Baron Oil nets North Sea Option Agreement

If Baron exercises the option before the 28 February deadline, it would pay 20% of the £4.2m well costs plus £6,500 in back costs to earn a 15% interest in the licence, which contains the Wick prospect where drilling is set to commence in September.

The agreement is held with Corfe Energy and licence operator Corallian Energy.

Bill Colvin, chairman of Baron Oil, said: "The Wick Prospect offers an excellent opportunity to drill a relatively low-risk well this year with significant potential and provides the possibility of early, low cost development. Success in the Wick well would provide shareholders with a meaningful uplift in the asset value of the Company."

Baron is hoping to move forward with its wholly owned onshore Peru Block XXI site with the intention to drill a well within the next six months at a cost of $1.4m and to a depth of 1,850 metres, and is currently in discussions with a third party who is interested in participating with the project.

"Now that we have the funds, we will finally be able to move forward with the drilling of the El Barco well in our 100% owned onshore Peru Block XXI and we are encouraged by third party interest in the prospect," said Colvin.

Baron Oil is an AIM listed independent oil and gas exploration and production company with interests primarily located in Latin America.

As of 1538 GMT, Baron Oil’s shares were surging 32.69% to 0.35p.