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LONDON (Alliance News) – Cairn Energy PLC Monday said it has signed a further exploration deal in Morocco and has started drilling operations on an exploration well off the Moroccan coast.
The oil and gas exploration company said it has entered into a farm-in agreement with Kosmos Energy and the Moroccan National Oil Company for a 20% non-operated interest in an exploration block offshore North West Africa.
The Cap Boujdour exploration permit is 50 kilometres offshore Morocco, covering an area of 27,700 kilometres squared in the Aaiun Basin and is scheduled for drilling in the second half 2014.
The company said that under the terms of the agreement, Cairn will pay a promoted share of future exploration costs towards a 3D seismic survey, an exploration well planned for 2014 and, if successful, two appraisal wells, all subject to a maximum expenditure cap and Morocco government approval.
Cairn said the permit is covered by a regional 2D and larger 3D seismic surveys while Kosmos has identified three prospects within the 3D area, including the largest site Gargaa which is located at 2,135 metres water depth.
The company also said that it has began drilling its 50% controlled FD-1 exploration well, roughly 120 kilometres offshore Morocco, using a fifth generation semi-submersible drilling unit.
The well has a planned total depth of 5,500 metres and is expected to take around 60 days to drill.
The project is in partnership with AIM-listed oil and gas exploration firms San Leon PLC and Serica Energy PLC, which hold a 14.2% and 8.3% interest respectively in the Foum Draa block.
The other partners in the site are Longreach, which will hold 2.5%, and the Moroccan National Bureau of Petroleum and Mines which will continue to hold a 25% interest.
Cairn Energy said on October 17 that the multi-year, multi-well exploration campaign is targeting a total 4.0 billion barrels of oil equivalent resource.
Cairn energy shares were trading down 0.4% at 279.90, San Leon were down 0.6% to 4.07 pence and Serica were up 0.7% to 18.00 pence Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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