Kosmos Energy has entered into a farm-out agreement with Chevron Mauritania Exploration, a wholly-owned subsidiary of Chevron, covering the C8, C12 and C13 contract areas offshore Mauritania
Under the terms of the agreement, Chevron will acquire a 30 per cent non-operated working interest in each of the three areas in exchange for paying a disproportionate share of the costs of one exploration well and a second contingent exploration well, subject to maximum expenditure caps.
In addition, Chevron is expected to pay its proportionate share of previously incurred exploration costs. The company would not initially fund drilling of the Tortue Prospect but has retained the option to participate in this prospect after the transaction is completed.
Kosmos Energy CEO Andrew G. Inglis said, “This agreement with Chevron validates the quality and scale of our Mauritania licences, which enabled us to successfully farm out the acreage despite the current environment. The terms are consistent with our business strategy of retaining operatorship through exploration and collaborating with industry leading partners who bring significant technical expertise and strong financial capabilities.”
Kosmos Energy’s 2015 exploration work programme in Mauritania included two wells to be drilled by the Atwood Achiever drillship, the company said. The first exploration well would test the Tortue Prospect, with estimated resources of around two billion barrels of oil equivalent recoverable across both Mauritania and Senegal.
A second exploration well is expected to test the Marsouin Prospect with estimated resources of around 300mn barrels of oil equivalent recoverable, replacing the previously announced Orca Prospect in the 2015 drilling programme.
Kosmos Energy also holds rights to conduct exploration in the C8, C12 and C13 contract areas since 2012 under production sharing contracts with the Government of Mauritania. The blocks are contiguous, ranging in waterdepth between 1,600 metres and 3,000 metres, and have a combined acreage of 27,200 sq km.
After the closure of transactions, Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier (SMHPM), Mauritania’s national oil company, will have a carried interest. Kosmos Energy will own 60 per cent stake with Chevron and SMHPM holding 30 per cent and 10 per cent interest in all three contract areas.