Australian oil and gas explorer, Pura Vida, has agreed to sell a 52 per cent stake in its Mazagan exploration permit, offshore Morocco
Plains Exploration and Production (PXP) has acquired the stake and will provide the necessary funds to test the license's potential.
Pura Vida will receive a cash payment of US$15mn on completion of the transaction and PXP will fund the entire cost of the exploration operations.
The new partners will start by drilling the Toubkal target, which may contain up to 1.5bn barrels of oil.
Pura Vida said that the well is likely to be drilled in 2014, in line with its existing forecast of rig availability and the drilling programmes being planned by operators of neighbouring blocks.
"Amongst the Mazagan joint venture and our nearest neighbours, we expect at least five exploration wells in the locality of Morocco to be drilled in 2014,” said Pura Vida's managing director, Damon Neaves.
“This represents an unprecedented investment in exploration offshore Morocco which will target significant resources and has the potential to alter the energy landscape in Morocco.”
Argonaut Securities analyst, David Wall, added, "Based on drilling plans by Genel (one well), Cairn (two wells) and Kosmos (two wells) on adjacent permits in 2013/14, it is likely that Pura Vida and PXP will also drill, using the same rig, in this time-frame.
"The cash back, multiple wells with large expenditure capital, as well as near term drilling, makes this arguably the best farm-out deal executed by an ASX-listed exploration company.”
The farm-out includes a carry on two wells and additional exploration activity including the deepening of wells and more 3D seismic.
After the farm-out is completed, the partners in the Mazagan exploration permit will be: PXP (52 per cent), National Oil Company (25 per cent) and Pura Vida (23 per cent).
