Baron Oil has increased its interest in a UK North Sea offshore block containing the Dunrobin prospect, dubbed one of the few remaining sizeable undrilled UK North Sea targets.
Baron Oil said this week that Corallian and Upland, its partners in the offshore block Inner Moray Firth area of the North Sea, had agreed for Baron to increase its interest in the block from 15% to 32% in exchange for paying 100% of the costs of the remaining Phase A work commitments up to a cap of £160,000. Baron will not be paying any fee to Upland and Corallian.
According to Baron, the work commitment in this phase includes reprocessing of legacy 2D and 3D seismic data and other studies aimed at reducing risk and refining volumetric estimates ahead of making a "drill or drop" decision before the end of Phase A of the licence in July 2023.
"Well costs are expected to be modest at c. £7 million gross as the prospect lies in the shallow water of less than 100 meters and the total drilling depth of the well is proposed to be approximately 660 meters," Baron said.
Dunrobin is evaluated by Baron to be one of the few remaining targets yet to be drilled in the UK North Sea with estimated gross mean prospective resources of the order of 100 MMbbl.
"In Q1 2021, the joint venture partners received the results of technical studies from a large European E&P company under a work sharing agreement, which enhanced the partners' understanding of the petroleum geology and corroborated their view of Dunrobin as a potentially attractive and substantial target," Baron said.
Corallian will remain the Licence's Operator with Baron assuming the role of technical overseer of the remaining Phase A work commitments.
Baron said that 3D seismic reprocessing is expected to be delivered early in 2022.
"The Board believes that this will provide the partners sufficient time to mature the Dunrobin Prospect and to engage with potential drilling partners in due course," Baron said.
On completion of the Agreement, the revised interests held in the Licence will see Corallian hold36%; Upland 32%; and Baron 32%.
Jon Ford, Technical Director of Baron said the deal more than doubled Baron's interest in the prospective Dunrobin area "at a modest cost, whilst at the same time accelerating the subsurface evaluation towards a decision regarding the potential drilling of an exploration well evaluated to have a sizeable resource target."