Pura Vida Energy to farm-out 52% stake in Mazagan to Plains Exploration & Production Company 

(MENAFN - ProactiveInvestors - Australia) Pura Vida Energy (ASX: PVD) has entered into a key agreement to farm-out a 52% interest in the Mazagan permit offshore Morocco to U.S. independent Plains Exploration & Production Company (NYSE: PXP).

Plains, a US6.13 billion market cap, will pay Pura Vida US15 million upon completion of the transaction and fund 100% of the costs of various exploration activities to the greater of agreed AFE costs or US200 million, subject to a maximum of US215 million.

These exploration activities include:

- Drilling of an exploration well targeting the Toubkal prospect;
- A second exploration well targeting a prospect to be mutually agreed on;
- Potential sidetrack of the two firm wells;
- Potential deepening of the two firm wells; and
- Any 3D seismic survey over an area of up to 2,500 square kilometres.

The carried costs to be funded by Plains, which will take over as operator, includes Moroccan regulator ONHYM's 25% share of exploration costs.

Toubkal targets up to 1.5 billion barrels of oil and the well is likely to be drilled in 2014, in line with forecast rig availability.

An independent report by DeGolyer & MacNaughton covering 13 prospects in the Mazagan permit showed that permit had a total mean prospective resources of 7 billion barrels, of which 5.3 billion barrels were net to Pura Vida.

The report also said that the chance of success across all prospects range from 19% to 34% with Toubkal assigned a 31% chance of success.

Toubkal is considered to be a "look alike" of the billion barrel Jubilee field discovered by Kosmos offshore Ghana, which was the largest discovery in West Africa in the last decade.