By Ian Walker
LONDON--Baron Oil PLC (BOIL.LN) shares rose 16% in early trade
Wednesday, after it took full control of a Peruvian oil and gas
license under a farm-out agreement with Vale Oil and Gas.
Under the agreement, Vale Oil will pay $3.5 million and transfer
its entire 70% working interest in Block XXI to Baron Oil.
Baron Oil, an independent oil and gas exploration and production
company focused on Latin America, said it now plans the "rapid
completion" of an environmental impact assessment in the block.
Once approval is received, the company will shoot 400-500
kilometers of 2D seismic data, whereupon it will drill two-three
relatively shallow exploratory wells. However, it didn't give an
exact timetable for the study and exploration. It previously said
these would be carried out next year.
Shares at 0910 GMT were trading 0.27 pence higher, or 16%, at
2.03 pence.
The company said it is fully funded to carry out these
activities in Peru. It raised 3 million pounds ($4.85 million) via
a share placing back in August towards general working capital.
The southern part of Block XXI is adjacent to the Olympic
operated Block XIII, where several commercial hydrocarbon wells
were recently drilled. Block XXI is also located near several large
industrial plants creating a very attractive local gas market
requiring little infrastructure investment, Baron Oil added.
--Tapan Panchal contributed to this article.
Write to Ian Walker at ian.walker@wsj.com.
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