Cairn’s wholly owned subsidiary, Nautical Petroleum Limited, has acquired additional 4.5% interest in the Kraken development in the UK North Sea from First Oil bringing Cairn’s total working interest to 29.5%.
Cairn and EnQuest, the operator of the Kraken development, are both taking up First Oil’s interests pro-rata to their holdings prior to the transaction. EnQuest’s interests will increase to 70.5% following the transaction.
There is a nominal cash consideration payable in respect of the transaction however Cairn will waive its right to reclaim approximately USD 3 million of cash calls paid on behalf of First Oil in January and February 2016.
Cairn will acquire the reserves and resources associated with the additional interest and Cairn is not reimbursing First Oil in respect of costs incurred by First Oil to date., the company said.