The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

23 August 2022

Baron Oil Plc

("Baron", or the "Company")

Interim Results for the six months ended 30 June 2022

Baron Oil Plc (AIM: BOIL), the AIM-quoted oil and gas exploration company focused on assets in SE Asia and the UK, is pleased to announce its unaudited interim results for the six months ended 30 June 2022.

Key Points

Commenting on the results, John Wakefield, Non-executive Chairman, said:

"We believe that Baron is in a strong position to deliver value to shareholders as our two major projects move through key evaluation points at the same time as the oil & gas sector tailwinds of energy security, structural imbalances in LNG, and historically high gas prices are firmly with us. Our strategy remains that of seeking and working up high potential impact exploration and appraisal opportunities at significant equity in proven hydrocarbon basins."

Qualified Person's Statement

Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and Gas Companies, the technical information and resource reporting contained in this announcement has been reviewed by Jon Ford BSc, Fellow of the Geological Society, Technical Director of the Company. Mr Ford has more than 40 years' experience as a petroleum geoscientist. He has compiled, read, and approved the technical disclosure in this regulatory announcement.

For further information, please contact:

FINANCIALS

The net result for the period was a loss before taxation of £419,000 (30 June 2021: net loss of £117,000; year ended 31 December 2021: net loss of £1,127,000), representing a loss of 0.003p per share (30 June 2021: 0.002p; year to 31 December 2021: 0.012p). It should be noted that the interim and year end results for 2021 included a one-off non-cash gain on the deemed disposal of an associated undertaking amounting to £302,000.

Exploration and evaluation expenditure written off and included in the Income Statement amounts to £120,000, consisting of Peru-related costs up to the date of the relinquishment of the Block XXI licence, surface rental in Timor-Leste, and technical consultancy. An impairment provision in respect of a Peru tax receivable was reduced by £44,000, this being attributable to adjustments arising from the relinquishment of the licence.

Administration expenses for the period amounted to £497,000, compared to £424,000 in the same period in 2021, and £1,321,000 for the whole of 2021 The increase over the previous six month period is entirely due to the full inclusion of expenses arising in Timor-Leste (first consolidated in April 2021), and the relative reduction on the 2021 full year figures is attributable to lower director and staff salary costs, and the inclusion of share-based payments of £286,000 in 2021, not repeated in 2022.

During the six months to 30 June 2022, the US Dollar strengthened against the Pound Sterling considerably, with an opening rate of $1.35 and a closing rate of $1.21. This has given rise to a substantial gain on holdings of US Dollar assets of £161,000 (30 June 2021: loss of £36,000; 31 December 2021: gain of £22,000).

At the end of the period, free cash reserves of the Group had increased to £2,365,000 from a level at the preceding year end of £1,650,000. The proceeds of a Placing and Subscription of new ordinary shares in the year amounting to £1,508,000 net of costs bolstered the Company's cash reserves. The Group's investment in intangible assets in the UK and Timor-Leste amounted to £383,000 in the period, together with £410,000 of operating cash outflow.

PROJECTS

SE Asia: Timor-Leste, offshore TL-SO-19-16 PSC ("Chuditch") - Baron 75%; Timor Gap 25%

Significant technical progress has been made since the beginning of the year on the evaluation of the Chuditch-1 discovery and offset analogous prospectivity. Our geoscience team is fully engaged in the interpretation of the significantly improved subsurface image resulting from the TGS 3D reprocessing project and its integration with petroleum systems, reservoir and other technical studies. Once the geoscience evaluation is completed we will be updating our development and gas export option studies, including the layout and costs of infield facilities, pipeline and standalone options for gas export, and the treatment and storage of carbon dioxide.

We are engaging with multiple potential farm-in partners by hosting a continuously updated dataroom. Farm-in candidates include not only 'traditional' exploration and production industry players, but also companies seeking security of gas supply as well as infrastructure providers.

