Kosmos Energy has entered into a farm-out agreement with Chevron Mauritania Exploration Limited, a wholly owned subsidiary of Chevron Corporation, covering the C8, C12 and C13 contract areas offshore Mauritania. Under the terms of the agreement, Chevron will acquire a 30 percent non-operated working interest in each of the C8, C12 and C13 contract 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 will pay its proportionate share of previously incurred exploration costs. Chevron will not initially fund drilling of the Tortue prospect, but retains the option to participate in this prospect after the transaction is completed. The transaction is subject to customary closing conditions, including Mauritanian government approval.
Andrew G. Inglis, chairman and chief executive officer, said: “This agreement with Chevron validates the quality and scale of our Mauritania licenses, 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.”
On closing the transaction, the interests in the three contract areas will be as follows, with Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier (SMHPM), the national oil company, having a carried interest: Kosmos 60% (Operator); Chevron 30%; and SMHPM 10%.
Kosmos’ 2015 exploration work program in Mauritania currently includes two wells to be drilled by the Atwood Achiever drillship. The first exploration well will test the Tortue prospect, with estimated resources of approximately 2 billion barrels of oil equivalent recoverable across both Mauritania and Senegal. A second exploration well will test the Marsouin prospect with estimated resources of approximately 300 million barrels of oil equivalent recoverable, replacing the previously announced Orca prospect in the 2015 drilling program.
Kosmos has held 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, range in water depth between 1,600 and 3,000 meters, and have combined acreage of approximately 27,200 square kilometers.
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