Cairn Energy PLC announce it will farm-in as operator of three blocks offshore Senegal in West Africa. This transaction will add a number of drillable prospects to the frontier exploration inventory and drilling program in the next 18 months.
The three contiguous blocks – Rufisque, Sangomar and Sangomar Deep - are currently operated by FAR Limited (FAR) with Petrosen (the Senegal National Oil Company) as a Joint Venture (JV) partner. FAR is an independent Australian Securities Exchange listed oil and gas explorer with exploration interests which include West and East Africa.
Cairn is to acquire a 65% working interest (WI) and Operatorship by fully funding the 100% costs of one exploration well to an investment cap. Thereafter exploration costs will be apportioned Cairn 72.2% (WI 65%), FAR 27.8% (WI 25%) and Petrosen 0.0% (WI 10%). As part of the transaction Cairn will also pay 72.2% of costs incurred on the blocks by FAR to date, a total of ~$10m.
The working and paying interests for any development will be Cairn 59.2%, FAR 22.8% and Petrosen 18%. In the event that FAR wishes to subsequently farm-down additional equity, Cairn will retain certain preferential rights. The farm-in is subject to regulatory approval.
The three blocks cover an area of ~7,490km2 near shore to deep water exploration over the shelf, slope and basin floor of the Senegalese portion of the productive Mauritania-Senegal-Guinea-Bissau Basin. The acreage is covered by a 2,050km2 3D seismic survey and a number of play types, leads and prospects have been identified.
“The farm-in to acreage offshore Senegal is a further new country entry for Cairn and represents a highly attractive addition to our existing Atlantic Margin portfolio alongside our exploration interests in Morocco and Greenland," said Simon Thomson, Chief Executive of Cairn. "By developing an increased strategic presence in the under-explored but highly prospective region of North West Africa, we can generate both operational and geological synergies and fully apply our frontier exploration skills.
"The Senegalese acreage is an excellent strategic fit for Cairn and as an Operator gives us access to a gross prospective resource potential in excess of 1.5 billion barrels," he said.