Baron Oil Increases Chuditch Stake
LSE-listed Baron Oil Plc has entered into agreement with a wholly-owned subsidiary of privately-held SundaGas Pte Ltd. to acquire the remaining 15% of SundaGas (Timor-Leste Sahul) Pte Ltd. (SundaGas TLS), in exchange for approximately GBP 926,000 payable in stock. SundaGas TLS’s sole asset is 100% ownership in SundaGas Banda Unipessoal Lda., which holds a 75% operated interest in the Chuditch PSC, offshore Timor-Leste.
As a result of this transaction, Baron Oil will become the sole shareholder of SundaGas TLS, and will have a 75% indirect interest in the PSC. State-owned Timor Gas e Petroleo EP (Timor GAP) holds the remaining 25% interest.
Under the terms of the deal, the consideration is comprised of approximately 1.15 billion new Baron Oil common shares, valued at GBP 0.08 per share based on the company’s closing share price on June 17th, the last trading day prior to transaction announcement.
The Chuditch PSC covers an area of 3,571 sq. km, located offshore approximately 185 km south of Timor-Leste. The current license for the PSC was awarded in November 2019, and expires in November 2021. The PSC contains the Chuditch-1 Gas discovery, as well as the Chuditch West, Chuditch North, Chuditch South West, and Chuditch North East prospects.
Chuditch is estimated to contain material volumes of sales gas, with significant upside within and adjacent to the discovery, and in multiple exploration prospects and leads that have been identified along trend. Estimated mean prospective resources stand at approximately 3.5 trillion cubic feet equivalent (Tcfe) of gas. The drill or drop decision in the license is to be made by December 2022.
“We consider that the share exchange is value accretive and further increases our prospective resource base. We believe that our alignment with the experienced South East Asian based SGPL team will improve the chances of success of attracting drill funding in 2022, which will benefit both existing and our new shareholders,” commented Andy Yeo, Chief Executive of Baron Oil.
London-based Baron Oil is currently focused on oil & gas opportunities in the UK, Latin America and SE Asia, and currently holds a 100% interest in Block XXI in Peru and an 8% working interest in the Colter prospect in the English Channel. In September 2019, Baron Oil was awarded licenses over seven blocks and part blocks in the Inner Moray Firth as part of the 31st Offshore UKCS Licensing Round.
Singapore-based SundaGas is engaged in operations across South East Asia, and currently holds a 100% interest in the Telen PSC located offshore Kalimantan, Indonesia.