Cairn ploughs on in the North Sea
Cairn Energy says it has the funds to fuel its projects through to production.
The independent oil and gas explorer expects first oil from its Catcher and Kraken developments east of the Shetland Islands this year. The wells are expected to produce 25,000 barrels of oil equivalent per day.
Simon Thomson, Chief Executive, Cairn Energy PLC said: “Cairn is fully-funded in respect of all of our capital commitments and we continue to actively assess and pursue new ventures”.
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The Edinburgh based company will also begin its third drilling program in Senegal later this month.
Ahead of the company’s annual results, which are due to be released in March, the company said that it spent £53m last year on exploration mostly to fund its projects in Senegal.
Cairn’s three drills are all built deep into the Atlantic just off Senegal where the exploration company made the largest global oil discovery in 2014.
The company has seen its fortunes spike and fall like the volatility of its products.
A three year court case continues in India where the energy company is seeking £4.5b retribution from the Indian government.
Cairn discovered oil in 2006 in Rajasthan and built up the oil fields there until they were producing. The company decided to restructure and after consulting the various authorities that it was proceeding correctly, it prepared for its Indian IPO.
Six years down the line the Indian government enacted retro-active taxation and asked Cairn to pay the capital gains tax it earned from the energy company's reshuffle. India then sequestered Cairn’s Rajasthan fields, which the oil company says cost it £1.3b.
Without the income from its Rajasthan fields the company faced a loss that it says resulted in the decision to cut of 40 per cent of its staff.
But this wasn’t the end of Cairn’s troubles.
When Cairn tried to sell the remaining majority stake of its Indian business and convert those proceeds into pounds to distribute to its shareholders, it was taken advantage of by two FOREX traders working at HSBC who artificially created a price spike and profited by the unnaturally high cost of the pounds that they sold the oil company.
The US Department of Justice initially charged the two traders. HSBC found no wrong-doing by the traders who were cleared by an internal investigation.
The company’s chief executive, Simon Thomson said: “The next 12 months will be an eventful period for Cairn. We will shortly embark on further exploration and appraisal drilling in Senegal and we continue to work towards first oil and cash flow from our North Sea assets”.
Cairn’s stock price today reached a year high of 249.00p up three per cent from the previous day’s close.