Kosmos Energy announced today that it has entered into two farm-in agreements, whereby Kosmos is acquiring an interest in multiple blocks in the prospective Porcupine Basin, offshore the west coast of Ireland.
Porcupine Map (Image: Europa)
The farm-in agreements were executed with Antrim Energy Inc. covering Licensing Option 11/5 and with Europa Oil & Gas plc covering Licensing Options 11/7 and 11/8.
Per the agreement with Antrim, Kosmos is acquiring a 75% participating interest and operatorship in the approximately 1,410 sq km Licensing Option 11/5 in exchange for carrying the full costs of a planned 3D seismic program on the block. In addition, the Company will reimburse Antrim for a portion of previously-incurred exploration costs.
Kosmos is also acquiring an 85% participating interest and operatorship in Licensing Options 11/7 and 11/8, an area totaling 2,000 sq km, in a separate agreement with Europa. According to terms of the agreement, Kosmos will fully fund a planned 3D seismic program on each block and will reimburse Europa for a portion of its previously-incurred exploration costs.
Contingent upon an election by Kosmos and Europa to enter into a subsequent exploration drilling phase on one or both of the blocks, Kosmos will also fund 100% of the costs of the first exploration well on each block, subject to an investment cap. The per-well investment cap for the first well is $90 million on Licensing Option 11/7 and $110 million on Licensing Option 11/8.
Paul Dailly, Senior Vice President and Chief Geoscientist, commented, “The addition of these highly-prospective blocks offshore Ireland represents further opportunity to leverage our understanding of Cretaceous-age combination structural-stratigraphic plays in overlooked and underexplored basins.
With a number of significant leads already identified on 2D, our plans are to commence 3D seismic acquisition over portions of these deepwater acreage positions later in 2013, subject to finalizing the areas as Frontier Exploration Licenses. Combined with our positions offshore Morocco, Mauritania, and Suriname and onshore Cameroon, we are building out a premier exploration portfolio and exposing Kosmos to substantial upside exploration value.”
The completion of the farm-in agreements remains subject to Irish government approval and other customary closing conditions. Following approval, Kosmos and co-venturers will pursue converting the Licensing Options to Frontier Exploration Licenses and seek approval of a work program.
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