Baron Oil to sell 15% stake in Chuditch PSC offshore Timor Leste
UK-listed Baron Oil will divest 15% stake in the Chuditch production sharing contract (PSC) offshore Timor-Leste to its existing partner, Timor Gap, the national oil company of Timor-Leste, it said on December 18.
Baron's subsidiary, SundaGas Banda Unipessoal, has entered into a memorandum of understanding (MoU) with Timor Gas outlining the proposed farm-out.
Upon completion of the deal, SundaGas will retain operatorship and hold a 60% working interest in the Chuditch PSC, while Timor Gap will have a 40% interest. This includes a new paying 15% interest and its original 25% interest carried to first gas. The deal is subject to approval by the board of directors of Timor Gap and Timor-Leste's National Petroleum Authority (ANP).
Baron estimates that the farm-out will bring a value of approximately $8.5mn to the company, covering prior costs and offsetting future spend. Additionally, the move is seen as a positive step in preparing for the Chuditch-2 appraisal well and advancing financing plans, with discussions ongoing with potential funding partners, the company added.
Timor Gap's commitment through the deal is expected to simplify the transaction, given its existing partnership in the PSC. SundaGas is planning to drill and flow test the Chuditch-2 appraisal well in late 2024, subject to rig and drilling services availability and completion of drill financing.
The Chuditch PSC is located approximately 185 km south of Timor-Leste, 100 km east of the producing Bayu-Undan field, and 50 km south of the planned Greater Sunrise development. It covers an area of approximately 3,571 km2, in water depths of 50-100 m, and contains the Chuditch-1 gas discovery drilled by Shell in 1998.
Baron earlier this month announced an extension to year two of the contract for the Chuditch PSC. According to Baron, the Chuditch PSC holds an estimated gross unrisked resources of 1.1bn barrels of recoverable oil equivalent.