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Baron Oil PLC on Tuesday said that its subsidiary, SundaGas Banda Unipessoal Lda, will have to decide whether to start drilling at its Timor-Leste site following the receipt of a contract extension.
Baron Oil is a London-based oil and gas exploration company with assets in the UK, Peru and Timor-Leste. It holds a 75% working interest in, and also operates, the offshore Chuditch production sharing contract, 185 kilometres east of the Bayu-Undan field and 185 kilometres south of Timor-Leste.
Baron Oil shares were trading 28% higher at 0.11 pence each in London on Tuesday morning.
The contract year two for Chuditch has been granted a six-month extension by Autoridade Nacional do Petroleo e Minerais, the National Petroleum and Minerals Authority of Timor-Leste.
The Chuditch contract covers 3,571 square-kilometres in water depths of 50 to 100 metres, and is designed to reprocess and interpret legacy 3D seismic data.
Baron Oil, through SundaGas Banda, now has until June 18 to decide whether to start drilling. Subject to "satisfactory" results, a well will be drilled in the final year of the first phase.
An amendment to the contract has also simplified work obligations. After discovering it was necessary to reprocess a larger volume of 3D seismic data, the company has replaced its original 2D seismic reprocessing commitment with an additional 200 square-kilometres of additional 3D seismic reprocessing.
Baron Oil said that, following the delivery of 3D pre-stack depth migration data, all of its seismic reprocessing obligations have been met.
The company is continuing to analyse reprocessed data, the results of which will provide a comprehensive view of the value and potential of Chuditch.
"This extension to the PSC timeline comes alongside significant progress being made on the 3D PSDM seismic interpretation," said Technical Director Jon Ford.
"We are working to integrate these strands to produce what we believe will be a compelling assessment of the asset and allow us to plan our next steps."
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