Business
Termination of Farmin Agreement with UOGG
Termination of Farmin Agreement with UOGG.
About this update from Sunda Energy Plc
[{"type":"text","content":"\n \nRNS Number : 3596Q Baron Oil PLC 11 September 2017 \n\nTHE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY BARON OIL PLC TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (\"MAR\"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE (\"RIS\"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.\n \n \nBARON OIL PLC\n(\"Baron Oil\" or \"the Company\")\n \nTermination of Farmin Agreement with Union Oil & Gas Group\n \n \nBaron Oil PLC (AIM:\"BOIL\") (\"Baron\" or \"the Company\") announces that the Farmin Agreement (\"FIA\") with Union Oil & Gas Group (\"UOGG\") has been terminated and Baron has taken back its full 50% working interest share in Peru Block Z-34.\n \nAfter several months of discussion and negotiations, the board came to the decision that it would serve no useful purpose to pursue legal action to wind up UOGG in the British Virgin Islands, since the corporate structure is such that there are no financial assets held in the company. In addition, to enter into such action would severely prejudice ongoing farm-out discussions with third parties and also negatively impact the status of the Contract Licence for Block Z-34. In view of the short time frame remaining on the Contract, it was deemed essential that a new working relationship be established quickly with UOGG that would enable Baron to play a full part in both the ongoing operations and the farm-out discussions. The failure of UOGG to meet its financial obligations following the approval of the Public Deed in February 2017 meant that Completion did not take place under the terms of the FIA and a Termination Agreement to the FIA has now been negotiated and agreed between Baron and UOGG with effect from September 8th 2017.\n \nNo funds have been received from UOGG since the Contract Operating Agreement was terminated at the end of April 2017 and the effect of the Termination Agreement is that UOGG has no liability to pay the US$2 million that should have been paid on Completion. The net cash effect of this on Baron, taking into account local taxes and other costs that would have been payable but were conditional on the receipt of this US$2 million, is a US$1.16 million net loss to Baron' pro...