Cairn Energy PLC (LON:CNE) has now entered into a new deal with existing partner Woodside Petroleum for the sale of its stake in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) assets offshore Senegal.
A different deal was previously struck with LUKOIL back in July, but, Woodside has decided to exercise its ‘pre-emption’ rights, which give it the right to preferentially purchase the assets instead of LUKOIL.
The new deal is on the same terms as agreed with LUKOIL.
READ: Cairn reveals plan to Sangomar project
The deal sees Cairn exit its 40% stake in RSSD for up to US$400mln in cash, with US$300 due on completion and a US$100mln contingent payment tied to first oil production being achieved at the Sangomar field.
Previously, in July, Cairn said it planned to immediately return US$250mln of the sale proceeds to shareholders via a special dividend.
It also noted, at that time, that the divestment also removes exposure to significant field development spending over the next four years.
With a strong balance sheet, low breakeven price production and limited capital commitments the company expects to be in a flexible position to invest and grow its business.
Cairn noted that as the proposed sale constitutes a ‘class 1’ transaction under UK listing rules it will need to be approved by shareholders, and is also subject to approval by the Government of Sénégal.
A general meeting is therefore now scheduled for September 23.