Mediterranean Oil & Gas (MOG) has agreed to join Cairn Energy in its offshore Malta exploration efforts.
MOG will, subject to regulatory approval, take a 40% stake in Cairn subsidiary Transunion Petroleum in offshore areas Malta Area 3 - Blocks 1, 2 and 3.
Malta Area 3 is under a three-year Exploration Study Agreement (ESA) Cairn signed with the Government of Malta in December 2012.
It is in the Sicily Channel and covers about 6,000 sq km and is said by MOG to contain a number of prospective leads.
The ESA covers an initial two year period for geological studies, the reprocessing of existing 2D seismic data, the acquisition of new 2D seismic data and limited capital works.
It can then be extended for a in order to acquire 3D seismic and includes the right to negotiate a production sharing contract.
Under the terms of the agreement, MOG's subsidary Melita Exploration Company will take the 40% stake by paying 40% spending to date, amounting to a payment of about $365,000.
It addition, Melita has paid Transunion a cash fee of $50,000 in consideration for the assignment of their right to back in to the ESA and will pay consulting fees of $150,000 in respect of their knowledge of the blocks, as well as future provisions for sharing in the successful exploration of Area 3.
The move will add to MOG's Malta acreage. It is also a partner with operator Genel Energy in blocks in Offshore Area 4, which is planning to its first exploration well in the area in 4Q this year.
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