Further to the Company's announcement on 18 December 2023, Baron Oil today announced that the farm-up agreements between Baron's wholly owned subsidiary SundaGas Banda Unipessoal, Lda. ("SundaGas") and TIMOR GAP Chuditch Unipessoal Lda ("TIMOR GAP") in relation to the TL-SO-19-16 Production Sharing Contract (the "Chuditch PSC" or the "PSC"), offshore Democratic Republic of Timor-Leste, have been signed.

The Farm-Up Agreements are now subject to a single condition precedent ("Condition Precedent"), that of approval of the Farm-Up by Timor-Leste's National Petroleum Authority (Autoridade Nacional do Petróleo or "ANP").

The Baron Directors consider that the Farm-Up by TIMOR GAP has a value to Baron of approximately US$8.5 million made up of a reimbursement for back costs of c.US$1 million and in the offset of future spend which in 2024 is estimated to be around US$7.5 million. The cash payments from TIMOR GAP relating to back costs will be finalised upon Completion and will be paid to Baron within 30 days of the Completion date.

The operational plan remains to drill and flow test the Chuditch-2 appraisal well in late 2024, subject to rig and drilling services availability and the completion of drill financing.

Terms of the Farm-Up

On completion of the Farm-Up ("Completion"), SundaGas, will retain operatorship and hold a 60% working interest in the Chuditch PSC, while TIMOR GAP will have a 40% interest, made up of a new paying 15% interest, plus its original 25% interest which is carried to first gas. From Completion, TIMOR GAP will be responsible for paying 20% of all costs, including the drilling of the planned Chuditch-2 appraisal well.

The transfer of the 15% working interest from SundaGas to TIMOR GAP will not occur until the sole Condition Precedent has been fulfilled.

The Farm-Up Agreements are governed by the laws of Timor-Leste.

If the Condition Precedent has not been satisfied or waived before 00:00 hours in Dili on 31 March 2024 ("Long Stop Date"), then, the Farm-Up Agreements may be terminated by either party at any time prior to the satisfaction or waiver of the Condition Precedent.

Andy Yeo, Chief Executive of Baron Oil Plc, commented:
"We're delighted to have now signed the documents to increase TIMOR GAP's participation in the Chuditch PSC through the assignment of a paying interest. The expedited preparation and execution of these agreements demonstrates our excellent working relationship, and we thank TIMOR GAP for their engagement in our overall combined efforts to progress the Chuditch PSC."

KeyFacts Energy: Baron Oil Timor Leste country profile