The board of Baron announces that as a result of a technical problem inside the wellbore at the Nancy #1 producing well at the NBM field, production has been shut in. As a result of this, there is a significant saving on operating costs at the NBM field.
The NBM licence expires on 16 October 2015 and the operating Company, Inversiones Petroleras de Colombia SA which is 50% owned by Baron, is under no obligation to carry out remedial work to resolve the technical problem, the cost of which is estimated to be $500,000, ahead of the licence expiry. However, Ecopetrol have asked for a proposal from Invepetrol on what its requirements would be as regards a licence extension in order that remedial works can be carried out.
Invepetrol are working on a proposal to extend the contract length and improve the terms of the NBM field in order that it becomes commercially viable for Invetrol to continue as operator. Once discussions have been concluded with Ecopetrol a further announcement will be made.