Edinburgh-based oil and gas company Cairn Energy said it reduced its full-year loss to $95 million in 2016 — compared to a $516 million loss in 2015 — and flagged the potential of its assets in Senegal and the North Sea.

“In Senegal, we have confirmed the scale and potential of this world class asset, and following the appraisal success and contingent resource upgrade in 2016, we have now commenced the third phase of evaluation activity …” said Cairn.

“In the UK and Norway, we have high quality assets and have made significant progress in the last year.”

Cairn said the Kraken and Catcher development projects in the North Sea were below budget and on schedule to target first oil this year. 

It said the start up of these developments was significant as it would mark Cairn’s first production since 2012 when it sold the majority stake in its Indian business and returned the proceeds to shareholders. 

Cairn said the mature and emerging basins of the UK and Norway provided balance to the firm’s “frontier” exploration portfolio and would deliver the cash flow to sustain future exploration.

Cairn Energy CEO Simon Thomson said: “Cairn continues to deliver positive progress across its balanced portfolio.

“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.”