Peru Block XXI – El Barco
Baron has a 100% operated interest in onshore Block XXI, in the Sechura Desert of northern Peru. We continue to pursue efforts to drill the proposed 1,850 metre El Barco-3X well to test for low-risk gas in the Mancora Sands and higher-risk oil and gas in fractured basement, but progress has been severely hampered by the ongoing COVID-19 issues.
The Company is required to hold workshops to present its drilling and environmental plans to the local communities and complete negotiations to gain access to the site with the local community President. None of this can take place until free movement is allowed. We are hopeful that between May and August 2021 is an achievable target for the start of drilling operations.
Block XXI will remain in Force Majeure until the Company is able to conclude the workshops and reach agreement regarding access to the site with the local community. Baron will have approximately six months during which to drill once Force Majeure is lifted. The pre-COVID estimate for site preparation and drilling of El Barco-3X was US$1.2 million and updated estimates have been requested from four drilling companies. We continue to work on ensuring that the licence remains in good order through dialogue with Perupetro to confirm the three-year extension option for Block XXI, contingent on the drilling of El Barco-3X. Unrisked P50 recoverable Prospective Resources for the low-risk Mancora Sand are estimated internally by Baron to be 14 BCF. The co-located higher-risk fractured Amotape Basement target is estimated to contain unrisked P50 recoverable Prospective Resources of 8.5 million barrels of oil, with significant upside that the basement may be part of a much larger structure.