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Cairn Energy signs pact for sale of 10 per cent stake in Norway project
UK-based Cairn Energy PLC today announced it has entered into a farm-out agreement for the sale of a 10 percent interest in Nova development offshore project in Norway.
With effect from 1 January 2019, ONE-Dyas Norge AS will acquire 10 percent in the project by paying $59.5 million and the customary working capital adjustments on completion.
“Following this transaction Cairn will retain a participating interest of 10 per cent interest in the Nova development and reduce its capital expenditure to the end of 2021 in the Nova area by around $110 million,” the company said in a statement, adding it will use the proceeds to fund the group exploration and development activities.
The Nova field development plan was submitted and approved in mid-2018 by the Norwegian Petroleum Directorate with first oil targeted in 2021.
The transaction remains subject to written consent by the Norwegian Ministry of Petroleum and Energy, partner and third-party approvals. Jefferies International Limited acted as financial advisor to Cairn in connection with the farm out agreement.
The gross asset value of the interests being transferred, as per Cairn’s Annual Report issued on 12 March 2019, was $62.5 million and the net asset value was $28.5 million.
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