Agora Announcements

RNS Number : 3319B

Cairn Energy PLC

16 April 2012

 



For Immediate Release                                                                                               16 April 2012

CAIRN ENERGY PLC

Significant light oil discovery at the Skarfjell Prospect

Abandonment of Cladhan South exploration well

The enclosed announcements were issued today by Agora Oil & Gas AS ("Agora"). On Tuesday 3 April 2012, Cairn Energy PLC announced the acquisition of Agora. Completion of the acquisition is subject to regulatory approvals.

Significant light oil discovery at the Skarfjell Prospect

The Stavanger-based oil company Agora Oil & Gas AS ("Agora") is pleased to announce that Wintershall Norge AS, as the operator of Norwegian production licence 418 (Agora 20%), is in the process of completing drilling of wildcat well 35/9-7 in the north-eastern Norwegian North Sea as an oil discovery.

The well drilled on the Skarfjell Prospect is located approximately 17 kilometres (km) southwest of the Gjøa Field between the Grosbeak Discovery in PL378 to the south and the Titan Discovery in PL420 to the north. The exploration target for the well was to prove hydrocarbons in upper Jurassic reservoir rocks.

The well found very good quality upper Jurassic reservoir sandstone containing light oil over a 168 metres (m) gross interval. No fluid contact was observed, and downdip appraisal is therefore required to establish the height of the oil column in the Skarfjell structure.  Due to ongoing rig schedule commitments the well was not tested but extensive data acquisition and sampling have been carried out.

An estimated preliminary resource range is between 60 and 160 million barrels of recoverable oil. The discovery is likely to be commercial, and a new 3D seismic acquisition programme over the discovery is already underway. The licence group will now focus on integrating the well and seismic data in order to plan the required appraisal programme for the discovery. The 35/9-7 well will now be permanently plugged and abandoned.

The well was drilled by the Songa Delta drilling unit to a vertical depth of 2976m below the sea surface and terminated in the Middle Jurassic Brent Gp / Rannoch Fm. Water depth at the site is 368m.

The PL418 license group comprises Wintershall Norge ASA (45%, Op.), Bayerngas Norge AS (20%), Agora (20%) and Edison International Norway Branch (15%).

Svein Ilebekk, Chief Executive of Agora Oil & Gas said:

"We are very pleased to make such a promising discovery with our first well in the Norwegian sector. The combination of good reservoir properties, long oil column and large in place volumes makes us confident in the commerciality of Skarfjell and we see good potential  for the appraisal campaign to prove further upside volumes beyond the current range indicated by this well.

On April 3^rd, it was announced that Cairn Energy PLC has proposed to acquire Agora. Skarfjell highlights the benefits of such a transaction; Cairn's size and strength will help us support the development and production of Skarfjell, should that ultimately prove to be the most attractive way of realising value from this discovery."

Agora Contacts:

Svein Ilebekk (CEO, [phone])

Chris Elliott (Exploration Manager, [phone])

Abandonment of Cladhan South exploration well

The Stavanger-based oil company Agora Oil & Gas AS ("Agora") wishes to announce that the 210/29c-5 Cladhan South exploration well in the UK Northern North Sea is to be plugged and abandoned.

The Cladhan South prospect is located approximately 7 kilometres south of the Cladhan field in a separate seismically defined Upper Jurassic reservoir fairway.

The well reached TD at 10,361' measured depth (-9,688' TVDSS) approximately 50' TVD above the base of the main Upper Jurassic reservoir sequence. Operational difficulties meant that no further progress could be made and the well is currently being plugged and abandoned. No clear evidence of hydrocarbons was seen in the reservoir section drilled.

The well was drilled by the Sedco 704 in UK licence P1680. The licence group comprises Sterling Resources (U.K.) Ltd. (25% and Operator), Valiant Exploration Limited (30%), Wintershall (UK North Sea) Limited (25%) and Agora Oil & Gas (UK) Limited (20%).

Agora Contacts:

Svein Ilebekk (CEO, [phone])

Chris Elliott (Exploration Manager, [phone])

Enquiries:

Analysts/Investors Simon Thomson, Chief Executive Jann Brown, Managing Director & CFO Mike Watts, Deputy Chief Executive David Nisbet, Corporate Affairs	Tel: [phone]
Media Patrick Handley, David Litterick Brunswick Group LLP	Tel: [phone]

NOTES TO EDITORS

Cairn Energy PLC

Ø Cairn Energy PLC ("Cairn") is an Edinburgh-based oil and gas exploration and production company listed on the London Stock Exchange. Following the IPO of Cairn India in January 2007, there are two separate arms to the business:

o  Cairn India limited ("Cairn India") is listed on the Bombay Stock Exchange and the National Stock Exchange of India and has interests in a total of 10 acreage blocks in India and Sri Lanka. Cairn currently retains approximately 22% interest in Cairn India (on an un-diluted basis).

o  Capricorn Oil Limited ("Capricorn"), a 100% subsidiary of Cairn, is focused on exploration. Capricorn has assets in Nepal, Greenland, Albania and Spain.

Ø Cairn historically focused its activities on the geographic region of South Asia, which has already resulted in a significant number of oil and gas discoveries.  In particular, Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. Cairn has now made more than 20 discoveries in Rajasthan block RJ-ON-90/1. Production from Rajasthan started in August 2009 and is expected to reach the approved plateau of 175,000 bopd in 2012.

Ø Cairn Energy PLC (including Capricorn) is run from Edinburgh with operational offices in Kathmandu, Nuuk and Spain.

Cairn in Greenland

Ø Cairn through its subsidiary, Capricorn, operates 11 blocks offshore Greenland.

Ø Cairn carried out extensive Environmental and Social Impact Assessments to identify how potential environmental and social impacts of its drilling programme can be avoided or mitigated.

Ø A total of 14 exploration wells have been drilled offshore Greenland to date, five of which were drilled in the 1970s, one in 2000, three in 2010 by Cairn Energy and five by Cairn Energy in 2011.

For further information on Cairn please see: www.cairnenergy.com

 

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