Asset A&D

Baron Oil to Acquire an Indirect 38.75% Interest in the Chuditch PSC

By Isha Makkar
March 24, 2021
3 minutes read

LSE-listed Baron Oil Plc has entered into a conditional Amended and Restated Shareholders Agreement (Amended SHA) with a wholly-owned subsidiary of SundaGas Pte Ltd., pursuant to which Baron Oil will increase its shareholding in SundaGas (Timor-Leste Sahul) Pte Ltd. (SundaGas TLS) from 33.33% to 85% in exchange for certain carry-funding obligations.

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. State-owned Timor Gas e Petroleo EP (Timor GAP) holds the remaining 25% carried interest. As a result of this transaction, Baron Oil’s indirect interest in the PSC will increase from 25% to 63.75%, with SundaGas Resources holding the remaining indirect 11.25% interest.

Under the terms of the Amended SHA, Baron Oil will acquire an additional 51.67% stake in SundaGas TLS, in exchange for funding 100% of the future costs associated with the Chuditch PSC (estimated at approximately US$3.5 million, including approximately US$1.2 million towards the work program) until the end of the first commitment period in November 2022.

As part of the transaction, SundaGas Banda will enter into an agreement with Spectrum Geo Australia Pty Ltd., a wholly-owned subsidiary of TGS-NOPEC Geophysical Company ASA, for the licensing and reprocessing of the 3D seismic data required under the Chuditch PSC work programme.

The Chuditch PSC covers an area of 3,571 sq. km, located approximately 185 km south of Timor-Leste in the Timor Sea. The license 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. The drill or drop decision in the license is to be made by December 19th, 2022. The Chudith PSC has estimated mean prospective resources of approximately 3,527 billion cubic feet equivalent (Bcfe).

“There has been a marked increase in Timor-Leste gas exploitation activity recently and we are delighted to have had both the opportunity to increase our indirect interest in the Chuditch asset as well as the support of new and existing investors to fund this exciting project. We look forward to updating shareholders on progress,” said Andy Yeo, CEO of Baron Oil.

London-based Baron Oil is 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 focused on exploring and developing gas opportunities across South East Asia, and currently holds a 100% interest in the Telen PSC located offshore Kalimantan, Indonesia and a 75% operated interest in the Chuditch PSC.

The transaction is subject to customary closing conditions.

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