Cairn has entered into binding Head of Terms with Dyas BV to acquire the 9.99% interest Dyas owns in Cairn's exploration focused subsidiary, Capricorn. The acquisition comprises Dyas' entire holding in the Capricorn Group, including all assets and cash balances. On completion of the transaction, Capricorn will be a wholly owned subsidiary of Cairn.
The consideration for this acquisition is US $95 million to be satisfied by an issue of 1,800,000 shares in Cairn with the balance payable in cash. Cairn will also assign 15% of its interests in Tunisia and Albania held by Capricorn to Dyas, subject to relevant Government approvals.
On completion of this transaction, Dyas will hold a 15% interest in the Louza Permit and a 7.5% interest in the Nabeul Permit (both in Tunisia) and a 15% interest in Block Joni-5 in Albania.
Dyas acquired its interest in Capricorn in September 2007 on the same day as Capricorn acquired the rights to the blocks in Tunisia and Albania. At that time, Capricorn also had assets in Bangladesh and Papua New Guinea, together with the cash to exploit these. Since then, Capricorn has also acquired license interests in Greenland and conducted a pre-exploration program of seismic and lead development. In October 2009, Cairn farmed down a minority interest in its Greenland acreage to Petronas.
The Company has applied for admission of the shares to be issued to Dyas to the Official List of the UK Listing Authority (the "Official List") and to trading on the London Stock Exchange's main market for listed securities ("Main Market"), together (the "Admission"). It is expected that Admission will take place and that trading will commence today.
Sir Bill Gammell, Chief Executive said, "Dyas were early strategic investors in Capricorn at a time when it was envisaged that Capricorn would potentially demerge from the Cairn Group. Given the materiality of our exploration position in Greenland to the Group as a whole, there is no longer an intention to demerge Capricorn. Dyas have therefore agreed to exchange their holding in Capricorn for a holding in Cairn. We are delighted to continue our relationship with Dyas and they will be a key partner in our Mediterranean exploration program."
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