Directorate Change

RNS Number : 2306I

Baron Oil PLC

23 March 2015

 

Baron Oil plc ("Baron Oil" or "the company")

Company update

Baron Oil announces an update following the sudden death of our Chairman and CEO Mr Rudolph Berends in early January 2015.

Personnel and Board

Mr Bill Colvin has agreed to formally take over as Chairman and CEO of the company on a permanent basis.  Mr Colvin has been carrying out these roles on an interim basis since early January. Mr Colvin will receive a salary package totalling £170,000 per annum and has today been granted 35,172,141 options to subscribe for ordinary shares in the Company at an exercise price of 1.45p per share exercisable at any time from the date of grant to 23 March 2018.

Further additions will be made to the Board of Directors in due course. Currently the Board consists of Mr Colvin and Mr Camilo Merendoni.

Current cash position

The cash balances currently held by the company are as follows: Sterling £800,000, US dollars $6.6million, (not including the $3.6million held in escrow cash for Block Z-34 work guarantee), in addition US dollars $3.1million are receivable from Vale and Union Oil ("UOGG") for the residual farm-out activity in Peru on Blocks XXI and Z-34. The company anticipate this cash will be received later this year.

Operations

Colombia

NBM field (net 29.5% interest) - Production has been flowing from only one well in the Nancy field. The other wells in the Burdine field were shut-in as the operating costs were running in excess of $100 per barrel in Burdine. Current production levels are around 400 barrels per day from the Nancy well.

The NBM operating licence expires later this year. The company has a 50% investment in the field owning company Invepetrol after selling 50% to a local Colombian company CI Fuels.

Discussions continue with Ecopetrol on the field extension. However the commercial terms on this field production must improve to make this field economic for any third party to operate past the licence expiry date in October 2015.

Peru

Block Z-34 (20% carried interest) - This block remains in a Force Majeure situation awaiting a suitable drilling vessel. The adjoining Block Z-38 operated by Karoon Gas also remains in Force Majeure. In addition UOGG continues to work towards becoming a registered oil and gas company in Peru. We anticipate they will become registered in the first half of this year and this releases the balance of the Z-34 farm-out cash to us of US$2million.

Block XXI (100% interest) - We still await formal EIA approval from the Government so we can begin seismic acquisition work on this block. However we continue to have active and fruitful discussions with a seismic contractor around the design and scope of the onshore acquisition, processing and interpretation programme. This activity will be focused around the Minchales well in the southern area of the Block which logged oil and gas shows when it was drilled 60 years ago.

The company will provide updates on these assets as appropriate.

Bill Colvin Chairman/CEO commented:  "We all miss Rudolph but we will continue to build on the great work he did both in farming-out Block Z-34 and generating significant amounts of cash for investment in the Latin American exploration sector, a sector that he believed in passionately.

Progress in our exploration efforts in Peru has been slower than we would all have liked but we are using the extra time to analyse our existing data and acreage to design the most cost effective seismic programme.

I want to preserve our scarce cash resources as much as possible as I believe the company will have several potential investment opportunities available to it in the current lower commodity price environment."

For further information on the Company, visit www.baronoilplc.com or contact:

Baron Oil plc Bill Colvin, Chairman and Chief Executive	[phone]
Cantor Fitzgerald Europe (Nomad and Broker) Sarah Wharry, Corporate Finance Richard Redmayne, Corporate Broking	[phone]

 

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