UK-based Baron Oil has agreed to increase its stake in licence P2478 offshore UK through an agreement with partners Corallian Energy and Upland Resources.
The farm-in deal will more than double the oil firm’s stake from 15% to 32% in the licence, which contains the prospective Dunrobin area.
Under the deal, Baron Oil will acquire the interest in exchange for funding the remaining commitments up to a £160,000 cap for the Phase A work.
The licence partners will bear the other costs such as inter alia, licence and UK Oil and Gas Authority (OGA) fees, proportionate to their revised stakes.
Baron will serve as technical overseer of the remaining Phase A work commitments.
The P2478 licence was awarded to Corallian Energy (45%), Upland Resources (40%), and Baron (15%) in September 2019. Corallian is the operator for the licence.
Upon the completion of the deal, the stakes of Corallian and Upland in the licence will reduce to 36% and 32% respectively. Corallian will continue to serve as a licence operator.
Baron Oil considers the Dunrobin prospect as one of the few remaining sizeable undrilled targets in the UK North Sea
According to Baron estimates, the Dunrobin area holds gross mean prospective resources of 100 million barrels (MMbbl).
Baron technical director Jon Ford said: “This agreement, in keeping with our corporate strategy, more than doubles Baron’s interest in the prospective Dunrobin area at a modest cost, whilst at the same time accelerating the subsurface evaluation towards a decision regarding the potential drilling of an exploration well evaluated to have a sizeable resource target.”
The partners plan to start the outstanding Phase A technical work commitments in the near future.