Cairn Strikes Spanish Point Farm-In Deal
UK independent Cairn Energy announced Tuesday that it is farming into the Spanish Point Area licenses offshore Ireland. The firm has struck a deal with Chrysaor and Sosina to farm into Frontier Exploration Licence 2/04, FEL 4/08 and Licensing Option 11/2, which are all located in Quad 35 in the Porcupine Basin off the west coast of Ireland.
Under the terms of the deal agreed, Cairn will earn a 38-percent stake in the licenses, and assume the operator role, by paying 63.33 percent of future exploration and appraisal costs for up to two wells.
Another partner in the licenses, Providence Resources, issued a statement of its own Tuesday stating that its stakes in the licenses would remain at 32 percent. Chrysaor and Sosina retain 26-percent and four-percent interests in Spanish Point.
Providence said that the latest rig scheduling information from Cairn and Chrysaor indicates that the partners now plan to drill the appraisal well at Spanish Point in the second quarter of 2014, with a follow-on well to be drilled at another target at a later date. The partners also expect to carry out extensive 3D seismic work on Licensing Option 11/2.
Commenting on the farm-in, Providence Chief Executive Tony O'Reilly said in a statement:
"We are delighted to welcome Cairn into our partnership in the Porcupine Basin. The arrival of a major independent operator like Cairn, with their deep water experience and their technical and financial strengths, provides further validation of the real potential of the Irish offshore and we look forward to working with them in the upcoming appraisal drilling at Spanish Point in 2014 and subsequent drilling and exploration activities within Quad 35."
Oil sector analysts at London-based Liberum Capital noted that the transaction adds Ireland to Cairn's existing Atlantic Margin interests offshore Greenland and Morocco.
"[Cairn's] deep water experience and technical and financial strengths provider further validation of the potential of Providence's acreage and the Irish offshore," a brief research note from Liberum stated.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 1 Offshore Rigs
- India Plans Larger Oil Auctions as Modi Pursues Import Cuts (Sep 14)
- Cairn Energy: SNE-5 Appraisal Well Hits Oil, Gas (Mar 07)
- AkerBP, Cairn Energy Make Jefferies Top Pick List (Jan 09)
Company: Providence Resources PLC more info
- Providence Expects to Drill Druid Prospect in Summer 2017 (Sep 15)
- Newgrange Prospect Could Hold 13.6 Tcf of Gas (Jul 12)
- Providence Offered LO 16/27 Offshore Ireland (Jun 23)
Company: Sosina more info
- Providence Starts Planning Seismic Survey over Drombeg (Jan 20)
- Cairn Strikes Spanish Point Farm-In Deal (May 07)
- Providence, Partners Agree Spanish Point Budget (Jul 20)