Baron Oil losses widen amid issues in Timor and Peru

Asia, Latin America and UK-focussed oil and gas exploration company Baron Oil reported an operating loss of £0.53m for its first half on Friday, widening from £0.31m year-on-year.

The AIM-traded firm said its net loss after finance costs and tax came in at £0.7m for the six months ended 30 June, compared to £0.31m a year earlier, representing losses of 0.02p per share, which was in line with the losses per share in the first half of 2019.

Available cash balances totalled £1.8m at period end, compared to £0.61m a year earlier.

The company undertook a placing and subscription to raise gross proceeds of £2.5m at 0.1p per share in February.

On 22 April, it acquired a 33.33% interest in SundaGas Timor-Leste Sahul for $0.19m, which was fully impaired under associated company accounting rules.

Baron also paid a further $0.33m in respect of a guarantee bond deposit, which was included in receivables.

The board said its increase in administration expenses was largely accounted for by higher professional fees related to fundraising activities, which included legal, registrar and corporate advisory costs.

In addition, there was a non-cash charge of £63,000 for share-based payments arising on the issue of placing warrants and options.

On the operational front, in Timor-Leste the board said work on the Chuditch production sharing contract (PSC) had been progressed “as far as possible” in the absence of the original raw seismic data.

SundaGas had written to ANPM, requesting a satisfactory response and remedy of the situation.

In Peru, the company said that as soon as free movement in the country is restored,it intended to push on with the drilling of the El-Barco-3X well.

Assuming that Covid-19 restrictions are lifted by the end of the calendar year, it said that drilling between May and August was a “realistic” target.

Finally, in the UK at Inner Moray Firth, on the Dunrobin Prospect the original seismic field data had been located, copied and was being validated.

The board said it looked forward to receiving the results of the studies being carried out by the large European exploration and production company in due course.

In Dorset, the joint venture had agreed to relinquish the Colter Prospect, while work on PEDL330 and PEDL 345 was continuing.

“There are encouraging signs that industry activity is beginning to move again, although oil and gas prices remain depressed,” said executive chairman Malcolm Butler.

“We are pleased that the seismic data on the Dunrobin area has finally been located, enabling reprocessing work to take place.”

Butler said that once the Covid issues have been resolved, the board believed the drilling of El Barco-3X should be able to move forward.

“The situation in Timor-Leste is very frustrating but we will keep shareholders informed of progress.”

At 0913 BST, shares in Baron Oil were down 15.07% at 0.09p.