Cairn Energy takes stake in two Irish oil blocks
New Delhi: Edinburgh-based Cairn Energy plc Tuesday said it has bought stakes in two Irish oil and gas blocks in a cost-and-carry deal.
Cairn picked up 38 percent stakes in Porcupine Basin pair Frontier Exploration Licence (FEL) 2/04 and FEL 4/08 under the deal, as well as six adjacent licencing option blocks.
"The acreage covers an area of 2,753 square kilometers," the company said in a press statement.
The two licences - FEL 2/04 and FEL 4/08, together cover an area of 1,242 sq km - are currently operated by Chrysaor (60 percent) with Providence Resources (32 percent) and SOSINA Exploration Ltd (8 percent). The six adjacent licencing option blocks, known as Licencing Option (LO) 11/2, cover an area of 1,511 sq km and can be converted to a FEL from October 2013.
Post the deal, Providence Resources will hold 32 percent, Chrysaor 26 percent and Sosina 4 percent.
In return, Cairn Energy will pay USD 4.1 million in pro-rated back costs and carry 63.33 percent of future exploration and appraisal costs for up to two wells, subject to a cap.
Cairn Energy chief executive Simon Thomson said the deal boosted the explorer's frontier-basin oriented portfolio, which also includes assets in Morocco, Senegal, Greenland and the Mediterranean.
FEL 2/04 is home to the Spanish Point gas condensate discovery made by Phillips in 1981 and the Burren oil find.
Cairn said an appraisal well on Spanish Point was planned in the second quarter of next year and also launch a seismic programme at the six option blocks, known as LO 11/2.
Chrysaor is contributing 34 percent of its prior 60 percent stake in the Quad 35 area licences to the deal, while Sosina is selling half its 8 percent stake.
Providence Resources operated the licences until Chrysaor took up a farm-in option last July.
"The addition of this prospective acreage off the west coast of Ireland in the Porcupine Basin brings further exploration and appraisal potential to Cairn's frontier Atlantic Margin portfolio," Thomson said.
"Our operated, multi-well exploration programme, for which a rig has been secured, will start later this year in Morocco," he said.