Cairn is farming into a deepwater exploration block offshore West Africa’s Mauritania, after agreeing a deal with Chariot Oil & Gas.
The move will see the UK independent acquire a 35% non- operated interest in Block C19 from Chariot’s subsidiary Chariot Oil & Gas Investments (Mauritania) Ltd. The block is currently operated by Chariot with a 90% interest, with the Mauritanian state company Société Mauritanienne des Hydrocarbures (SMH) holding the remaining 10%.
The block covers 12,175 sq km in water depths ranging from the shallows out to more than 2,000 m (6,562 ft). It lies just to the north of existing discoveries in Mauritania, and contains the Tertiary and Cretaceous deepwater fan plays proven further south along the West African margin.
Two wells previously drilled in the shallow water areas of the block both contained reservoirs with oil shows, and point to the oil migration potential from the south.
The most prospective part of C19 is covered by a new 3,500 sq km 3D seismic survey recently acquired by Chariot and currently being processed. The seismic will be interpreted with the objective of identifying a high grade drillable prospect by the end of Q1 2014.
Under the terms of the farm in agreement, which is subject to Government approval, Cairn will pay Chariot approximately US $26 million for seismic and other back costs. Thereafter, exploration costs will be apportioned Cairn 38.89% (working interest 35%), Chariot 61.11% (WI 55%) and SMH 0% (WI 10%).
If, before the end of the first phase of the licence (15 June 2015), Cairn were to increase its interest to greater than 50%, then Chariot would support Cairn’s application for operator-ship of the block.
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