San Leon Energy PLC Cairn Energy to farm-in to Foum Draa Block (7980K)
August 28 2012 - 2:00AM
UK Regulatory
TIDMSLE
RNS Number : 7980K
San Leon Energy PLC
28 August 2012
28 August 2012
San Leon Energy Plc
("San Leon" or the "Company")
Cairn Energy to farm-in to Foum Draa Block offshore Morocco on
attractive terms
Key Highlights
-- Successful farm-out to Cairn of our second Offshore Morocco block on attractive terms
-- Reduces financial exposure but keeps interest at a level
which still offers attractive upside
-- Targeting a first Foum Draa exploration well in 2013
-- Concludes the farm-out processes on our two Offshore Morocco blocks
San Leon is pleased to announce that it has signed a farm-in
agreement with Cairn Energy Plc ("Cairn") under which Cairn has
committed to pay a promoted share of the costs associated with
drilling an exploration well in the Foum Draa Block, offshore
Morocco ("Foum Draa" or "Block").
Under the agreement, Cairn will acquire a 50% operated equity
interest in Foum Draa, pro rata from each of San Leon, Serica
Energy plc ("Serica") and Longreach Oil and Gas Ventures Limited
("Longreach") (together the "Partners"). In return, Cairn will pay
its equity interest share of past costs, being US$1.5 million
(US$850,000 net to San Leon) and pay the first US$60 million
towards the drilling of the commitment exploration well. The
agreement is subject to necessary Moroccan Authorities
approvals.
Cairn has also committed to providing the bank guarantee
required by the Moroccan Authorities to enter the First Extension
Period.
Pre completion of the farm-in agreement, San Leon Energy held a
42.5% net operated interest in the block, Serica held 25% and
Longreach held 7.5%. ONYHM, the National Bureau of Petroleum and
Mines holds a 25% interest, carried through exploration.
Post farm-in, Cairn will hold a 50% net operated interest, San
Leon Energy will hold 14.17%, Serica will hold 8.33% and Longreach
will hold 2.5%. ONYHM, the National Bureau of Petroleum and Mines
will continue to hold 25%.
The Partners have already informed the Moroccan authorities of
their intention to proceed into the First Extension Period, which
contains a commitment to drill an exploration well.
Executive Chairman, Oisin Fanning commented:
"We are delighted to welcome Cairn Energy into this Block that
contains very large mapped prospects and we are now targeting our
first Foum Draa exploration well in 2013. This is deep water
exploration and this deal reduces our financial exposure but keeps
our interest at a level which still offers attractive upside for
our shareholders.
"San Leon committed itself to carrying out extensive work
offshore Morocco over the past two and a half years and this
farm-in agreement concludes the farm-out of our two offshore
blocks.
We also announced the successful farm-out of our offshore Sidi
Moussa block to Genel Energy last week. Attracting partners like
Cairn and Genel on the terms achieved is testament to the quality
of work we have undertaken."
For further information contact:
San Leon Energy Plc Tel: +353 1291 6292
Oisin Fanning, Executive Chairman
John Buggenhagen, Exploration
Director
Macquarie Capital (Europe) Limited Tel: +44 (0) 20 3037 2000
Paul Connolly
John Dwyer
Fox Davies Capital Tel: +44 (0) 20 3463 5000
Daniel Fox-Davies
Richard Hail
FirstEnergy Capital LLP Tel: +44 (0) 20 7448 0200
Hugh R. Sanderson
David Van Erp
Westhouse Securities (Nominated Tel: +44 (0) 20 7601 6100
Advisor)
Richard Johnson
Antonio Bossi
College Hill Associates Tel: +44 (0) 20 7457 2020
Nick Elwes
Alexandra Roper
www.sanleonenergy.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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