Cairn Energy has agreed a farm in deal with a subsidiary of Chariot Oil & Gas, giving it a 35% non-operated stake in an exploration block offshore Mauritania, West Africa.
The block (C19) is operated by Chariot Oil & Gas Investments (Mauritania), which holds 90% equity, with partner Mauritanian state company Société Mauritanienne des Hydrocarbures (SMH), which holds the remaining 10%.
C19 covers 12,175sq km, in 5-2000m water, north of existing discoveries in Mauritania. Two wells drilled in the shallow water areas of the block contained oil shows suggesting oil migration potential from the south, says Cairn.
New 3500sq km 3D seismic was recently acquired by Chariot and is being processed with an aim to identify a drillable prospect by the end of Q1 2014.
Under the terms of the agreement, Cairn will pay Chariot about US$26 million for seismic and other back costs. Cairn will then cover 38.89% of exploration costs, with Chariot covering 61.11%, with SMH's costs fully carried.
Equity holdings on completion of the agreement, subject to government approval, will be: Cairn, with 35%, Chariot, with 55%, and SMH, 10%.
The agreement with Chariot will see Cairn add to its portfolio on the Atlantic margin. Cairn has acreage offshore Morocco and this year agreed to farm in to blocks held by Far's offshore Senegal.
Image: Cairn Energy's CEO Simon Thompson.
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