Kosmos Energy today announced that it has entered into a farm-out agreement with Capricorn Exploration & Development Company Limited, a wholly-owned subsidiary of Cairn Energy PLC (LSE:CNE), covering the Cap Boujdour Contract Area, offshore Morocco.
Under the terms of the agreement, Cairn will acquire a 20% non-operated interest in the exploration permits comprising the Contract Area. Cairn will pay a disproportionate share of future exploration costs including a 3D seismic survey, an initial exploration well in 2014 and, if successful, two appraisal wells, all subject to maximum expenditure caps. Completion of the transaction is subject to customary closing conditions, including Moroccan Government approvals.
Brian F. Maxted, Chief Executive Officer of Kosmos Energy, commented, “Our farm-out with Cairn marks a significant step forward for Kosmos as we continue to advance our exploration plans while retaining a strategic position in the block and operatorship in one of the last undrilled petroleum systems along the Atlantic Margin. This agreement is consistent with our strategy of bringing industry leading partners such as Cairn who have significant technical expertise, strong financial capabilities and a proven management team to the Cap Boujdour project. This concludes the pre-drill farm out of our Moroccan assets.”
Simon Thomson, Chief Executive of Cairn Energy commented, “This new acreage offers significant potential in a region where Cairn is already well established. We are delighted to be working with Kosmos who are a proven and valuable operating partner with a track record of exploration success in this play type along the West African margin. The farm-in builds on our existing Atlantic Margin portfolio where we have a strategic presence across three countries in Morocco, Senegal and Mauritania and has commenced a twelve month multi-well high impact frontier exploration program that will potentially offer shareholders material growth.”
On closing of the transaction, the interests in the block will be as follows with the Office National des Hydrocarbures et des Mines (ONHYM), having a carried interest through the exploration period:
Kosmos 55.0% (Operator)
Cairn (Capricorn) 20.0%
Press Release, October 28, 2013