Cairn Energy PLC’s Capricorn Ireland Ltd. unit has taken a farmout from Chrysaor Holdings Ltd. Irish subsidiary to earn an interest in two Porcupine basin licenses west of Ireland that contain the Spanish Point gas-condensate and Burren oil discoveries.
The farmout also includes six licensing option blocks adjacent to the discoveries. Cairn said the acreage covers 2,753 sq km with more than 500 sq km of 3D seismic and will provide locations for the company’s frontier drilling program.
Capricorn will acquire the rights to obtain an interest in Chrysaor’s 2/04 and 4/08 frontier exploration licenses and in the 11/2 licensing option, all in Quad 35 offshore west of Ireland. Capricorn will acquire a 38% interest in FEL 2/04, FEL 4/08, and LO 11/2 and, subject to government and partner approval, will become operator.
Capricorn will earn its stake through participating in and promoting the drilling of as many as two wells and a 3D seismic program at up to 63.33% cost. Capricorn’s promote will be capped and includes the recovery of prior expenditures.
Subject to normal governmental consents, the partners plan to drill an appraisal well at Spanish Point in FEL 2/04 in the second quarter of 2014 to confirm volumetrics and reservoir properties. The partners also expect to propose an extensive 3D seismic work program on LO 11/2 and that a second well, subject to government consent, may then be drilled either on FEL 2/04, FEL 4/08, or LO 11/2.
Quad 35 contains Spanish Point gas-condensate field and Burren oil field plus multiple prospects and leads in the Upper Jurassic and Lower Cretaceous intervals.
The former Phillips Petroleum Co. discovered Spanish Point in 1981 with the 35/8-2 exploratory well. Spanish Point is in 400 m of water at the northern end of the Porcupine basin. No well has been drilled on the Quad 35 acreage held by Chrysaor since Spanish Point.
Chrysaor farmed into the Quad 35 acreage in 2008 by acquiring 3D seismic over Spanish Point in 2009. Following interpretation of that data, further core analysis, and extensive static and dynamic fluid-reservoir modeling, the Spanish Point partners believe that Quad 35 has the potential to become a material hydrocarbon production center with a multiyear drilling program.
The above transaction is subject to consent from the Irish Minister of Communications, Energy and Natural Resources and partners.
License interests in FEL 2/04 and 4/08 under the farmout and assuming that Chrysaor exercises an option to acquire a further 10% stake will be Chrysaor 36%, Capricorn 38%, Providence 24%, and Sosina 2%, and in LO 11/2 will be Chrysaor 28%, Capricorn 38%, Providence 32%, and Sosina 2%.
Chrysaor noted that in 2014 it will not only drill in Ireland but start its first operated UK production from the Solan field West of Shetlands.