultation exercises. The Company's Health, Safety and
Environment ("HSE")
personnel are in close liaison with the HSE team at ANP in working
towards delivering comprehensive assessment of all safety and
environmental aspects of drilling operations and the Company is on
schedule to secure all necessary approvals prior to anticipated
drilling operations.
Drill Funding
The Company continues to seek
additional funding partners to participate in the drilling of the
appraisal well. The recent Farm-Up by TIMOR GAP to a 40% working
interest in the PSC, including a 20% paying interest, was an
important step in a plan to bring together a strong investment
partnership around the Chuditch project, aligned on timely
development of gas resources in the interests of Timor-Leste and
all other stakeholders of the Company.
Discussions with certain additional
parties continue and are progressing forward in line with the
board's expectations. These parties include potential strategic
investors into the Chuditch project and enterprises with an
interest in developing and / or taking the gas resources to market.
Whilst there is no certainty of any of the discussions reaching a
completed transaction, the level of interest is encouraging, and
the Board are confident that there will be no impediment to
drilling the Chuditch well on the planned schedule.
Proposed Change of Name
At the Company's 2024 AGM, a
resolution will be put to shareholders to approve the Company's
proposed change of name to Sunda Energy plc. In connection with the
proposed name change, the Company's TIDM is expected to change to
'SNDA'. The ISIN (GB00B01QGH57) and SEDOL (B01QGH5) of the
Company's ordinary shares will remain unchanged. Shareholder
documents of title will be unaffected by the proposed change of
name and existing share certificates should be retained and remain
valid. Any new share certificates issued after the proposed name
change becomes effective will bear the proposed new name, Sunda
Energy plc.
Investor Relations:
The Company will continue to review
and seek to improve and extend its investor relations activities.
Baron CEO, Dr Andy Butler, will today give video interviews on the
Proactive and DirectorsTalk platforms following the publication of
the Company's financial statements earlier today, to cover both the
operational updates and the proposed change to the name of the
Company described herein.
In addition, an updated Company
presentation will be published shortly on the Company
website www.baronoilplc.com.
A new improved website is planned for Sunda Energy, with additional
materials to inform shareholders of the Company's business
activities and operations.
The Company continues to participate
in industry events and conferences, and presentation materials will
be posted to the website at the appropriate time.
Dr
Andy Butler, Chief Executive
Officer, commented:
"These are very exciting times for our
Company. With a recently refreshed and energised Board, a strong
pivot to SE Asia where gas is in such strong demand, and the new
proposed 'Sunda Energy' name, the Company looks forward to a bright
future. The progress of our preparations to drill the Chuditch-2
well, both operationally and in discussions with potential drill
funding partners, is hugely encouraging and I look forward to
providing regular updates as matters progress."
For
further information, please contact:
Baron Oil
Plc
+44 (0) 20 7117 2849
Dr Andy Butler, Chief Executive
Officer
Allenby Capital
Limited
+44 (0) 20 3328 5656
Nominated Adviser and Joint
Broker
Nick Athanas, Nick Harriss, George
Payne (Corporate Finance)
Kelly Gardiner, Stefano Aquilino
(Sales and Corporate Broking)
Cavendish Capital Markets
Limited
+44 (0) 131 220 6939 / +44 (0) 207 397
8900
Joint
Broker
Neil McDonald, Pearl Kellie
(Corporate Finance)
Leif Powis (Sales)
IFC
Advisory
Limited
+44 (0) 20 3934 6630
Financial PR and
IR
baronoil@investor-focus.co.uk
Tim Metcalfe, Florence
Chandler