SOURCE: Longreach Oil & Gas Limited

August 28, 2012 02:08 ET

Cairn Energy farm-in to Foum Draa

JERSEY, CHANNEL ISLANDS--(Marketwire - Aug 28, 2012) -

28 August 2012


Cairn Energy PLC to farm-in to Longreach's Foum Draa Permits, offshore

Company"), an independent oil and gas company holding exploration and
near term development licences in Morocco, is pleased to announce that,
subject to the consent of the Ministry of Energy and the Ministry of
Finance in Morocco, Cairn Energy plc ("Cairn"), through its subsidiary
Capricorn Exploration and Development Company Limited ("Capricorn"),
will join Longreach and its joint venture partners, San Leon Offshore
Morocco B.V. and Serica Foum Draa B.V. (respectively "San Leon"
and"Serica"), in the exploration of the set of permits which comprise the
Foum Draa Offshore area ("Foum Draa") in Morocco.

Under the transaction, Cairn will acquire a 50% operated equity
interest in Foum Draa, pro rata from each of Longreach, San Leon and
Serica according to their respective equity interests. In return,
Cairn will pay its equity interest share of past costs, being US$1.5
million (US$150,000 net to Longreach) and will pay the first US$60
million towards drilling of the commitment well required under the
terms of the First Extension Period of the Foum Draa permits (including
in relation to ONHYM's 25% carried interest). As a result of the
farm-out, Longreach will hold an ongoing interest of 2.5% in the Foum
Draa permits with San Leon and Serica holding 14.17% and 8.33%
respectively. The joint venture partners have already informed the
Moroccan authorities of their intention to proceed with the First
Extension Period, which entails the drilling of a commitment well
targeted for 2013.

Over the past 21/2 years, Longreach and its joint venture partners have
carried out extensive geological and geophysical analyses of the sub
surface in Foum Draa. Having identified several prospective
exploration targets, a farm-out process was initiated to attract a
partner with the requisite financial and technical capability to drill
in the relatively deep waters of Foum Draa. The transaction with Cairn
is the successful result of that process.

Commenting, Bryan Benitz, Chairman and CEO of Longreach, said:"Longreach
and its joint venture partners are delighted to welcome
Cairn into the Foum Draa permits, offshore Morocco. The work undertaken
on the permits has shown considerable opportunities and bringing in a
new partner such as Cairn will enable the partners to conduct near term
exploration drilling on this licence.

Following closely on from last week's announcement of Genel Energy
farming into our Sidi Moussa offshore acreage, this deal with Cairn
further demonstrates industry appeal for Morocco. With a carried
interest in two offshore wells and near term drilling opportunities for
our onshore Sidi Moktar licence, our regionally focused business plan
is progressing well."


For Further Information:


Bryan Benitz            Chairman & CEO               +44 20 3137 7756

Pelham Bell Pottinger

Mark Antelme / Philip Dennis / Rollo Crichton-Stuart +44 207 861 3232

Additional information on Longreach Oil and Gas Limited can be found at 

Additional information on Longreach Oil and Gas Limited can also be
found at 

Special Note Regarding Forwarding Looking Statements:

This press release contains forward-looking statements. These
statements relate to future events or the Company's future performance.
All statements other than statements of historical fact are
forward-looking statements. Forward-looking statements are often, but
not always, identified by the use of words such as "may", "will","should",
"expect", "plan", "anticipate", "believe", "estimate","predict", "project",
"potential", "targeting", "intend", "could","might", "continue" or the
negative of these terms or other similar
terms. Forward-looking statements in this press release include, but
are not limited to the completion of evaluations and processing and
interpretation of data, the performance characteristics of the
Company's oil and gas properties, capital expenditure programs,
drilling plans, and realization of the anticipated benefits of

Forward-looking statements are only predictions. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. Some of the
risks and other factors which could cause results to differ materially
from those expressed in the forward-looking statements contained in
this press release include, but are not limited to: general economic
conditions in Canada, the Kingdom of Morocco and globally; industry
conditions, including fluctuations in the price of oil and gas,
governmental regulation of the oil and gas industry, including
environmental regulation; fluctuation in foreign exchange or interest
rates; risks inherent in oil and gas operations; political risk;
geological, technical, drilling and processing problems; unanticipated
operating events which could cause commencement of drilling and
production to be delayed; the need to obtain consents and approvals
from industry partners, regulatory authorities and other third-parties;
stock market volatility and market valuations; competition for, among
other things, capital, acquisitions of reserves, undeveloped land and
skilled personnel; incorrect assessments of the value of acquisitions
or resource estimates; any future inability to obtain additional
funding, when required, on acceptable terms or at all; credit risk;
changes in legislation; any unanticipated disputes or deficiencies
related to title matters; dependence on management and key personnel;
and risks associated with operating in and being part of a joint

Although the forward-looking statements contained in this press release
are based upon assumptions which management of the Company believes to
be reasonable, the Company cannot assure that actual results will be
consistent with its expectations and assumptions. Undue reliance
should not be placed on the forward-looking statements contained in
this news release as there can be no assurance that the plans,
intentions or expectations upon which they are based will occur. These
statements speak only as of the date of this press release, and the
Company does not undertake any obligation to publicly update or revise
any forward-looking statements except as expressly required by
applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.

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