Further opportunities added to Cairn's frontier drilling programme

7th May 2013 08:51

FTSE 250-listed Cairn Energy has reported a farm-in as operator to two licences offshore West of Ireland in the Porcupine Basin and six adjacent licensing option blocks. The acreage covers an area of 2,753 square km with more than 500 square kilometres of 3D seismic and is expected to provide locations for Cairn's frontier drilling programme, the group said.The two licences, FEL 2/04 - which includes the Spanish Point and Burren discoveries - and FEL 4/08, together cover an area of 1,242 square kilometres. They are currently operated by Chrysalor with a 60% working interest, Providence Resources with a 32% working interest and SOSINA Exploration, with an 8.0% working interest. The six adjacent licensing option blocks, which are known as licensing option (LO) 11/2, cover an area of 1,511 square kilometres.Subject to regulatory and partner approval, Cairn reported that it would acquire a 38% working interest and operatorship by paying a pro-rated share of back costs amounting to $4.1m as at December 31st, and 63.33% of future exploration and appraisal costs for up to two wells, subject to a cap. The group said that costs in excess of the cap would be shared by the parties according to their equity interests. Based on Cairn's estimate of the expected well cost, it said that it anticipated that it would be contributing 55% of the cost of each well. Simon Thomson, Chief Executive Officer of Cairn Energy, said: "The addition of this prospective acreage off the west coast of Ireland in the Porcupine Basin brings further exploration and appraisal potential to Cairn's frontier Atlantic Margin portfolio. Our operated, multi-well exploration programme, for which a rig has been secured, will start later this year in Morocco."Cairn Energy's share price was down 1.25% to 285.50p at 09:01 on Tuesday.MF