Morocco Interest Mounts after Cairn Acquisition
Offshore Morocco is seeing increased interest as an exploration region as Cairn Energy becomes the latest company to expand its acreage there.
Cairn announced Tuesday that it would farm into the Foum Draa Block, in which fellow oil firms Serica Energy, San Leon Energy and Longreach Oil and Gas all hold interests. Cairn already holds a 37.5-percent interest and the operatorship of the Cap Juby license, which is also offshore Morocco and adjacent to Foum Draa.
The news comes less than a week after Genel Energy, which is led by former BP CEO Tony Hayward, announced that it had agreed to farm into Morocco's Sidi Moussa offshore block. On August 23, Genel said it would acquire a 60-percent interest in Sidi Moussa from the same companies – Serica, San Leon and Longreach – in return for which it would fund the drilling of a well.
The deal announced Tuesday will see Cairn acquire an aggregate 50-percent interest from the current Foum Draa license holders in return for a payment of a share of past costs (approximately $1.5 million) as well as a promise to pay up to $60 million towards the costs of an exploration well on the license area. Following completion of the farm-in, San Leon, Serica and Longreach will hold interests of 14.2 percent, 8.3 percent and 2.5 percent respectively, while the Office National des Hydrocabures et des Mines (ONHYM) will hold the remaining 25 percent.
The Foum Draa Block is located offshore southern Morocco in water depths of up to 6,560 feet and covers an area of approximately 1,950 square miles.
Two key prospects on the block have been identified and the first exploration well is expected to be drilled in the fourth quarter of 2013 at the earliest.
Oil analysts at London-based FoxDavies Capital commented that Tuesday's deal reconfirms the high prospectivity of San Leon's Moroccan portfolio.
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