Independent Resource Update for the Chuditch PSC

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310

14 July 2021

Baron Oil Plc

("Baron" or the "Company")

Independent Resource Update for the Chuditch PSC

Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration company, is pleased to announce the results of an independent review of Prospective Resources by THREE60 Energy Asia Sdn. Bhd. ("THREE60 Energy") for the TL-SO-19-16 Production Sharing Contract, offshore Timor-Leste (the "Chuditch PSC" or the "PSC").

Key Points

·    Independent review of the Chuditch PSC, validated to SPE PRMS 2018 industry standards, indicates gross Mean Prospective Resources of 3,368 Bscf of gas and 30 MMbbl of condensate, equivalent to a total of 592 MMBOE.

·  Subsurface risks for prospects and lead estimated to be low since they share analogous geological characteristics to the Chuditch-1 and other gas discoveries in adjacent Timor-Leste and Australian waters.

·   High Estimate of gross Prospective Resources equivalent to 1,156 MMBOE may reflect potential for a single, large accumulation.

Background

Baron's Timor-Leste subsidiary SundaGas Banda Unipessoal, Lda. ("Banda" or "SundaGas Banda") holds a 75% operating interest in the Chuditch PSC, offshore Timor-Leste. The remaining 25% interest in the PSC is held by TIMOR GAP Chuditch Unipessoal, Lda., a subsidiary of the Timor-Leste state oil company, which is carried for all exploration and development costs through to first production. Baron therefore has an effective interest of 75% in the PSC.

Banda commissioned THREE60 Energy to critically review and validate Banda's interpretation of available subsurface data and to perform independent volumetric and risk factor calculations on the Chuditch-1 discovery and the adjacent prospects and lead. THREE60 Energy independently assessed the petrophysics, reservoir geology and reservoir engineering aspects of Chuditch-1. THREE60 Energy did not undertake an independent seismic interpretation, but reviewed in detail Banda's mapping, which is based on the 2D seismic data available to date.

As previously announced, Banda has now licensed pre-existing 3D seismic data which are being reprocessed by TGS-NOPEC Geophysical Company ASA ("TGS") and it is intended that these data will be incorporated in future resource updates at the appropriate junctures.

THREE60 Energy assessed volumes of gas and associated condensate, the latter being included in Baron's published resource assessments for the first time.

THREE60 Energy has applied to its resource volume estimates the definitions and guidelines set out in the 2018 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG), the Society of Petroleum Evaluation Engineers (SPEE), the Society of Exploration Geophysicists (SEG), the Society of Petrophysicists and Well Log Analysts (SPWLA) and the European Association of Geoscientists & Engineers (EAGE) - abbreviated to the "SPE PRMS 2018".

Prospective Resources

The table below summarises THREE60 Energy's independent assessment of Gross Prospective Resources, from which are derived the Net Prospective Resources attributable to Baron's 75% effective interest, wholly within the Chuditch PSC licence areas. Totals are by arithmetic summation.

Notes:

·       Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from unappraised or undiscovered accumulations. Volumes are reported in billions of standard cubic feet (Bscf) of gas and millions of barrels (MMbbl) of associated condensate.  Conversion of gas to barrels of oil equivalent (BOE) applies a ratio of 1 BOE is equivalent to 6,000 scf.

·       Low, Best and High estimates correspond to the 1U, 2U and 3U Prospective Resource categories defined in SPE PRMS 2018.  These in turn correspond to the P90, P50 and P10 volumes of the probabilistic Prospective Resource range.

·       Arithmetic summation of P90, P50, P10 values is not statistically correct, and therefore we adopt SPE PRMS 2018 guidance in referring to the corresponding totals for Low, Best and High estimates.

·       "Risk Factor" for Prospective Resources, means Chance of Geologic Discovery (Pg) for the specific prospect success outcome to which the reported resource estimates pertain.  THREE60 Energy has ensured that the risk value is appropriate for the stated resource size distribution.  This, then, is the chance or probability of the Prospective Resource maturing into a Contingent Resource.

·       A second risk factor applicable to Pg, i.e. Chance of Development (Pd), has not been assessed.

·       "Gross Attributable" are 100% of the resources attributable to the licence whilst "Net Attributable" are those attributable to Baron's effective interest in the PSC (75%).

Jon Ford, Technical Director of Baron commented…

"THREE60 Energy's independent review of Prospective Resources confirms our view that the Chuditch PSC contains the significant hydrocarbon potential of some 592 MMBOE of aggregate gross Mean Prospective Resources, now validated to the SPE PRMS 2018 industry standard. Moreover, subsurface risks are considered to be low since the prospects and lead share analogous geological characteristics to the Chuditch discovery itself, as well as with other large gas discoveries in Timor-Leste and adjacent Australian waters. We note THREE60 Energy's High estimate of aggregate gross Mean Prospective Resources, of approximately 1,156 MMBOE, which we believe reflects the potential for a single, large accumulation incorporating the Chuditch discovery and the adjacent prospects and lead."

"The ongoing 3D seismic reprocessing has the potential to reduce the range of volumetric uncertainty, including investigating the single large accumulation concept, reducing subsurface risk, and providing multiple drilling location candidates. On completion of this work and associated studies, some or all of the resources in the Chuditch-1 discovery may be reclassified from Prospective to Contingent."

Qualified Person's Statement

Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and Gas Companies, the technical information and resource reporting contained in this announcement has been reviewed by Jon Ford BSc, Fellow of the Geological Society, Technical Director of the Company. Mr Ford has more than 39 years' experience as a petroleum geoscientist. He has compiled, read, and approved the technical disclosure in this regulatory announcement.

About THREE60 Energy Asia Sdn. Bhd.

THREE60 Energy is an independent consultancy specialising in petroleum reservoir assessment and asset evaluation. It offers a full range of integrated E&P consulting solutions, from exploration, appraisal, field development planning, well drilling and completions to reservoir management and production optimisation. Based in Kuala Lumpur, Malaysia, THREE60 Energy currently has operations in Asia Pacific, Europe, and Australia.

THREE60 Energy is independent of SundaGas Banda and is remunerated by way of a fee that is neither linked to the value of SundaGas Banda nor their entitlement to Petroleum Resources volumes. Neither THREE60 Energy nor any of its directors, staff or sub-consultants who contributed to the report has any interest in SundaGas Banda, its subsidiaries, or any of its assets or securities.

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