Byron Energy has executed an agreement to acquire a 100% working interest in the SM58 Lease Block to a depth of 13,639’ TVD and 50% WI below 13,639’TVD, as well as a non-operated 53% WI in the SM58-E1 producing wellbore and the SM69 E Platform.

The strategic SM58 acquisition provides Byron with contiguous acreage on the north flank of the SM73 field, access to production infrastructure, a small amount of existing production and additional exploration upside.

Byron’s internally mapped reserves include 215 Mbo + 0.1 Bcfg split between Proved Producing & Proved Developed Behind Pipe (net to Byron).

As of January 1, 2019, the SM58 E1 wellbore was producing approx. 120 bopd + 150mcfgpd from the K4 Sand and is set up for a future up-hole selective completion.

Byron Energy has executed a Purchase and Sale Agreement ('PSA') with a private USA company, for the acquisition of all of their rights, title, and interest in and to South Marsh Island Block 58 ('SM58') Lease (being 100% WI and 83.33% net revenue interest ('NRI') above 13,639’ True Vertical Depth ('TVD'), 50% WI and 41.67% NRI below 13,639’TVD, and a 53% WI (44.165% NRI) in the associated non-operated producing assets, the E1 wellbore and the SM69 E Platform located on adjacent block SM69 (see Attachment1) for US$4.25 million. SM58 is within Byron’s recently announced 2018 Reverse Time Migration ('RTM') and Vector Imaging Partition ('VIP') seismic reprocessing project and is located immediately between Byron’s South Marsh Island Block 57 and 59 leases which when combined provide Byron with contiguous exploration acreage across the northern half of the SM71 Area Salt Dome and SM73 Field.

The prolific SM58 lease has produced 36 MMBO and 265 BCFG to date from 65 producers of 120 wells drilled with all pre-existing wells (excluding the E1 wellbore) and platforms fully decommissioned by the previous operators. The SM58 block has been the most productive block in the SM73 Field to date, yet the drilling results have suggested a complex structural-stratigraphic setting, one which is well suited for further evaluation with Byron’s 2018 RTM/VIP data set. Acquisition of the lease includes access to existing production reserves and infrastructure as well as additional exploration and development acreage within the newly reprocessed RTM/VIP seismic data set used to identify the Company’s nearby SM71 oil discovery in 2016.

Production from the SM58 E1 wellbore flows from the SM69 E Platform to the ANKOR Energy operated SM69 B Platform where separation and processing occurs. The SM69E Platform is a recently constructed (2013) two slot structure with one well slot utilized and offers expansion potential of an additional slot.

Maynard Smith, Byron’s CEO had this to say regarding SM58:
"The pursuit and fruition of this deal is a further testament to the strategic thinking of the Byron team in their effort to grow the company. This transaction is mutually beneficial to all companies involved and demonstrates Byron’s commitment to work with other operators similarly looking to focus their resources on their own core areas of interest. We see additional opportunity in the now contiguous SM57, 58 and 59 area and look forward to formulating a future drilling program on that part of the dome.

'Theconsistent production from ournearby SM71 Field has provided the cash flow and financial resources to access this growth opportunity for our company. This is a significant step in expanding our position in the Gulf of Mexico and we plan to leverage this acreage into additional drilling locations and revenue streams in the near future."

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