Baron Oil joint venture rejects new licences after changes

Oil and gas exploration and production company Baron Oil updated the market on its UK operations on Friday, reporting that due to a recent change in the demarcation of the landward-versus-seaward licensing boundary, which has now placed most of the Poole Bay area under landward jurisdiction, the joint venture group operated by Corallian Energy has been informed by the Oil & Gas Authority that the more prospective areas in Blocks 98/11b and 98/12 - provisionally awarded to the joint venture in the 31st Seaward Licensing Round - could now form part of the area offered to the group.

The AIM-traded firm said the revised blocks that were now being offered were no longer adjacent to the Colter South discovery, and no longer included the primary targets that had been identified as part of the application process.

As a result, the joint venture group had decided not to accept the petroleum licence offered over the remaining, seaward parts of blocks 98/11b and 98/12, as it did not fit with the partners' strategy for developing licence P1918.

The company noted that the change did not affect the existing Colter and Colter South Prospects in Block 98/11a, on licence P1918.

Elsewhere in the UK, Baron said that having been formally awarded exclusive licenses P2470 and P2478 in the 31st Round over seven blocks and part blocks in the Inner Moray Firth, the Corallian-operated group was preparing to reprocess the existing 3D seismic data in order to define drillable locations.

Multiple prospects had been identified there, including the Dunrobin prospect where Corallian estimated gross unrisked Pmean recoverable Prospective Resources of 187 million barrels of oil equivalent.

The board said the award was formally announced on 20 September, with Baron holding a 15% interest in each of the two licenses.

“We agree with the group's decision to decline this amended petroleum licence,” said Baron Oil executive chairman Malcolm Butler.

“These changes do not affect our existing licenses and the areas of interest previously identified by the joint venture group remain unlicensed and can be considered for application in the next Landward Licensing Round.”

As at 1131 GMT, shares in Baron Oil were down 3.75% at 0.077p.