Baron Oil increases Inner Moray Firth license interest
Baron Oil PLC signed a farm-in agreement to increase its interest in United Kingdom Offshore License P2478 to 32% from 15%, to build on work already undertaken in the license and to accelerate progress, the company said Aug. 18.
Baron agreed with license partners Corallian Energy Ltd. and Upland Resources Ltd. to increase its interest in exchange for paying 100% of the costs of the remaining Phase A work commitments up to a cap of £160,000. All other costs, including, inter alia, license and UK Oil and Gas Authority (OGA) fees and the operator's administrative expenses, will be borne by all of the partners proportionate to their revised interests.
Corallian will remain license operator. Baron will assume the role of technical overseer of the remaining Phase A work commitments. No consideration is payable to Corallian or Upland.
Commencement of the outstanding Phase A technical work commitments is due shortly with the key component, that of 3D seismic reprocessing, expected to be delivered early 2022. Baron believes this will provide the partners sufficient time to mature the UK North Sea Dunrobin prospect and to engage with potential drilling partners. A "drill or drop" decision is expected before the end of Phase A in July 2023.
Covering Blocks 12/27c, 17/5, 18/1, and 18/2 in the Inner Moray Firth area of the North Sea, the license contains the prospective Dunrobin area which consists of large shallow rotated fault blocks which are mapped mostly on 3D seismic data including candidate direct hydrocarbon indicators. Well costs are expected to be about £7 million gross as the prospect lies in shallow water of less than 100 m and the total drilling depth of the well is expected to be about 660 m, Baron said.
Dunrobin is evaluated by Baron to hold gross mean prospective resources of 100 MMbbl (a non-SPE PRMS compliant estimate).
On completion of the agreement, which is subject to OGA approval, the revised interests will be Corallian 36%; Upland 32%; and Baron 32%.
