Baron Oil has signed multiple agreements with Corallian Energy to earn working interests in licences on the UK Continental Shelf (UKCS).
The first agreement will allow Baron to earn a 5% working interest in UKCS Licence P1918, which contains the Colter prospect in Bournemouth Bay.
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The Colter prospect, on which a well is scheduled to be drilled this year, is located south-east of the Wytch Farm oilfield.
The well will be drilled to a total depth of 1,800m subsea in a water depth of 16m in a bid to appraise the prospect.
Based on mapping of 3D seismic data, Corallian determined that the 98/11-3 well has the potential to hold unrisked P50 prospective resources of 26.8 million barrels of oil recoverable from the reservoir.
Subject to the receipt of regulatory approvals, the drilling of the well is expected to take place in the second or third quarter of this year, at an aggregate cost of around £6.4m.
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By GlobalDataPursuant to the agreement with Corallian, Baron is required to fund 6.67% of the costs associated with the well, capped at a gross cost of £8m.
Baron Oil chairman and CEO Malcolm Butler said: “The Prospect lies very close to Wytch Farm oilfield and, subject to agreement with the field partners, any discovery would likely make use of these existing facilities, enabling development to take place very quickly.
“The signature of this Farmout agreement and that for the Wick prospect completes a portfolio that is planned to give Baron’s shareholders exposure to three significant wells in 2018.”
The total consideration to be paid by the company is expected to be around £425,000 in exchange for the ownership of a 5% interest in the licence.
Meanwhile, the second farmout agreement requires Baron to finance 20% of the costs related to the first well on the Wick Prospect to earn a 15% interest in licence P2235.
