Cairn Energy to finalize Shell Egypt acquisition by end-September

The portfolio includes 13 onshore concessions

  

ArabFinance: Cairn Energy and partner Cheiron expect to finalize its takeover of Shell Egypt’s onshore oil and gas assets by the end of September, Cairn announced in a statement on September 7th.

The joint acquisition, which will see the assets split 50-50 between the UK-listed company and leading Egyptian independent player Cheiron Petroleum, is “advancing to completion”.

This is should be completed before the end of the third quarter (Q3).

In March, Shell revealed that it has agreed to sell its onshore portfolio to Cairn and Cheiron in a transaction worth $926 million.

The companies will initially pay $646 million for the assets, but a further $280 million could be added between 2021 and 2024 depending on oil prices and exploration efforts.

The portfolio includes 13 onshore concessions and Shell’s stake in Badr El-Din Petroleum (Bapetco), a joint venture company established with the state-owned Egyptian General Petroleum Corporation.

However, Cairn plans to ramp up investment in the first half of 2022 after closing the acquisition.

There is “significant short-cycle potential” for further exploration and the company is planning to drill 10 wells and three “seismic acquisition programmes”.

Cairn will fund the acquisition with a mixture of cash and debt. It will borrow $181 million across two loans and issue new shares worth $121 million. The remainder will be funded via existing cash balances.

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