Cairn Energy open to growth opportunities as pre-tax losses narrow

UK exploration company Cairn Energy has said it is open to new “growth opportunities” as it enters a pivotal year, during which it will receive production from two key developments in the North Sea.

Edinburgh-based Cairn has been linked to North Sea oil and gas assets up for sale by Denmark’s Dong Energy.

In its full year results on Wednesday, Cairn said it is evaluating new opportunities “to allow us to create value through successful exploration and discovered resources”.

The group has described 2017 as an “eventful” year with two large North Sea developments – Kraken and Catcher – due to produce their first oil. Cairn has a 20 per cent stake in the Catcher field and a 29.5 per cent interest in Kraken.

Cairn is also continuing to drill in Senegal. It was the first company to drill deepwater wells off the coast of Senegal and in 2014 made two significant discoveries.

The group is this year carrying out work to firm up potential resources at one of the two discoveries, SNE. If it decides to proceed with the field, first oil is expected in 2021-23.

Simon Thomson, chief executive of Cairn, stressed the company has a “fully funded” balance sheet to support its current activities.

Cairn currently doesn’t have any revenues; its losses before tax last year narrowed to $151.5m from $497.8m a year earlier. It ended the year with $335m of cash and an undrawn reserve-based lending facility of up to $400m.

Mr Thomson said:

2017 will see first oil from our North Sea developments and progression of an exciting ongoing exploration and appraisal drilling programme in Senegal, all against a backdrop of increased financial flexibility.

The company remains well-positioned to deliver further value for shareholders from multiple catalysts within the portfolio.