UK-based and AIM-listed oil and gas company Baron Oil has decided to terminate a reverse takeover of Singapore-based private E&P company SundaGas.
Baron said on Tuesday that the reverse takeover, announced on November 14, 2019, was amicably terminated due to “uncertainties around the potential capital requirements of the combined group, along with complications in relation to the required restructuring of the SundaGas subsidiaries.”
According to the company, the uncertainties encountered would involve additional costs and time to resolve and give rise to a material risk that the reverse takeover would not be completed in the required timeframe.
The company confirmed that it would re-start trading its shares on AIM with effect from 7.30 AM on January 28, 2020.
Baron will now revert to developing its portfolio of assets as an independent exploration company. Its interests will consist of its entitlement to invest with SundaGas in the Chuditch gas accumulation offshore Timor-Leste, together with a near-term drilling opportunity onshore Peru and assets capable of holding substantial prospective resources in the UK.
In the UK, the company holds 8 percent interests in Dorset offshore license P1918 as well as the PEDL330 and PEDL345 onshore licenses. The firm also has 15 percent stakes in Inner Moray Firth offshore licenses P2470 and P2478.
As for the TL-SO-19-16 PSC or Chuditch, it is located approximately 185 kilometers south of Timor-Leste, 100 kilometers east of the producing Bayu-Undan field and 50 kilometers south of the planned Greater Sunrise development.
Chuditch, operated by SundaGas, covers approximately 3,571 sq. km and contains the Chuditch-1 gas discovery, drilled by Shell in 1998.
Baron will invest in the project via its entitlement to a one-third shareholding in a SundaGas subsidiary SundaGas TLS, equating to an indirect 25 percent interest in the Chuditch. The Chuditch PSC was declared to be fully in effect on December 19, 2019.
During the first two years of the initial three-year term of the Chuditch PSC, there is an obligation to reprocess 800 sq. km of 3D seismic and 2,000 line kilometers of 2D seismic data.
Malcolm Butler, executive chairman of Baron, said: “Baron and SundaGas have agreed jointly that the uncertainties that have arisen involve risks to the completion of the RTO that do not justify the continuation of the process.
“However, Baron’s shareholders will still benefit from the Company’s entitlement to invest in a one-third shareholding in SundaGas TLS. In addition, Baron will retain its full existing interests in Peru and the UK and will continue to operate on a low overhead basis.”
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