TIDMBOIL
RNS Number : 1411F
Baron Oil PLC
14 July 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310
14 July 2021
Baron Oil Plc
("Baron" or the "Company")
Independent Resource Update for the Chuditch PSC
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration
company, is pleased to announce the results of an independent
review of Prospective Resources by THREE60 Energy Asia Sdn. Bhd.
("THREE60 Energy") for the TL-SO-19-16 Production Sharing Contract,
offshore Timor-Leste (the "Chuditch PSC" or the "PSC").
Key Points
-- Independent review of the Chuditch PSC, validated to SPE PRMS
2018 industry standards, indicates gross Mean Prospective Resources
of 3,368 Bscf of gas and 30 MMbbl of condensate, equivalent to a
total of 592 MMBOE.
-- Subsurface risks for prospects and lead estimated to be low
since they share analogous geological characteristics to the
Chuditch-1 and other gas discoveries in adjacent Timor-Leste and
Australian waters.
-- High Estimate of gross Prospective Resources equivalent to
1,156 MMBOE may reflect potential for a single, large
accumulation.
Background
Baron's Timor-Leste subsidiary SundaGas Banda Unipessoal, Lda.
("Banda" or "SundaGas Banda") holds a 75% operating interest in the
Chuditch PSC, offshore Timor-Leste. The remaining 25% interest in
the PSC is held by TIMOR GAP Chuditch Unipessoal, Lda., a
subsidiary of the Timor-Leste state oil company, which is carried
for all exploration and development costs through to first
production. Baron therefore has an effective interest of 75% in the
PSC.
Banda commissioned THREE60 Energy to critically review and
validate Banda's interpretation of available subsurface data and to
perform independent volumetric and risk factor calculations on the
Chuditch-1 discovery and the adjacent prospects and lead. THREE60
Energy independently assessed the petrophysics, reservoir geology
and reservoir engineering aspects of Chuditch-1. THREE60 Energy did
not undertake an independent seismic interpretation, but reviewed
in detail Banda's mapping, which is based on the 2D seismic data
available to date.
As previously announced, Banda has now licensed pre-existing 3D
seismic data which are being reprocessed by TGS-NOPEC Geophysical
Company ASA ("TGS") and it is intended that these data will be
incorporated in future resource updates at the appropriate
junctures.
THREE60 Energy assessed volumes of gas and associated
condensate, the latter being included in Baron's published resource
assessments for the first time.
THREE60 Energy has applied to its resource volume estimates the
definitions and guidelines set out in the 2018 Petroleum Resources
Management System prepared by the Oil and Gas Reserves Committee of
the Society of Petroleum Engineers (SPE) and reviewed and jointly
sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG), the Society of
Petroleum Evaluation Engineers (SPEE), the Society of Exploration
Geophysicists (SEG), the Society of Petrophysicists and Well Log
Analysts (SPWLA) and the European Association of Geoscientists
& Engineers (EAGE) - abbreviated to the "SPE PRMS 2018".
Prospective Resources
The table below summarises THREE60 Energy's independent
assessment of Gross Prospective Resources, from which are derived
the Net Prospective Resources attributable to Baron's 75% effective
interest, wholly within the Chuditch PSC licence areas. Totals are
by arithmetic summation.
