Baron Oil (BOIL) shares have rallied 400% since an announcement on Tuesday outlining the findings of a report conducted on the 1998 Chuditch-1 Discovery in Timor-Leste.
The report, prepared by Shell Australia in 1998 and 2001, indicated that drilling encountered a 25m gas column and estimates of gas in place of 2,320 BCF.
The recovery rate Shell’s internal team forecasted was between 55% to 75%. Baron Oil considered this to suggest prospective resources of $1276 to 1740 BCF.
As a result, Baron told investors it intends to invest in the Chuditch PSC project through its entitlement to a one third shareholding in SundaGas, resulting in an indirect net 25% interest in the PSC.
Shares in Baron Oil were trading 159% higher at 0.285p on Thursday, up 400% since Monday
Dr Malcolm Butler, Executive Chairman of Baron, said: "The information from the Shell reports gives a clear indication of the substantial potential for hydrocarbons within the Chuditch PSC”
He said: “Now that the Chuditch PSC has been confirmed and the guarantee bond posted, the work programme over the next three years is designed to further define the size of the Greater Chuditch accumulation and the potential of nearby untested prospects, through seismic reprocessing and drilling, in order to formulate plans for commercialisation.”
“The figures computed by Shell clearly indicate the size of the potential prize.”
Baron Oil said the report assessed the risks associated with trap, reservoir and charge for the Greater Chuditch closure were considered by Shell to be zero. The uncertainty was around the volumes in place.
Mr. Butler went on to say: "Much has changed in Timor-Leste since the late 1990's, including the declaration of independence in 2002 and ratification of the Maritime Boundary treaty with Australia in 2019.”
“In addition, gas markets have grown tremendously in Asia Pacific and, in the Timor Sea region, gas infrastructure and associated LNG facilities have been established."
Follow News & Updates from Baron Oil here: