Cairn Energy farm-in to Foum Draa

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JERSEY, CHANNEL ISLANDS--(Marketwire -08/28/12)-

 28 August 2012                   LONGREACH OIL AND GAS LIMITEDCairn Energy PLC to farm-in to Longreach's Foum Draa Permits, offshoreMoroccoLONGREACH OIL AND GAS LIMITED (LOI.V) ("Longreach" or "theCompany"), an independent oil and gas company holding exploration andnear term development licences in Morocco, is pleased to announce that,subject to the consent of the Ministry of Energy and the Ministry ofFinance in Morocco, Cairn Energy plc ("Cairn"), through its subsidiaryCapricorn Exploration and Development Company Limited ("Capricorn"),will join Longreach and its joint venture partners, San Leon OffshoreMorocco B.V. and Serica Foum Draa B.V. (respectively "San Leon"and"Serica"), in the exploration of the set of permits which comprise theFoum Draa Offshore area ("Foum Draa") in Morocco.Under the transaction, Cairn will acquire a 50% operated equityinterest in Foum Draa, pro rata from each of Longreach, San Leon andSerica according to their respective equity interests. In return,Cairn will pay its equity interest share of past costs, being US$1.5million (US$150,000 net to Longreach) and will pay the first US$60million towards drilling of the commitment well required under theterms of the First Extension Period of the Foum Draa permits (includingin relation to ONHYM's 25% carried interest). As a result of thefarm-out, Longreach will hold an ongoing interest of 2.5% in the FoumDraa permits with San Leon and Serica holding 14.17% and 8.33%respectively. The joint venture partners have already informed theMoroccan authorities of their intention to proceed with the FirstExtension Period, which entails the drilling of a commitment welltargeted for 2013.Over the past 21/2 years, Longreach and its joint venture partners havecarried out extensive geological and geophysical analyses of the subsurface in Foum Draa. Having identified several prospectiveexploration targets, a farm-out process was initiated to attract apartner with the requisite financial and technical capability to drillin the relatively deep waters of Foum Draa. The transaction with Cairnis the successful result of that process.Commenting, Bryan Benitz, Chairman and CEO of Longreach, said:"Longreachand its joint venture partners are delighted to welcomeCairn into the Foum Draa permits, offshore Morocco. The work undertakenon the permits has shown considerable opportunities and bringing in anew partner such as Cairn will enable the partners to conduct near termexploration drilling on this licence.Following closely on from last week's announcement of Genel Energyfarming into our Sidi Moussa offshore acreage, this deal with Cairnfurther demonstrates industry appeal for Morocco. With a carriedinterest in two offshore wells and near term drilling opportunities forour onshore Sidi Moktar licence, our regionally focused business planis progressing well."                                -ENDS-For Further Information:LongreachBryan Benitz            Chairman & CEO               +44 20 3137 7756Pelham Bell PottingerMark Antelme / Philip Dennis / Rollo Crichton-Stuart +44 207 861 3232Additional information on Longreach Oil and Gas Limited can be found atwww.longreachoilandgas.comAdditional information on Longreach Oil and Gas Limited can also befound at www.sedar.comSpecial Note Regarding Forwarding Looking Statements:This press release contains forward-looking statements. Thesestatements relate to future events or the Company's future performance.All statements other than statements of historical fact areforward-looking statements. Forward-looking statements are often, butnot 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 thenegative of these terms or other similarterms. Forward-looking statements in this press release include, butare not limited to the completion of evaluations and processing andinterpretation of data, the performance characteristics of theCompany's oil and gas properties, capital expenditure programs,drilling plans, and realization of the anticipated benefits ofacquisitions.Forward-looking statements are only predictions. Forward-lookingstatements involve known and unknown risks, uncertainties and otherfactors that may cause actual results or events to differ materiallyfrom those anticipated in such forward-looking statements. Some of therisks and other factors which could cause results to differ materiallyfrom those expressed in the forward-looking statements contained inthis press release include, but are not limited to: general economicconditions in Canada, the Kingdom of Morocco and globally; industryconditions, including fluctuations in the price of oil and gas,governmental regulation of the oil and gas industry, includingenvironmental regulation; fluctuation in foreign exchange or interestrates; risks inherent in oil and gas operations; political risk;geological, technical, drilling and processing problems; unanticipatedoperating events which could cause commencement of drilling andproduction to be delayed; the need to obtain consents and approvalsfrom industry partners, regulatory authorities and other third-parties;stock market volatility and market valuations; competition for, amongother things, capital, acquisitions of reserves, undeveloped land andskilled personnel; incorrect assessments of the value of acquisitionsor resource estimates; any future inability to obtain additionalfunding, when required, on acceptable terms or at all; credit risk;changes in legislation; any unanticipated disputes or deficienciesrelated to title matters; dependence on management and key personnel;and risks associated with operating in and being part of a jointventure.Although the forward-looking statements contained in this press releaseare based upon assumptions which management of the Company believes tobe reasonable, the Company cannot assure that actual results will beconsistent with its expectations and assumptions. Undue relianceshould not be placed on the forward-looking statements contained inthis news release as there can be no assurance that the plans,intentions or expectations upon which they are based will occur. Thesestatements speak only as of the date of this press release, and theCompany does not undertake any obligation to publicly update or reviseany forward-looking statements except as expressly required byapplicable securities laws.Neither TSX Venture Exchange nor its Regulation Services Provider (asthat term is defined in policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.                    This information is provided by RNS          The company news service from the London Stock ExchangeEND
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