Cairn Energy announced it has entered into a farm in agreement with Chariot Oil & Gas Investments (Mauritania) Limited, a wholly owned subsidiary of Chariot Oil & Gas Limited (Chariot) for a 35% non-operated interest in an exploration block offshore Mauritania in West Africa.
The block (C19), which is currently held by Chariot (90% and Operator) and the Mauritanian state company “Société Mauritanienne des Hydrocarbures” (SMH) (10%), comprises 12,175 km2 in water depths ranging from shallow shelf to over 2000m. The block lies just to the north of existing discoveries in Mauritania and contains the Tertiary and Cretaceous deep water fan plays proven further south along the West African margin. The two wells previously drilled in the shallow water areas of the block, both contained reservoirs with oil shows and point to the oil migration potential from the south.
The most prospective part of the block is covered by a new 3,500km2 3D seismic survey recently acquired by Chariot and currently being processed. The seismic will be interpreted with the objective of identifying a high grade drillable prospect by the end of Q1 2014.
Under the terms of the farm in agreement, which is subject to Government approval, Cairn will pay Chariot approximately US$26 million for seismic and other back costs. Thereafter, exploration costs will be apportioned Cairn 38.89% (Working Interest (WI) 35%), Chariot 61.11% (WI 55%) and SMH 0% (WI 10%).
If, before the end of the first phase of the licence (15 June 2015), Cairn were to increase its interest to greater than 50% then Chariot will support Cairn’s application for operatorship of the block.
Cairn is one of Europe’s leading independent oil and gas exploration and development companies. Cairn has its headquarters in Edinburgh (Scotland) with assets in Greenland, Spain, Morocco, UK, Norway, Republic of Ireland, Senegal, Malta, Northern Ireland, France and Albania.
