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Baron Oil shares advance on Colombian farm-out deal

Published: 03:29 16 Jul 2013 EDT

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Shares in Baron Oil (LON:BOIL) advanced 15% in early deals after it struck a deal to sell a stake in the Nancy-Burdine-Maxime (NBM) field in Colombia.

The company, formerly Gold Oil, will sell 50% of its interest in NBM for US$2mln through a deal with a privately owned oil services group, S&J Full Services Ltd.

It will received the first US$1mln in cash upon closing the deal, while the other US$1mln will be paid in ten monthly payments of US$100,000 over ten months from August 30.

"This is an important step for our company in Colombia,” said chief executive Rudolph Berends.

“Having a local partner with the expertise and track record of S&J Full Services in the Putumayo Basin should add significant value through the optimizing of NBM operations.”

Baron Oil plans to spend the money on expanding and upgrading surface infrastructure at NBM.

This decision comes after a successful work over programme earlier this year.

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