Wick should spud next month, says Malcolm Butler, chief executive, and Colter in early 2019 though at both locations final permit approval is still awaited from the OGA.
A jack-up rig is on stand-by nonetheless and the aim is to drill both prospects back-to-back.
After many years of waiting, it will be some long overdue activity for shareholders says veteran oil man Butler.
Before his time, admittedly, a farm-in agreement to a block in Peru in 2013 was supposed to be the green light for a deepwater drilling programme.
Years of wrangling later, Baron finally exited the prospect last year.
The only good news was that it got its US$3.6mln guarantee bond back says Butler.
That money topped its cash pile up to US$5.2mln, which is sufficient to fund its share of the costs of both Wick and Colter.
Both are regarded as low risk, medium potential prospects, which, for now, is where Baron is focused says Butler.
“We don’t have the resources for frontier exploration.”
Colter prospect well-known to Baron
Butler knows Colter well. In 2013 through another of his companies, Corfe Energy, he undertook a reprocessing of 3D seismic at the prospect.
Colter sits adjacent to the Dorset-situated field Wytch Farm, which has produced more than 450mln barrels over forty years for BP and others.
Because of that proximity there is a good chance of finding oil, but it is the height of the reservoir above the oil-water contact seen in a well drilled in 1986 that will determine whether it’s commercial says Butler.
Estimates are for recoverable oil of about 23-25mln barrels, which, if the structure allows, should be relatively straightforward to extract given the proximity to Wytch Farm’s infrastructure.
Wells might be drilled from onshore if required.
North East tip of Scotland
Wick is more of an unknown quantity. Again, the operator is the privately-owned Corallian Energy with the prospect adjacent to iGas’ Lybster operation in the far North East of Scotland.
Butler says it is very interesting structurally and up dip from the accumulation at Lybster, which 'de-risks it somewhat'.
How good are the reservoirs and seals remain to be seen, but it needs to be drilled, he adds.
Wick has a deeper prospect of about the same size but that is for another time says Butler.
Geared to success
If either Wick or Colter prove to be commercial, that would have a major impact on Baron.
The market value at the current share price of 0.42p is just under £6mln.
At Colter, Baron is paying of 10.67% of the £7.6mln well cost to an earn 8% interest, while at Wick it will earn 15% for 20% of the £5.7mln well cost.
If current estimates of either are confirmed by the drilling, the value would be many times higher than the current market cap.
Additional evaluation would be required and there would be infrastructure hook up costs, but routes to funding would be considerably easier and the market value a lot higher.
Longer term objectives
Baron still has an interest in an onshore gas prospect in Peru, but Butler says it needs a local partner to take this forward.
He has also applied for some licences on the North Sea 31st round with the objective of finding reserves that can be drilled quickly and developed rapidly.
Those are longer term opportunities. For now, Butler is focused on Wick and Colter.
“We will wait for these wells and then see where we are going.”