Cairn Energy secures interests in two Mexican Gulf prospects

Cairn Energy announced on Tuesday that it had secured interests in two licences in the recent Mexico offshore bid round.

The FTSE 250 company said the licences - one operated and one non-operated, covering around 1,100 square kilometres - are located in the Gulf of Mexico, in the shallow water Sureste basin, in water depths of between 100 and 500 metres and around 50 km offshore.

Block 7 was led by operator ENI with a 45% interest, with Cairn holding 30% and Citla holding 25%, while Block 9 was led by operator Cairn with a 65%, joined by Citla at 35%.

The company said “multiple attractive prospects” in a variety of play types had been identified within the “highly prolific”, proven hydrocarbon province which had recently opened to international oil companies.

It said the Mexican Gulf region was significantly under-explored compared to the nearby analogous United States Gulf of Mexico.

The licences were secured by Capricorn Energy - a wholly owned subsidiary of Cairn Energy - with the production sharing contracts scheduled to be signed later this year with the Government of Mexico.

Cairn said the contract awards were subject to the final approval of the authorities, and it anticipated exploration drilling to commence in the 2019-2020 period on both blocks.

“We are delighted with these awards which we believe provide an exciting opportunity to build a strategic portfolio over time in this highly prolific yet under-explored region,” said CEO Simon Thomson.

“As we build on the success of discoveries in Senegal it is important to access new acreage to provide exploration drilling opportunities in the future.”

Thomson said Cairn and its partners had identified and secured its “favoured blocks” with multiple stand-alone prospects and numerous follow-on tie-back opportunities based on 3D seismic data.

“We are partnered with ENI, an experienced explorer and operator in Mexico, as well as Citla Energy, a Mexican focused, exploration company and look forward to working with our new partners and the Government of Mexico to deliver the work programme in the coming years.”