In June, as part of our ongoing showcasing of Chuditch, Baron's wholly owned subsidiary SundaGas Banda Unipessoal Lda. ("SundaGas"), the operator of the Chuditch PSC, presented at the 4^th Timor-Leste Energy & Mining Summit in Dili and the South-East Asia Petroleum Exploration Society (SEAPEX) Asia-Pacific conference in London. This will be followed in September with further presentations at the Business and Exploration Opportunities Show (BEOS) in London, and at the RIU Good Oil & Gas Energy Conference in Perth, Western Australia, which is Australia's pre-eminent oil and gas investment forum for junior and emerging oil and gas explorers and producers.

Our office in Dili, the capital of Timor-Leste, became fully staffed and operational during the first half of 2022, thereby reinforcing our already strong and constructive relationships with in-country authorities, partners and industry peers.

United Kingdom Offshore Licence P2478 - Corallian 36%; Upland Resources 32%; Baron 32%

The 3D seismic reprocessing and geochemical studies covering the Dunrobin and other prospects within Licence P2478 in the Inner Moray Firth have been delivered with a significant uplift in data quality believed to have been achieved. The interpretation of the revised data began on schedule in July 2022. An updated prospectivity evaluation is anticipated to be available during Q4 2022, which will provide sufficient time for the Joint Venture partners to consider options, potentially including engaging with prospective drilling and funding partners, ahead of the July 2023 'drill or drop' licence decision.

We have been encouraged by the UK Government's stance on energy security which has the potential to revive the business and regulatory hydrocarbon exploration environment in the UK North Sea. In addition, the proposed "windfall" tax (the Energy Profits Levy) may lead to producing oil and gas companies re-engaging in exploration drilling. Both aspects may have a positive impact on the chances of the potentially large Dunrobin prospect with its shallow target depths being tested.

Peru

Baron announced in April 2022 the relinquishment of its legacy Peru Licence Block XXI, and in June 2022 the release and successful return of its US$160,000 Bank Guarantee. Through its fully owned subsidiary Peru, Gold Oil Peru SAC, the Company continues to work with Perupetro SA (the Peruvian national oil & gas agency and licensing authority) to establish and file an Abandonment Plan. Ongoing cash expenditure is minimal, and we do not anticipate any material write-offs or impairment as we complete our exit from Peru.

Shareholder Webinar

Based on the success of our first live investor presentation in late January 2022, we anticipate holding a second similar Chuditch focused event during the early part of Q4 2022.

January's Chuditch presentation, which is available on the Baron website, included an updated technical overview; description of the overall commercial context; options for potential future gas export strategies via pipeline to LNG facilities, or standalone solutions such as a Floating Liquefied Natural Gas (FLNG) facility; preliminary concepts for the handling of carbon dioxide and CCS (carbon capture and storage); and a preliminary design for a Chuditch appraisal well.

Glossary

Consolidated Income Statement

for the six months ended 30 June 2022

Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2022

Consolidated Statement of Financial Position

at 30 June 2022

Consolidated Statement of Cash Flows

for the six months ended 30 June 2022

As at 30 June 2022, bank deposits include amounts totalling US$1,000,000 (30 June and 31 December 2021: US$1,160,000) that are being held in respect of guarantees and are not available for use until the Group fulfils certain licence commitment in Timor-Leste and, previously, Peru. This is not considered to be liquid cash and has therefore been excluded from the cash flow statement.

See also note 10 to the Financial Statements.

Consolidated Statement of Changes in Equity

for the six months ended 30 June 2022

Notes to the Interim Financial Information

1.             General Information

Baron Oil Plc is a company incorporated in England and Wales and quoted on the AIM Market of the London Stock Exchange. The registered office address is Finsgate, 5-7 Cranwood Street, London EC1V 9EE.

The principal activity of the Group is that of oil and gas exploration and production.

This financial information is a condensed set of financial statements and are prepared in accordance with the requirements of IAS 34 and do not include all the information and disclosures required in annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2021. The financial information for the six months to 30 June 2022 is unaudited and do not comprise statutory financial statements within the meaning of Section 435 of the Companies Act 2006.

Statutory financial statements for the year ended 31 December 2021, prepared under IFRS, were approved by the Board of Directors on 30 May 2022 and delivered to the Registrar of Companies.

