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Thursday, August 8, 2013
Chariot Oil & Gas Ltd. signed a farm-out agreement with Capricorn Mauritania Ltd., a wholly owned subsidiary of Cairn Energy PLC, for a stake in Chariot’s C19 License. Under the agreement Cairn gains a 35% equity interest in Chariot’s license in return for paying approximately $26 million for the costs of the 3D seismic data acquired by Chariot on the block, as well as other back costs.
Chariot will have a 55% stake and operatorship of the license, with Société Mauritanienne des Hydrocarbures (SMH) holding the remaining 10% as a carried interest. If, before the end of the first phase of the license (June 15, 2015), Cairn were to increase its interest to greater than 50%, Chariot would support its application for operatorship of the block.
This agreement remains subject to the approval of the Ministry of Hydrocarbons in Mauritania and includes standard representations and warranties given by both parties.
Block C19 covers an area of 12,175 sq km and is located 30km off the coast of Mauritania with water depths ranging from 5 meters-2,100 meters. To date, Chariot has exceeded its work commitments on the license with the acquisition of a 3,500 sq km 3D seismic program. Fast track data was received in mid-March and final Pre-Stack Depth Migration (PSDM) volumes are due to be received in November. This data will be fully interpreted and analyzed with the objective of identifying a drillable prospect in Q1 2014 and, subject to the results of this, drilling planning and the evaluation of partnering options will commence thereafter.
Larry Bottomley, CEO commented: “We are pleased to have agreed a partnership on C19 in Mauritania with Cairn, whose focus on exploration-led growth is aligned with Chariot’s objective of creating transformational value for stakeholders through the discovery of material accumulations of hydrocarbons.
“This agreement also demonstrates Chariot’s ability to implement our strategy of identifying and accessing large equity positions in underexplored hydrocarbon provinces, adding value in the early stages of exploration and securing farm-out partners to validate our assets, diversify risk and provide funding to further develop our portfolio. Furthermore, this partnership will enable us to continue to expedite our exploration efforts offshore Mauritania, where we see significant prospectivity and we look forward to maturing our prospect selection for drilling.”
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