Shares of Edinburgh-based global oil and gas explorer Cairn Energy rose 4.5% after it said an appraisal of its “world-class” discovery off the coast of Senegal had significantly increased so-called “2C” oil resources to 473 million barrels.
The Senegal news came as Cairn delivered a half-year report on an otherwise tough six months.
Cairn said the continuing low oil price is both a risk and opportunity for the group.
“The low oil price is driving down industry costs,” it said.
“However, it has also reduced the amount of debt available under the group’s reserve based lending facility and may impact on the availability of other sources of funding for the group.”
Cairn chief executive Simon Thomson said: “Cairn’s exploration and appraisal focus in Senegal is balanced with development assets in the UK, with first oil targeted from both Kraken and Catcher (in the North Sea) during 2017 and in the meantime Cairn remains fully-funded in respect of all of its capital commitments.”
Cairn said its current sources of funding include cash of $414 million at mid year and a Norwegian tax receivable of $45 million.
The firm said its reserves based lending bank facility remained undrawn and “has expected availability of $260 million” by 2017.
Cairn said current uses of capital include $315 million of committed capital expenditure on the Kraken and Catcher projects to year end 2017 “by which time the projects are expected to be onstream and cashflow generating” and an envisaged future exploration and appraisal expenditure of $135 million across its portfolio.