Prospective Gross Attributable to Net Attributable to Risk Operator
Resources Licence Baron Oil plc Factor
------------- ------------------------------------------- ------------------------------------------- ------- ---------
Low Best High Mean Low Best High Mean
Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate
------------- ------- ---------
(1U) (2U) (3U) (1U) (2U) (3U)
------------- --------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Gas (Bscf)
---------------------------------------------------------------------------------------------------------------------------
Chuditch SundaGas
Discovery 457.0 713.3 1,077.0 729.0 342 535 808 547 100% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
W Prospect 162.5 405.0 986.9 483.0 122 304 740 362 51% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
SW Prospect 193.1 481.5 1,173.9 575.3 145 361 880 431 40% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
N Prospect 142.4 354.8 864.5 423.0 107 266 648 317 44% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch
NE SundaGas
Lead 389.4 969.8 2,364.7 1,158.0 292 727 1,774 869 20% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Total
Gas (Bscf) 1,344 2,924 6,467 3,368 1,008 2,193 4,850 2,525
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Associated Condensate (MMbbl)
---------------------------------------------------------------------------------------------------------------------------
Chuditch SundaGas
Discovery 1.1 3.3 8.4 3.9 0.8 2.4 6.3 3.0 100% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
W Prospect 0.5 3.1 12.4 4.8 0.4 2.3 9.3 3.6 51% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
SW Prospect 0.6 3.7 14.7 5.8 0.4 2.7 11.1 4.4 40% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
N Prospect 0.5 2.7 10.9 4.2 0.4 2.0 8.2 3.2 44% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Chuditch SundaGas
NE Lead 1.3 7.5 32.1 11.6 1.0 5.6 24.1 8.8 20% Banda
--------- --------- --------- ---------- --------- --------- --------- ---------- ------- ---------
Total
Associated
Condensate
(MMbbl) 4 20 78 30 3 15 59 23
Barrels of Oil Equivalent (MMBOE)
Total
Barrels
of Oil
Equivalent
(MMBOE) 228 508 1,156 592 171 381 867 444
--------- --------- --------- ---------- --------- --------- --------- ---------- -------
Notes:
-- Prospective Resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
unappraised or undiscovered accumulations. Volumes are reported in
billions of standard cubic feet (Bscf) of gas and millions of
barrels (MMbbl) of associated condensate. Conversion of gas to
barrels of oil equivalent (BOE) applies a ratio of 1 BOE is
equivalent to 6,000 scf.
-- Low, Best and High estimates correspond to the 1U, 2U and 3U
Prospective Resource categories defined in SPE PRMS 2018. These in
turn correspond to the P90, P50 and P10 volumes of the
probabilistic Prospective Resource range.
-- Arithmetic summation of P90, P50, P10 values is not
statistically correct, and therefore we adopt SPE PRMS 2018
guidance in referring to the corresponding totals for Low, Best and
High estimates.
-- "Risk Factor" for Prospective Resources, means Chance of
Geologic Discovery (Pg) for the specific prospect success outcome
to which the reported resource estimates pertain. THREE60 Energy
has ensured that the risk value is appropriate for the stated
resource size distribution. This, then, is the chance or
probability of the Prospective Resource maturing into a Contingent
Resource.
-- A second risk factor applicable to Pg, i.e. Chance of
Development (Pd), has not been assessed.
-- "Gross Attributable" are 100% of the resources attributable
to the licence whilst "Net Attributable" are those attributable to
Baron's effective interest in the PSC (75%).
Jon Ford, Technical Director of Baron commented...
"THREE60 Energy's independent review of Prospective Resources
confirms our view that the Chuditch PSC contains the significant
hydrocarbon potential of some 592 MMBOE of aggregate gross Mean
Prospective Resources, now validated to the SPE PRMS 2018 industry
standard. Moreover, subsurface risks are considered to be low since
the prospects and lead share analogous geological characteristics
to the Chuditch discovery itself, as well as with other large gas
discoveries in Timor-Leste and adjacent Australian waters. We note
THREE60 Energy's High estimate of aggregate gross Mean Prospective
Resources, of approximately 1,156 MMBOE, which we believe reflects
the potential for a single, large accumulation incorporating the
Chuditch discovery and the adjacent prospects and lead."
"The ongoing 3D seismic reprocessing has the potential to reduce
the range of volumetric uncertainty, including investigating the
single large accumulation concept, reducing subsurface risk, and
providing multiple drilling location candidates. On completion of
this work and associated studies, some or all of the resources in
the Chuditch-1 discovery may be reclassified from Prospective to
Contingent."
