The Central Bank of Peru has signed a public deed confirming Baron Oil’s farm-out of 30 percent interest in Block Z-34 offshore Peru to Uruguay’s Union Oil and Gas Group (UOGG).
Baron Oil said on Friday that the deed was the final document affecting the farm-out to UOGG.
Since the deed was signed by the Peruvian Central Bank, UOGG is now liable to pay Baron the sum of $2 million, on which Baron will have to pay Peruvian tax at 32 percent.
To remind, the original farm-in transaction with UOGG was signed in April 2013 and approved in July 2016.
As a result of the farm-out, UOGG increased its stake to 80 percent while Baron Oil holds the remaining 20 percent.
Peruvian oil and gas regulator PeruPetro has already accepted a drilling plan and location for the Cuy offshore exploration well in the Z-34 block which is located in the Talara Basin.
The basin is a host to three prospects, Cuy, Cuy Sur, and Daphne, all located in the northern part of the block. According to Baron’s estimates , the block holds a total of 885 million barrels of oil recoverable, 413 of which are estimated to be in the Cuy prospect.
As a part of the interest transfer agreement between the companies, UOGG is paying 100 percent of all the costs related to the block including the planned drilling of the exploration well.
Offshore Energy Today Staff