Santos to acquire Cairn Energ

RNS Number : 5887V

Cairn Energy PLC

04 November 2010

 



FOR IMMEDIATE RELEASE                                                                                           4 November 2010

CAIRN ENERGY PLC ("Cairn")

Santos to acquire Cairn Energy Sangu Field Limited

Cairn Energy PLC ("Cairn") announces that its wholly-owned subsidiary Capricorn Energy Limited ("Capricorn") has today entered into a conditional sale and purchase agreement ("SPA") with Santos International Holdings Pty Limited ("Santos").

Pursuant to the SPA, Santos will acquire the entire issued share capital of Cairn Energy Sangu Field Limited ("CESFL"), which holds a 37.50 per cent interest in the producing Sangu gas field, offshore Bangladesh, and a 50 per cent interest in Block 16 exploration acreage.  CESFL is also the operator of the Sangu gas field.

Santos will acquire all of the interests of Cairn in Bangladesh and in consideration will assume the obligations of CESFL. As a result of this transaction, Cairn will no longer hold any interests in Bangladesh. 

Cairn has always striven to operate in the best interests of its shareholders, workforce, the local communities and the people of Bangladesh, running operations which have had a strong safety record while benefiting local communities with a comprehensive range of community programmes.

Cairn believes that now is the right time to transfer the full management of CESFL to its current partner, Santos, subject to certain conditions.

Simon Thomson, Commercial and Legal Director, Cairn Energy, said:

 "Over the last 16 years, Cairn has been a strong supporter of international investment in Bangladesh and with its partners has invested more than US $1 billion in Bangladesh helping to provide Bangladesh and its people with energy security.  Cairn is proud of its achievements in Bangladesh, and believes that now is an appropriate time for Santos to take over the management and ownership of CESFL."

Santos first invested in Bangladesh in 2007 with the purchase of Cairn Energy Bangladesh Limited ("CEBL"). Santos is committed to ongoing investment in Bangladesh and plans to drill three wells in the Sangu area in 2011 after acquiring seismic surveys this year.

Martyn Eames, Vice President Asia Pacific, Santos Ltd, said the acquisition of CESFL was consistent with Santos' Asian strategy of building material and sustainable businesses to meet growing domestic energy needs.

"We look forward to Cairn's Bangladesh team joining us and Santos assuming operatorship of Sangu. We will work to help meet the country's growing energy demand."

Enquiries to:

Cairn Energy PLC Sir Bill Gammell, Chief Executive Dr Mike Watts, Deputy Chief Executive Jann Brown, Finance Director David Nisbet, Corporate Affairs	Tel: [phone]
Brunswick Group LLP Patrick Handley David Litterick	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.

Ø 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 11 acreage blocks in India and Sri Lanka. Cairn currently retains a 62.37% interest in Cairn India.

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

Ø "Cairn" where referred to in this release means Cairn Energy PLC and/or its subsidiaries (including Cairn India and Capricorn), as appropriate.

Ø "Cairn India" where referred to in the release means Cairn India Limited and/or its subsidiaries, as appropriate.

Ø Cairn has previously focused its activities on the geographic region of South Asia, resulting 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.

Ø Cairn India is headquartered in Gurgaon on the outskirts of Delhi, with operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan.

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

Ø For the year ended 31 December 2009 CESFL generated revenue of $13.2 million and reported a loss before tax of $3.7 million.  Profit for the year, excluding exceptional items and impairments, was $0.5m.  As at 30 June 2010, CESFL's gross assets were $17.1 million.

Ø CESFL is Cairn's only Bangladesh interest.

For further information on Cairn please go to: www.cairnenergy.com

Santos Ltd

Ø Santos Ltd. ("Santos") is an Adelaide-based oil and gas exploration and production company listed on the Australian Stock Exchange.

Ø An Australian energy pioneer since 1954, Santos is one of the country's leading gas producers, supplying Australian and Asian customers. 

Ø Santos has been providing Australia with natural gas for more than 40 years. The company today is the largest producer of natural gas to the Australian domestic market, supplying 17% of the nation's gas needs. 

Ø Santos has also developed major oil and liquids businesses in Australia and operates in all mainland Australia states and the Northern Territory. 

Ø Santos has built a strong and reliable production business in Indonesia and is further developing its Asian business through development projects and exploration investment. 

Ø Santos also has interests in four LNG projects, led by the GLNG project in Queensland - a leading project in converting coal seam gas into LNG. Also in Santos' LNG portfolio are the PNG LNG project, which was formally approved in December 2009, Bonaparte LNG, a proposed floating LNG project in the Timor Sea, and Darwin LNG, Santos' first LNG venture, which began production in 2006. 

Ø Santos has about 2,200 employees working across its operations in Australia and Asia and had 2009 production of 54 million barrels of oil equivalent.

For further information on Santos please go to: www.santos.com

 

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