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Cairn to take 30% stake in prospect east of Shetland

CAIRN Energy is increasing its exposure to the UK North Sea by taking a stake in a prospect east of Shetland.

The Edinburgh-based company is taking a 30% holding in the licence containing the Aragon prospect after agreeing deals to acquire stakes in the asset from Bridge Energy and MPX North Sea.

Details of the transaction have not been disclosed.

However, the deal appears to reflect the confidence that Cairn Energy has in the exploration potential of the North Sea.

Renowned for making a series of bumper finds in India, Cairn Energy has invested heavily in building a big position in the North Sea in recent months.

Cairn Energy bought North Sea-focused Agora Oil and Gas and Nautical Petroleum for a total of around £700m last year as part of a plan to build a rebalanced portfolio.

Both companies currently have interests east of Shetland.

Cairn returned to the North Sea after spending $1bn drilling off Greenland without making a commercial find.

Japan's JX Nippon has also underlined its enthusiasm for the UK by agreeing to acquire a 25% stake in the licence containing Aragon.

Last month, the company agreed to buy a big portfolio of assets in the UK North Sea from Eni.

This includes an interest in the Mariner heavy oil field east of Shetland, in which Cairn Energy has a stake.

Aberdeen-based Bridge said all of the investors in the licence have agreed to participate in drilling a well to test the Aragon prospect prior to the first quarter 2015.

Chief executive Tom Reynolds said: "We are pleased both Cairn and JX Nippon have joined us in this licence (P1763), which demonstrates technical support for the potential within this acreage."

Subject to official approval of the deal, Bridge will retain a revised interest of 13.5% in the licence containing Aragon.

MPX North Sea will have 22.5%, Cairn Energy 30%, JX Nippon Exploration & Production (UK) Limited 25% and Sorgenia E&P (UK) Limited 9%.

Separately, Aberdeen-based Faroe Petroleum moved to conclude an agreement under which Norway's Petoro will take 25% stakes in the licences the company was awarded off Iceland last month.

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