Baron sees ‘encouraging’ Peru results
Baron Oil has found “encouraging” results following a 2D seismic data programme on its Block XXI onshore Peru that prompted the London-listed player to further extend the licence period for the area.
The completion of the seismic programme on the 100% Baron-owned licence, acquired by Geo Survey Systems (GSS)for $1.9 million, fulfilled Baron’s work obligation for the current licence period.
Now, following its results, Baron said it will extend the licence period for a further 18 months and also relinquish 20% of the licence area as required under the terms of our exploration contract.
“The seismic data has produced some encouraging results and the company representatives met with (Peru state-owned) Perupetro to review these,” Baron said.
According to the UK junior, the seismic data and subsequent analysis has shown “a small gas accumulation of up to 5 billion cubic feet in sands at around 4425 feet subsurface to the north east of the original Minchales well”, and “several gas chimneys”.
“We believe that gas is leaking up from fractured basement rock at around 6000 feet subsurface, causing the gas chimney effect. Gas shows were encountered in the electric logs at the igneous basement level at the bottom of the original Minchales well,” Baron said.
"We will now work to define a well location and design and cost an exploration well that will enable us to test as many of the potential hydrocarbon bearing zones as possible,” chief executive Bill Colvin said.
“Once we have completed that work we will decide whether to move forward to drill a well, most likely by bringing in a partner to share the drilling costs.”
“We have no additional work commitments by extending the licence as those are all fulfilled already," he said.
Baron shares were up 5.26% on Monday in London.
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