Cairn to sell interest in six operated blocks offshore Greenland to PICL

Thu. October 15, 2009; Posted: 08:44 AM

Oct 15, 2009 (Datamonitor via COMTEX) -- CRNCF | Quote | Chart | News | PowerRating -- UK-based exploration and production firm Cairn Energy has entered into binding heads of terms with Petronas International Corporation, or PICL, the overseas arm of Petronas, under which Cairn has agreed to sell to PICL a 10% interest in its existing six operated blocks offshore Greenland, subject to the required government and partner approvals.

PICL has an option to increase its interest to 20% in any development in these blocks, in return for payment of further consideration to reflect a market valuation of the additional 10% interest at that time.

Cairn and PICL have also agreed to co-operate on an 80:20 basis on any other open door or bid round initiatives in Greenland. In addition, PICL has acquired from Cairn 43.6 million shares in Cairn India (CIL) representing a 2.3% stake in CIL, taking the total holding of PICL in CIL to 14.94%.

The total consideration to be paid by PICL in respect of the transactions is $310 million.

Bill Gammell, CEO of Cairn Energy, said: "We are delighted that Petronas is joining with us in Greenland as we take forward our leading exploration position. The acquisition of additional CIL shares by Petronas reflects our shared belief in the continuing growth potential of Rajasthan while giving Cairn increased financial and operational flexibility in line with our growing confidence in Greenland."

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