2.             Basis of Preparation

This consolidated interim financial information has been prepared in accordance with UK adopted International Financial Reporting Standards ("IFRS") and IFRIC interpretations issued by the International Accounting Standards Board (IASB), and on the historical cost basis, using the accounting policies which are consistent with those set out in the Company's Annual Report and Financial Statements for the year ended 31 December 2021. This interim financial information for the six months to 30 June 2022, which complies with IAS 34 'Interim Financial Reporting', was approved by the Board on 22 August 2022.

3.             Accounting Policies

The accounting policies applied are consistent with those of the annual financial statements for the period ended 31 December 2021, as described in those annual financial statements.

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the period. The nature of estimation means that actual outcomes could differ from those estimates. Estimates and assumptions used in the preparation of the financial statements are continually reviewed and revised as necessary. Whilst every effort is made to ensure that such estimates and assumptions are reasonable, by their nature they are uncertain, and as such, changes in estimates and assumptions may have a material impact in the financial information.

4.             Segmental information

5.             Administration expenses

6.             Operating loss

7.             Gain on disposal of associated undertaking and acquisition of subsidiary undertaking

During the year ended 31 December 2021, the Company increased its stake in SundaGas (Timor-Leste Sahul) Limited ("TLS") from 33.33% to 100%. In accordance with IFRS3, this was treated as an effective disposal of the interest in the associated undertaking requiring a remeasurement of its cost to fair value. This results in a gain on disposal of £302,000.

As a consequence of the increased holding in TLS in 2021, the company was consolidated for the first time in that year into the Group Income Statement and Statement of Financial Position. As TLS is a single asset company in pre- production phase, it is included as an oil & gas asset purchase rather than as a business combination, and its carrying value is included in intangible assets.

8.             Income tax expense

There was no tax expense during the period (30 June and 31 December 2021: nil).

9.             Earnings/(loss) per share

The earnings/(loss) per ordinary share is based on the Group's loss for the period of £419,000 (30 June 2021: £117,000; 31 December 2021: £1,127,000) and a weighted average number of shares in issue of 12,373,667,710 (30 June 2021: 7,302,657,312; 31 December 2021: 9,460,727,853.

10.          Cash and cash equivalents

As at 30 June 2022, bank deposits include amounts totalling US$1,000,000 (30 June and 31 December 2021: US$1,160,000) that are being held in respect of guarantees and are not available for use until the Group fulfils certain licence commitment in Timor-Leste and, previously, Peru. This is not considered to be liquid cash and has therefore been excluded from the cash flow statement.

Should any of the Timor-Leste US $1,000,000 Bank Guarantee be released, the net proceeds received shall be divided between SundaGas Pte. Ltd ("SGPL") and Baron in the proportions of their Initial Interests (66.67% and 33.33%). The amount due to SGPL in this event is included in payables as the Bank Loan Guarantee Account ("BGLA"). The receipt of any such funds shall satisfy the BGLA which shall be considered to be repaid in full. In the event that the Bank Guarantee is exercised or the Bank Guarantee deposit is otherwise forfeited, SGPL and Baron have agreed that the BGLA shall be written off and that SGPL shall not have any claim against the Group in this respect.

11.          Called up Share Capital

On 9 May 2022, the Company issued 2,750,000,000 Ordinary Shares of 0.025p each at 0.06p per share, yielding net proceeds after costs of £1,508,000.

12.          Reconciliation of operating loss to net cash outflow from operating activities

13.          Related party transactions

During the period, a director, Andrew Yeo, subscribed for 16,150,000 new ordinary shares in the Company at a price of 0.06p per new ordinary share as part of a Placing and Subscription of new ordinary shares that was announced by the Company on 29 April 2022.

The directors' aggregate remuneration associated benefits and share-based payments in respect of qualifying services during the period amounted to £161,000 (30 June 2021: £155,000 31 December 2021: £658,000).

14.          Financial information

The unaudited interim financial information for period ended 30 June 2022 does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 December 2021 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain statements under Section 498 to 502 of the Companies Act 2006.

Copies of this interim financial information document are available from the Company at its registered office at Finsgate, 5-7 Cranwood Street, London EC1V 9EE. The interim financial information document will also be available on the Company's website www.baronoilplc.com.