Baron Signed a Farm-Out Agreement with Vale

Source: www.gulfoilandgas.com 9/10/2014, Location: South America

Baron Oil plc, the independent oil and gas exploration and production company focused on Latin America, is pleased to make the following announcement.

Peru - Block XXI

Farm-out Agreement with Vale.

Baron Oil is pleased to announce that a Farm-out Agreement (FOA) has been signed with Vale Oil and Gas, Peru.

In 2012 Vale the large Brazilian mining company began a divestment program of its oil and gas interests worldwide. The Vale interest in Block XXI located onshore northwest Peru was one of the last remaining upstream oil and gas licenses that they retained. However Vale has now signed an agreement to transfer back to Baron Oil (Gold Oil Peru SAC) their entire 70% working interest in Block XXI plus pay Baron Oil US$3.5 million.

Baron Oil is now the owner of a 100% working interest in Block XXI.

A large gravimetric survey (totaling 8,000 kilometers) was acquired for the company by the Geotechnical Company Fugro in December 2012. The results of this survey show a very prospective deep sedimentary basin in the central and southern part of this large block. No seismic coverage currently exists in this part of the basin. It is interesting to note that a shallow well (Minchales-1) drilled in 1954, in the most southern part of the block, encountered several gas shows. The well was not completed as natural gas had no commercial value at that time. The southern part of Block XXI is adjacent to the Olympic operated Block XIII where several commercial hydrocarbon wells were recently drilled. Block XXI is also located near several large industrial plants creating a very attractive local gas market requiring little infrastructure investment.

Baron Oil remains focused on the rapid completion of the EIA (Environmental Impact Assessment) in the Block XXI geographical area. Once EIA approval is received Baron plans to shoot 400-500 kilometers of 2D seismic data and once interpreted thoroughly, drill 2-3 relatively shallow exploratory wells.

The Company is now fully funded to carry out these activities in Peru.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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