EDINBURGH, UK – Cairn Energy has agreed to farm in as operator to two licenses in the Porcupine basin offshore western Ireland.
These contain the undevelopedSpanish Point gas condensate and Burren oil discoveries, along with six adjacent licensing option blocks. The acreage covers a total area of 2,753 sq km (1,063 sq mi) with more than 500 sq km (193 sq mi) of acquired 3D seismic.
Licenses FEL 2/04 (including Spanish Point and Burren) and FEL 4/08, together cover an area of 1,242 sq km (479 sq mi), and are currently operated by Chrysaor in partnership with Providence Resources and Sosina Exploration. The adjacent blocks, known as licensing option (LO) 11/2, can be converted to an FEL from October.
Pending regulatory and partner approval, Cairn will assume a 38% operating interest through paying a $4.1-million share of back costs and 63.33% of future exploration and appraisal costs for up to two wells, subject to a cap. The partners will share any costs above this level according to their equity interests.
Drilling of the first appraisal well on Spanish Point is expected to start next spring – this will be the first new drilling activity on the structure since the Phillips-operated discovery 35/80-2 well more than 30 years ago. The location is at the northern end of the Porcupine basin in around 400 m (1,312 ft) of water.
The partners could follow up with a further well on either FEL or on LO 11/2, and they are also considering a 3D seismic work program over the LO.