Monday 24 April 2017

Cairn Energy commits over €40m on Irish off-shore wells

Cairn subsidiary Capricorn Ireland has signed a
Cairn subsidiary Capricorn Ireland has signed a "farm out agreement" with Europa Oil and Gas for a fee of $6m that will see the company take a 70pc interest in the operation of a licence off the west coast of Ireland. Stock photo

Sean Duffy

Cairn subsidiary Capricorn Ireland has signed a "farm out agreement" with Europa Oil and Gas for a fee of $6m that will see the company take a 70pc interest in the operation of a licence off the west coast of Ireland.

The company has also made a commitment to invest as much as €39.8m towards drilling costs at projects being developed by Providence Resources off the Irish coast.

Oil and gas exploration company Cairn Energy is to ramp up its operations off the Irish coast, having invested in two separate drilling wells for a combined upfront cost of $8.2m(€7.7m).

Cairn subsidiary Capricorn Ireland has signed a "farm out agreement" with Europa Oil and Gas for a fee of $6m that will see the company take a 70pc interest in the operation of a licence off the west coast of Ireland.

Capricorn will use "3D seismic" technology to explore the viability of the well, with future exploration dependent on the test results.

Further farm-outs are being targeted of Europa's licence position off the Irish coast.

Meanwhile, Irish oil and gas exploration company Providence has also signed an agreement with Cairn that will see the company take a 30pc interest in Providence's frontier exploration licence.

As part of the deal, Capricorn Ireland will pay 45pc of drilling costs at Providence's 53/6-A exploration well, subject to a cap of $42m (€39.8m). Capricorn will pay $2.82m on a pro rata basis.

Providence will still be the operator of the well which is located around 220 miles off the south-west coast of Ireland.

As a result of the transaction, the resulting equity in the well will be Providence 56pc, Capricorn 30pc and Sosina 14pc.

Should the joint venture partners agree to a further appraisal of the drill in the future, Capricorn will pay 40pc of the costs.

Indo Business

Promoted articles

Also in Business