LONDON -(Dow Jones)- Cairn Energy PLC (CNE.LN) said Thursday it has agreed to sell to Petronas International Corporation Ltd a 10% interest in its existing six operated blocks offshore Greenland, subject to the required government and partner approvals
MAIN FACTS:
-Petronas has option to increase its interest to 20% in any development in these blocks, in return for payment of further consideration to reflect market valuation at that time
-Cairn and Petronas have also agreed to co-operate on an 80/20 basis on any other Open Door or Bid Round initiatives in Greenland
-In addition, Petronas has acquired from Cairn 43.6 million illion shares in Cairn India Limited (CIL) representing a 2.30% stake in CIL, taking the total holding of Petronas in CIL to 14.94%
-Total consideration payable by Petronas in respect of the above transactions is $310 million*.
-These funds will be targeted for additional investment in Greenland exploration
-India: First oil production commenced from the Mangala field, Rajasthan on Aug. 29
-36 Mangala development wells drilled, of which 26 completed to support ramp up production profile; successfully drilled and completed first horizontal well which tested at a production rate of more than 11,500 barrels of oil per day (bopd)
-Mangala production continues to build according to plan with average gross production of 5,991 bopd to end of Sep.; currently producing 10,000 bopd
-Government of India has now agreed for private refiners to qualify as additional offtakers of the Rajasthan crude
-Processed crude is being safely trucked to storage tanks at coastal port of Kandla and the first cargo was delivered to Government of India nominee, Mangalore Refinery and Petrochemicals Limited (MRPL) on Oct. 9
-Train two (50,000 bopd capacity) is expected to be ready by early 2010 with the contractors focused on optimising completion
-Construction of Train three (50,000 bopd capacity) is targeted to attain Mangala plateau production of 125,000 bopd in H1, 2010
-Mangala Processing Terminal (MPT) to Salaya pipeline is 590 km of which 560 km has been laid; hydro testing has started and the section to Radhanpur in Gujarat will be complete by the end of the year
-Greenland: Sourcing of a drilling rig for Greenland exploration campaign in 2011 is underway
-Well site surveys in Disko blocks have been completed
-Processing of the 2009 2D seismic data from the east and south coast areas is ongoing
-Applied for pre-qualification for the 2010 bid round in Baffin Bay Group Production
-Rajasthan production commenced in August and represents 33 days.
-Average realised price per barrel of oil equivalent for Q3 is $51.48.
-In Oct. Cairn agreed a 10% farm out of its six operated Greenland blocks and a sale of 43.6 million shares in Cairn India Limited to PICL for a total consideration of $310 million.
-Cairn India also agreed a $1.6 billion refinancing with Standard Chartered Bank, the IFC and the State Bank of India.
-Facility will be used to repay existing facility of $850 million and continue to fund the ongoing projects in Rajasthan.
-Net cash of $630 million as at June.
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@dowjones.com