UK-based oil and gas explorer Cairn Energy has signed a farm-out agreement with US crude oil producer ConocoPhillips for the Rufisque, Sangomar and Sangomar Deep contiguous blocks located offshore Senegal, West Africa. A 2,050km² 3D seismic survey has been carried out to identify prospects.
Under the terms of the agreement, ConocoPhillips will acquire from Cairn a 25% working interest in the three blocks. As well as the operatorship, Cairn will hold a 40% interest in the blocks during the exploration phase, while the Senegalese national oil company, Petrosen, will retain a 10% interest.
Cairn is expected to begin drilling on the blocks in the first half of 2014, using the Cajun Express rig. ConocoPhillips would have the option to operate any future development of the resource.
The financial terms of the agreement were not disclosed; however, Cairn will receive a payment inclusive of a portion of back costs on the blocks, along with promoted terms of future exploration expenditure from ConocoPhillips.
Cairn Energy CEO Simon Thomson said: "The strategic farm-out means Cairn is able to intensify its plans to explore its acreage offshore Senegal, where the gross prospective block-wide resource potential is estimated to be in excess of 1.5 billion barrels."
In March 2013, Cairn signed a farmed-in agreement for three blocks that were earlier operated by FAR, with Petrosen as a joint venture partner.
The latest agreement is subject to the approval of the Government of Senegal.