Baron Oil shares jump as company earns Colter Prospect stake

The UK Continental Shelf Licence P1918 contains the Colter Prospect in Bournemouth Bay which is planned to be drilled in the second or third quarter of 2018 at a cost of £6.4m subject to regulatory approvals.

Independent oil and gas exploration and production company Baron Oil will pay 6.67% of the costs for the appraisal well, with the total amount payable estimated at £425,000.

Malcolm Butler, chairman and chief executive of Baron Oil said: "I was deeply involved in the interpretation and identification of the Colter Prospect and I am very pleased that Baron will be able to participate in the drilling of it, albeit with a small interest. The Prospect lies very close to Wytch Farm oilfield and, subject to agreement with the field partners, any discovery would likely make use of these existing facilities, enabling development to take place very quickly."

Wytch Farm oilfield lies to the northwest of the prospect where 3D seismic data from Corallian indicates that the 98/11-3 well lies on the flank of a structure "that has the potential to hold unrisked P50 Prospective Resources of 26.8m barrels of oil."

"The signature of this Farmout Agreement and that for the Wick Prospect completes a portfolio that is planned to give Baron's shareholders exposure to three significant wells in 2018," said Butler.

The company committed to farm into the Wick Prospect last week after entering into an option agreement in February.

As of 0904 GMT, Baron Oil’s shares were up 6.12% at 0.42p.