Cairn, together with Cheiron (its consortium partner), announced the proposed acquisition of a portfolio of onshore upstream oil and gas production, development and exploration interests from Shell Egypt NV and Shell Austria GmbH in Egypt’s Western Desert, for a purchase price of $646 million (US$323 million net to Cairn), with additional contingent consideration of up to $280 million (US$140 million net to Cairn) if certain requirements are met.

Capricorn Egypt, a wholly owned subsidiary of Cairn, will acquire 50% of the Assets, with the remaining 50% acquired by Cheiron. The Acquisition is in line with Cairn’s strategy of seeking to grow, diversify and extend its production base. The portfolio offers low-cost production, near-term development and exploration potential, provides immediate operating cashflow contribution and adjusts our overall hydrocarbon split towards gas.

Simon Thomson, Chief Executive of Cairn said: “The proposed acquisition of Shell’s Western Desert assets in Egypt is an important step in our strategic ambition to expand and diversify our producing asset base, bringing material reserve and production additions and offering significant exploration potential.

“We are delighted to be entering a country that has significant oil and gas growth opportunities where the Government has created an attractive environment for inward investment. Our Joint Venture with established Egyptian operator Cheiron creates a strong partnership with extensive experience and complementary strengths across the upstream value chain.”

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Source: PetroleumAfrica