LONDON -- Oil and gas explorer Cairn Energy (ISE: CNE.L) released its interim results this morning, with the headline-grabbing news that it is to buy a 50% stake in the Foum Draa block in Morocco for $60 million and farm in as an operator.
The move is expected to lead to Cairn drilling one or more deepwater exploration wells. The company is aiming for the end of next year (Q4 2013), subject to securing a suitable drilling unit and regulatory approvals.
Cairn will become the biggest stakeholder with its 50% share, while other partners in the block include ONHYM (25%), San Leon (14.2%), Serica (8.3%), and Longreach (2.5%). The farm-in is expected to be completed in Q4 2012.
Cairn chief executive Simon Thomson said:
Cairn is actively rebalancing its portfolio to deliver exploration-led growth. With a strong balance sheet and the foundations for sustainable revenue generation in the coming years principally set, management attention and operational effort is focused on building a series of material exploration positions in prospective and fiscally attractive areas in order to offer investors exposure to capital growth potential through future transformational exploration.
Elsewhere in the half-yearly report, management announced a farm-out of a 30.625% interest to Statoil in the Pitu exploration block in Greenland -- although Cairn stated that these explorations "absolutely" remained a priority for the company -- while Q1 saw $3.5 billion returned to shareholders following the sale of Cairn India, though part of this return was spent acquiring Nautical Petroleum and Agora Oil & Gas operations. Pre-tax loss for H1 2012 declined from $141.3 million to $50 million.
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