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Baron Oil PLC on Monday said it has signed a memorandum of understanding with Timor Gap Chuditch Unipessoal Lda for the farm-up of the Chuditch production sharing contract, offshore Timor Leste. Baron Oil shares up 1.0% to 0.083 pence on Monday afternoon in London. The stock is down 40% over the past year. Baron Oil is a London-based oil and gas exploration and appraisal company, while Timor Gap is the existing joint venture partner on the sharing contract and a wholly-owned subsidiary of Timor Gap EP, the Timor-Leste national oil and gas company. SundaGas Banda Unipessoal Lda, Baron’s wholly owned subsidiary, has entered into a memorandum with Timor Gap. This includes an obligation to enter a farm-up, which is expected to have a value to Baron of $8.5 million. Once the farm-up is complete, SundaGas will retain operatorship and hold a 60% working interest in the Chuditch contract, while Timor Gap will have a 40% interest, made up of a new paying 15% interest, plus its original 25% interest which is carried to first gas. From completion, Timor Gap will be responsible for paying 20% of all costs, including the drilling of the planned Chuditch-2 appraisal well. In 2024, this contribution is estimated to be around $7.5 million. SundaGas also will receive cash payments from Timor Gap, which are estimated to be $1 million relating to back costs covering the period from the signing of the contract to the anticipated date of completion. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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