Cairn boosts Senegal estimate as losses narrow

Edinburgh-based oil and gas explorer Cairn Energy said on Tuesday it has added 20% to its resource estimate for its oilfield off the coast of Senegal as it reported 2015 results showing its losses had narrowed.

Cairn said its estimate for the Senegal field had increased to 385 million barrels of oil after positive drilling results.

The company said its 2015 loss before tax from continuing operation was $497.8 million compared to a loss of $559.1 million in 2014.

Operating loss was $178.7 million, down from a $372.3 million loss in 2014.

Cairn, which has an ongoing tax arbitration dispute in India, said it had $603 million of group net cash at December 31, 2015.

“International arbitration proceedings have commenced to settle the Indian tax dispute with Cairn claiming full compensation for the value of which its shareholders have been deprived,” said the company.

Cairn said a decline in the market value of Cairn India Limited resulted in an impairment charge for the year of $319 million.

In its forward outlook, Cairn said Senegal would be its key focus in 2016. 

“Our attention is on confirming the scale of our Senegal discovery, expanding the resource base and moving it towards commercialisation,” said the firm.

Cairn said its two developments in the UK North Sea remained on schedule and on budget with first oil expected from 2017.

Cairn chief executive Simon Thomson said: “We are delighted with the results to date of our multi-well evaluation programme offshore Senegal, which has confirmed the scale and extent of the significant resource base in this world class asset.

 “Cairn’s 2C current resource estimate for the SNE field has gone up by 20 percent and the positive results of the latest appraisal well provide the potential to further increase the size of the SNE field.

“A combination of financial strength and continued exposure to material growth opportunities leaves Cairn well-placed to deliver additional value for shareholders from its balanced portfolio.”