UK-listed Baron Oil (LON:BOIL), which operates TL-SO-19-16 PSC offshore East Timor via its subsidiary SundaGas, has significantly boosted its aggregate gas-in-place and recoverable gas resource estimates after reprocessing the Chuditch 3D seismic data.
The best case aggregate gross gas-in-place estimate in the production sharing contract (PSC) has been upgraded to 5.5 trillion cubic feet (cf), and the best case recoverable resource estimate to 3.6 trillion cf.
The Chuditch-1 gas discovery’s best case recoverable resource estimate is 1.35 trillion cf and is “materially larger and may independently represent a liquefied natural gas (LNG) scale resource,” noted Baron in a stock exchange announcement on Monday 24 October.
The company’s share price surged ahead of the announcement, almost tripling from GBP 0.1105 on Thursday 18 October to 0.3080 on Friday 21 October. It closed at GBP 0.1710 on Tuesday 25 October.
Speculation that big oil companies, such as Italy’s Eni, are considering farming into Chuditch, as well as the resource upgrade, has made investors bullish on the company.
SundaGas hopes to drill exploration and appraisal wells on Chuditch in late 2023 to enable it to move towards development and production of gas.
Earlier this year, the explorer told Energy Voice that it is interested to bring new investors into the project either via farm-ins or through a direct corporate investment.
“If the results of the 3D seismic merit it, Sunda will be drilling an appraisal well in 2023 and the company would like to drill more exploration wells following that. Each well is expected to cost around $20 million,” the company’s CEO Andy Butler said in March.
East Timor’s national oil company, which holds a 25% stake in the TL-SO-19-16 PSC, is free carried, which is the norm in the country, also known as Timor Leste.
Sunda is planning to develop any commercial gas reserves via a floating LNG facility (FLNG).
Baron said last month that the fastest development and export option is likely to be “a hybrid floating and platform LNG system”, which it said does not require export pipelines or border crossings.
Baron said it is looking at a fast-track development pathway “that targets first production in 2028. Management estimates of project economics continue to be attractive at current and long-term average gas prices in Asia.”