SOSINA - TOTAL signs farm-in agreement for LO 19/27 securing a 50% working interest and operatorship against carry for operational costs and contingent promoted carry for the first exploration well

TOTAL signs farm-in agreement for LO 19/27 securing a 50% working interest and operatorship against carry for operational costs and contingent promoted carry for the first exploration well

9 June 2017

Cairn signs option agreement for LO 19/27 securing an option over 20% working interest

SOSINA is pleased to provide an update on Licensing Option ("LO") 16/27, which lies in c. 1,300-metre water depth in the southern Porcupine Basin and is located c. 150 kilometres off the south west coast of Ireland. The Licencing Option is operated by Providence Resources Plc. ("Providence", 80%) on behalf of its partner SOSINA Exploration Limited ("SOSINA", 20%). LO 16/27 contains the Paleocene "Avalon" exploration prospect.

Farm-in Agreement with TOTAL for 50% Working Interest

Providence and SOSINA have signed a Farm-in Agreement ("FIA") with TOTAL E&P Ireland B.V., a wholly owned subsidiary of TOTAL S.A. In consideration for TOTAL taking a 50% working interest in LO 16/27, TOTAL will

Pay its pro-rata share of past gross costs of c. USD 0.175 million.
In addition to its pro-rata share, pay 21.4% of the past and future costs during the 2-year term of LO 16/27, subject to a gross cost cap of USD 1.33 million.
Under the terms of the FIA, and subject to Ministerial approval, TOTAL will assume Operatorship of LO 16/27 and any subsequent licensing authorisations issued.
In the event that the JV partners agree to convert LO 16/27 into a Frontier Exploration Licence, and a subsequent decision is taken to drill an exploration well, TOTAL will pay 60% of the drilling costs, subject to a gross well cap of 42 million USD.

The TOTAL farm-in is subject to the approval of the Minister of Communications, Climate Action and Environment. Subject to this, the resultant equity in LO 16/27 will be TOTAL (Operator - 50%), Providence (40%) and SOSINA (10%).

Option Agreement with Cairn for 20% Working Interest

Providence and SOSINA have signed an Option Agreement (the "Option") with Capricorn Ireland Limited ("Capricorn"), a wholly owned subsidiary of Cairn Energy PLC ("Cairn"). Under the terms of the Option, Capricorn has the right to farm-in to a 20% working interest in LO 16/27 from Providence & SOSINA. The Option can be exercised by Capricorn within 60 days of the completion (plugging and abandoning) of the upcoming 53/6-A well on Frontier Exploration Licence 2/14.

If Capricorn elects to exercise the Option, Providence, SOSINA and Capricorn will enter into an agreed Farm-in Agreement ("FIA") to effect the transfer of a 20% working interest in FEL 2/14 to Capricorn, based on the following terms where Capricorn will:

Pay its pro-rata share of past gross costs of up to USD 0.175 million.
In addition to its pro-rata share, pay 8.6% of the past and future costs during the 2-year term of LO 16/27, subject to a gross cost cap of USD 1.33 million.
In the event that the JV partners agree to convert LO 16/27 into a Frontier Exploration Licence, and a subsequent decision is taken to drill an exploration well, Capricorn will pay 24% of the drilling costs, subject to a gross well cap of USD 42 million.

In the event that Capricorn exercises the Option, the final equity would be TOTAL (Operator - 50%), Providence (24%), Capricorn (20%) and SOSINA (6%). Conclusion of any farm-in by Cairn would be subject to the approval by the Minister of Communications, Climate Action and Environment.

About TOTAL

TOTAL is a global integrated energy producer and provider, a leading international oil and gas company, and a major player in solar energy with SunPower and TOTAL Solar. TOTAL's 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, TOTAL focuses on ensuring that its operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits.

About Cairn

Cairn Energy PLC is one of Europe's leading independent oil and gas exploration and development companies and is listed on the London Stock Exchange. Cairn has discovered and developed oil and gas reserves in a variety of locations around the world. Cairn's business operations are focused on opportunities across a growing resource base in Senegal, the UK and Norway. Cairn's portfolio also includes assets in Africa and the Mediterranean. Cairn is headquartered in Edinburgh, Scotland with operational offices in London, Norway and Senegal.

Providence (80%) and SOSINA (20%) were awarded Licensing Option 16/27 in July 2016 as part of the 2015 Atlantic Margin Licensing Round. During regional interpretation and mapping of vintage 2D seismic reflection data, Providence identified an area extensive (c. 550 km²) north-south orientated Paleocene basin-floor channel and fan system (‘Avalon') within the axial part of the Porcupine Basin.

About Avalon

The Avalon system, which is located c. 2,500 metres BML, is interpreted to be sourced from the north of the basin and shales out in a southerly distal direction. A structural flexure down to the north negates the requirement for sandstone pinch out in the proximal direction, greatly improving reservoir sealing potential. The presence of a thick sandstone interval is indicated by compactional drape morphologies, which are imaged within parts of the system. The pre-existing Mesozoic structural grain appears to have exerted some control on deposition as evidenced by thickening of the system within pre-existing structural lows.

Whilst limited seismic reflection gather data were available during the evaluation phase, the available data suggest the potential for a depth-conformant amplitude versus offset (‘AVO') anomaly similar to the nearby Druid prospect in FEL 2/14. The main element of the agreed work programme during the 2-year Option period is the purchase, reprocessing and interpretation of existing 2D seismic reflection data.

Contact:

Mr. John Ødegaard,

Chairman of the Board

Mobile: +45 27 26 00 03

About SOSINA

SOSINA Exploration Ltd. is an independent oil and gas exploration company. The Company was founded in 2004, but with roots back as a sister company to the company Odegaard Ltd. acquired in 2006 by Schlumberger Inc.

SOSINA's active oil and gas portfolio includes offshore interests in Ireland and the UK. SOSINA's portfolio is balanced between appraisal and exploration assets. Comprehensive information on SOSINA and its oil and gas portfolio is available from SOSINA's website at www.sosina.co.uk.