(Preliminary Results Announcement) PDF 0.71MB - Cairn Energy PLC

6 Events after the Balance Sheet Date6.1 Farm-in Agreement with FAR LimitedSubsequent to the year end, Cairn has agreed a proposed farm-in as Operator of three blocks offshore Senegal inWest Africa, subject to regulatory approval. The three contiguous blocks – Rufisque, Sangomar and Sangomar Deep -are currently operated by FAR Limited (FAR) with Petrosen (the Senegal National Oil Company) as a Joint Venture(JV) partner. FAR is an independent Australian Securities Exchange listed oil and gas explorer with explorationinterests which include West and East Africa.Cairn is to acquire a 65% working interest (WI) and Operatorship by fully funding the 100% costs of one explorationwell to an investment cap. Thereafter exploration costs will be apportioned Cairn 72.2% (WI 65%), FAR 27.8% (WI25%) and Petrosen 0.0% (WI 10%). As part of the transaction Cairn will also pay 72.2% of costs incurred on the blocksby FAR to date, a total of ~$10m.The working and paying interests for any development will be Cairn 59.2%, FAR Petroleum 22.8% and Petrosen 18%.In the event that FAR wishes to subsequently farm-down additional equity Cairn will retain some preferential rights.This transaction will add a number of potentially drillable prospects to the frontier exploration inventory and drillingprogramme in the next 18 months.36