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining
and Oil and Gas Companies, the technical information and resource
reporting contained in this announcement has been reviewed by Jon
Ford BSc, Fellow of the Geological Society, Technical Director of
the Company. Mr Ford has more than 39 years' experience as a
petroleum geoscientist. He has compiled, read, and approved the
technical disclosure in this regulatory announcement.
About THREE60 Energy Asia Sdn. Bhd.
THREE60 Energy is an independent consultancy specialising in
petroleum reservoir assessment and asset evaluation. It offers a
full range of integrated E&P consulting solutions, from
exploration, appraisal, field development planning, well drilling
and completions to reservoir management and production
optimisation. Based in Kuala Lumpur, Malaysia, THREE60 Energy
currently has operations in Asia Pacific, Europe, and
Australia.
THREE60 Energy is independent of SundaGas Banda and is
remunerated by way of a fee that is neither linked to the value of
SundaGas Banda nor their entitlement to Petroleum Resources
volumes. Neither THREE60 Energy nor any of its directors, staff or
sub-consultants who contributed to the report has any interest in
SundaGas Banda, its subsidiaries, or any of its assets or
securities.
For further information, please contact:
Baron Oil Plc +44 (0) 20 7117 2849
Andy Yeo, Chief Executive
Allenby Capital Limited +44 (0) 20 3328 5656
Nominated Adviser and Joint Broker
Alex Brearley, Nick Harriss, Nick Athanas (Corporate
Finance)
Kelly Gardiner (Sales and Corporate Broking)
Turner Pope Investments (TPI) Limited +44 (0) 20 3657 0050
Joint Broker
Andy Thacker
Glossary
Bscf Billion standard cubic feet.
Best Estimate or 2U Denotes the mid estimate qualifying as Prospective Resources. Reflects a volume estimate
that
there is a 50% probability that the quantities actually recovered will equal or exceed
the
estimate.
Chance of Geologic Discovery The estimated probability that exploration activities will confirm the existence of a
significant
accumulation of potentially recoverable petroleum (abbreviated to Pg).
High Estimate or 3U Denotes the high estimate qualifying as Prospective Resources. Reflects a volume
estimate
that there is a 10% probability that the quantities actually recovered will equal or
exceed
the estimate.
Low Estimate or 1U Denotes the low estimate qualifying as Prospective Resources. Reflects a volume estimate
that
there is a 90% probability that the quantities actually recovered will equal or exceed
the
estimate.
Mean Reflects a mid-case volume estimate of resource derived using probabilistic methodology.
This
is the mean of the probability distribution for the resource estimates and may be skewed
by
high resource numbers with relatively low probabilities.
MMbbl Million barrels (in this case meaning associated condensate liquids).
MMBOE Million barrels of oil equivalent. Volume derived by dividing the estimate of the volume
of
natural gas in billion cubic feet by six in order to convert it to an equivalent in
million
barrels of oil and, where relevant, adding this to an estimate of the volume of oil in
millions
of barrels.
Prospective Resources Quantities of petroleum that are estimated to exist originally in naturally occurring
reservoirs,
as of a given date. Crude oil in-place, natural gas in-place, and natural bitumen
in-place
are defined in the same manner.
SPE PRMS The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management System
("PRMS"):
a system developed for consistent and reliable definition, classification, and
estimation
of hydrocarbon resources prepared by the Oil and Gas Reserves Committee of SPE and
approved
by the SPE Board in June 2018 following input from six sponsoring societies: the World
Petroleum
Council, the American Association of Petroleum Geologists, the Society of Petroleum
Evaluation
Engineers, the Society of Exploration Geophysicists, the European Association of
Geoscientists
and Engineers, and the Society of Petrophysicists and Well Log Analysts. Quantities of
petroleum
estimated, as of a given date, to be potentially recoverable from undiscovered
accumulations
by application of future development projects. The total quantity of petroleum that is
estimated
to exist originally in naturally occurring reservoirs, as of a given date. Crude oil
in-place,
natural gas in-place, and natural bitumen in-place are defined in the same manner.
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