27th Mar 2020 10:01
(Alliance News) - Cairn Energy PLC on Friday said it will be reducing its projects costs amid the coronavirus outbreak.
The oil & gas exploration and development company said it is proactively reviewing each of its assets and related capital-expenditure programmes in light of coronavirus outbreak.
Cairn said it has already identified reductions and deferrals for the 2020 programme, representing an overall 23% reduction in capital expenditure for the year.
Planned 2020 capital expenditure on UK-producing assets is expected to be below USD45 million, Cairn said, reduced from the original forecast of USD65 million, as a result of cost savings identified and the deferral of certain activities planned for the Catcher fields.
Capital expenditure on exploration in 2020 is now anticipated to be USD100 million, reduced from the original forecast of USD150 million, the company said.
Further initiatives relating to the whole forward programme are under active discussion with joint venture partners, Cairn noted. These changes are not expected to hurt Cairn's previously disclosed output and production cost guidance for 2020.
At this stage, based on initiatives already identified, Cairn's expectation is that net capital expenditure on Sangomar, offshore Senegal, in 2020 will be below USD330 million, reduced from the original forecast of USD400 million. A broader review of capital expenditure for 2020 and future years is ongoing and the update will be provided in due course, Cairn said.
"Our balance sheet remains strong and we are proactively reviewing options for further capital expenditure savings and deferrals, whilst retaining the financial flexibility to add value on an ongoing basis," said Chief Executive Simon Thomson.
FTSE 250-listed Cairn shares were trading 4.5% lower in London on Friday at 82.42 pence each.
By Evelina Grecenko; [email protected]
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