Cairn Energy reports mixed news from North Sea projects

Cairn Energy announced an oil discovery on the 9/14a-17B well and associated side-track on the Agar-Plantain Prospect in the UK North Sea on Thursday, as well as a farm-out agreement for a 40% non-operated interest of the Chimera prospect in the UK North Sea.

The FTSE 250 also confirmed a commitment exploration well in the UK North Sea, targeting the Ekland prospect failed to encounter commercial hydrocarbons, and said the next well in its exploration programme would be Presto - formerly Stjerneskudd - on PL885 in the Norwegian North Sea.

It said that, based on preliminary analysis, the operator estimated the Agar-Plantain discovery held recoverable resources of between 15 million and 50 million barrels of oil equivalent.

The board said the discovery was located in close proximity to existing infrastructure, located 12 kilometres from the Beryl Bravo facility to the south west, and 14km from the Alvheim FPSO to the southeast.

Further evaluation of development options to establish commerciality would be undertaken by the joint venture partners in the coming months, Cairn said.

“The initial 9/14a-17B well on the Agar-Plantain Prospect was drilled safely to the target depth and encountered excellent quality oil and water bearing sands,” the Cairn board said in its statement.

“The wellbore delineated the eastern extent of the hydrocarbon discovery and the partners agreed to drill the contingent side-track to further appraise the discovery.

“The Agar side-track encountered a 20 metre gross interval of very high quality oil bearing sands.”

Cairn had an option to take over operatorship with respect to future activity on the Agar-Plantain project.

The Agar-Plantain well was currently being plugged and abandoned by operator Azinor Catalyst, Cairn said.

Working interests in the well were the operator Azinor Catalyst at 25%, Cairn at 50% and Faroe Petroleum at 25%.

The commitment exploration well on licence P2184 in the UK North Sea, targeting the Ekland prospect, where Cairn was the operator with a 45% working interest, failed to encounter commercial hydrocarbons and has been plugged and abandoned, the board confirmed.

It did announce, in more positive news, that it had entered into a farm out agreement for a 40% non-operated interest in Licence P2312, where Cairn was the operator with a 100% working interest.

That licence contained the Chimera prospect targeting 154 gross mmboe mean resource, or 92 mmboe net, in the UK North Sea, with plans to drill a well in the second half of 2019.

The farm out agreement was conditional upon regulatory consent.

“The next well in Cairn's exploration programme will be Presto - formerly Stjerneskudd - on PL885 in the Norwegian North Sea, targeting 160 gross mmboe mean resource - 48 mmboe net - with standalone potential and significant follow on potential with success,” Cairn added.

“The well is expected to spud in late December 2018 by operator Equinor.”

Cairn Energy holds a 30% working interest in the PL885 licence.