23rd Oct 2014 08:01
LONDON (Alliance News) - Shares in Baron Oil PLC rose in early trade on Thursday after the company said it has obtained approval in Peru to move to a drilling programme at the Block Z-34 well and said studies conducted on the Block XXI area in Peru showed significantly higher hydrocarbon potential than previously thought.
Baron said it and its partner, Union Oil and Gas Group Corp, have obtained approval from Perupetro SA, the Peruvian state oil company, to start a drilling programme at the Block Z-34 site. Perupetro also approved a Force Majeure clause for the block, extending the time limit for the well to be drilled.
Baron said it and Union intend to partner with Karoon Gas, the operator of the adjoining Block Z-38, in order to minimise the total drilling costs.
In addition, the company said the results from the Block XXI prospect showed significant higher hydrocarbon potential in the areas than previously understood. On the back of the strong results, Baron is planning to acquire 600 km of 2D seismic in the southern area of the block in the early part of 2015.
Baron said it will then start drilling two exploration wells in the second half of 2015 at the block.
"Obtaining approval from Perupetro for a well to be drilled on Block Z-34 is a major breakthrough for the company, and we are looking forward to making more progress in 2015 to exploit the vast potential of our assets both onshore and offshore Peru," said Baron Oil Chief Executive and Chairman Rudolph Berends.
"The presence of a live petroleum system in the southern block of Block XXI is a very welcome surprise and substantially increases the outlook of finding commercial accumulations in this area," added Berends.
Baron Oil shares were among the best performers on the AIM All-Share on Thursday morning, up 9.2% to 1.611 pence, having touched a high for the day of 1.88p.
By Sam Unsted; [email protected]; @SamUAtAlliance
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