Cairn Energy PLC reported entering into a farm out agreement for the sale of 10% interest in the Catcher development and adjacent acreage in the UK North Sea.
With effect as of Jan. 1 Dyas UK Ltd. will acquire 10% in each of the following UK Continental Shelf licenses: P1430, P2040, P2070, P2077, and P2086. In exchange, Dyas will fund Cairn’s exploration and development costs in respect of the licenses up to a cap of $182 million.
Following this transaction, Cairn will retain a 20% interest in the Catcher license and a reduced interest in each of the remaining licenses as follows:
• License P1430 (Blocks 28/9a and 28/10c): Premier 50% (operator), Cairn 20%, MOL Group 20%, Dyas 10%.
• License P2070 (Block 28/4a): Premier 54% (operator), Cairn 36%, Dyas 10%.
• License P2077 (Block 28/8): Premier 54% (operator), Cairn 36%, Dyas 10%.
• License P2040 (Block 29/11): Premier 35% (operator), Statoil 25%, Cairn 10%, MOL Group 20%, Dyas 10%.
• License P2086 (Blocks 28/9b and 28/14): Premier 35% (operator), Cairn 10%, Statoil 25%, MOL Group 20%, Dyas 10%.
As a result of this transaction Cairn will reduce its capital expenditure to yearend 2017 in the Catcher area by $380 million to $200 million.
License P1430 (Catcher) received UK Department of Energy and Climate Change (DECC) approval of its field development plan (FDP) in June. Licenses P2040, P2070, P2077, and P2086 are adjacent licenses in the Greater Catcher area.
The transaction remains subject to DECC, partner, and third party approvals.