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Baraka Energy & Resources: Statoil's Bigger Role Could Result In More Wells In Georgina Basin

Baraka Energy & Resources (ASX: BKP) believes that Statoil's (OSE:STL, NYSE:STO) greater commitment to the Georgina Basin could result in up to three wells drilled on its permits in 2014.

This is subject to new seismic data and other data evaluated by the Norwegian state oil company.

As previously noted, Statoil is planning to drill between four and six wells in its joint venture permits with PetroFrontier (CVE: PFC).

Statoil had last month moved to take up operatorship of the Georgina Basin permits from September 2013 and has substantially increased its work commitments.

This involves increased seismic work being carried out in the south east area of EP127 that is south of the Owen-3 well on EP104 which produced a 32 metre core seeping oil.

Increased seismic is also planned in the north east boundary of EP128, which adjoins the permit owned by Central Petroleum Ltd (ASX CTP) and is subject to a farmin agreement with French supermajor Total SA (Paris:FP, NYSE:TOT), who have extensive work planned over this permit and three others to the south east of Baraka's EP127.

This program will define potential well sites for 2014, provide valuable data to Statoil in the overall assessment of the basin for the longer term, as well as meeting the NT Governments work commitments for the permits.

Baraka also noted that while Statoil's major objective is liquid oil from the shale, it is also assessing all potential conventional liquid targets within the basin, including the Hagen Member on Baraka's EP127, which Baraka have been pressing for, for some time, because of Ryder Scott's positive report on the area.

All and any gas discoveries will be assessed in regards to the volumes, and Baraka have passed onto Statoil, enquiries from a group prepared to fund a small LNG plant for early cash flow subject to providing proof of sufficient reserves to justify the capital expenditure.

MacIntyre 2H results will be assessed by Statoil technical team in Norway during the current work programs and will be revisited at the appropriate time based on the priorities that have to be met by seismic and new wells on the permits according to NT Government required commitments.

As a result of its belief that Statoil's greater role is positive, Baraka has signed off on all relevant documentation for Statoil to become the Operator from the 1st September 2013 and for them to acquire a greater equity percentage in PetroFrontier's holdings in EP103, EP104, EP127 and EP128.

This includes a waiver for Baraka not exercising its rights under the pre-emptive clauses of the joint venture agreement.

Baraka said it believes that it will benefit greatly by Statoil's professional approach to exploration and the huge technical resources available from their teams globally, involved in very large conventional and especially unconventional projects worldwide.

Baraka will remain responsible for funding its share of costs in EP 127 and EP 128.

Iron Sands

Baraka has also flagged its interest in an Iron Sands Investment (Titaniferous Magnetite) venture in the the Philippines, entering into a Commercial Secured Loan Agreement including interest payments and a profit sharing arrangement with an unlisted public company.

With Baraka's assistance, the permits controlled by the unlisted public company have now been renewed for a further two years to allow further exploration of the highly potential areas to be pursued.

Baraka has recently funded the acquisition of unique equipment to carry out very economical assessment of the permits under an exploration program currently underway.

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