Cairn Energy has signalled its ambitions for African exploration, following its setback in Greenland and its battle with Indian tax authorities, in plans to develop what it calls a "world-class asset" in Senegal.
The Edinburgh-based business said it had submitted, along with joint venture partners, a three-year evaluation work plan to the government of Senegal led by an initial programme of three firm and three optional exploration and appraisal wells.
It said drilling would start in the final quarter of 2015 in Cairn's new "basin play" offshore Senegal, focused on the acreage around the SNE-1 discovery well.
Cairn cheered shareholders six months ago when it announced two oil finds in rapid succession, and it has said the existing discoveries and the currently identified prospects and leads have an estimated mean risked resource base of more than a billion barrels.
"Cairn believes there is substantial prospectivity across all three of its blocks and to date at least five prospects and 18 leads have been identified and continue to be matured to drillable status," the company said.
Simon Thomson, chief executive, added: "Cairn made two significant discoveries offshore Senegal in 2014 proving a hydrocarbon system in a new and emerging Atlantic Margin Basin. We are excited about the exploration and appraisal opportunity of this world class asset."
The three-year plan was "designed to lay the foundation for a long term multi-field, multi phase exploitation plan", he said.
Mr Thomson added: "Our focus will be to add value in Senegal within a balanced, well-funded company. We are well placed to take advantage of this exciting opportunity as we build on the success of last year."
In March Cairn was landed with a $1.6 bn (£1.1bn) billion tax bill by the Indian tax authorities but insisted it had paid all taxes due. It also reassured that its big investments in developing two North Sea fields were on schedule and would generate good cash flow, despite the oil price crash. The shares fell 7per cent to 152p at the time, but have rallied strongly since and yesterday rose 2.7p to 190.1p.
Cairn has not followed others in writing down North Sea book values, but it has ruled out further drilling off Greenland without further joint venture support, after sinking $1bn into the project without making a find.
It said the Ocean Rig Athena, a seventh generation dual activity drillship, had been selected for the Senegal drilling programme.
"The firm three-well programme is currently planned to include two appraisal wells of the SNE-1 discovery which will core and test the reservoir, as well as one shelf exploration well." There would also be seismic data acquisition over the Sangomar and Rufisque blocks to help fully map the prospectivity of the contract area.
A work programme and budget for the three optional wells would be presented to joint venture partners in the third quarter. "Targets for these wells will be drawn from a combination of further evaluation of the SNE-1 discovery, additional exploration in the shelf region, and exploration in the acreage around FAN-1. Drilling plans for these wells will be subject to ongoing FAN studies and the results of the first three firm wells."
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