13th Jan 2015 07:46
LONDON (Alliance News) - Cairn Energy PLC Tuesday said it is focusing on delivering a multi-well appraisal and exploration programme in Senegal during 2015, alongside developing its two projects in the UK North Sea.
The company said it was committed to its exploration programme in Senegal, in which it holds a 40% interest, after successful drilling on the Atlantic basin during 2014, saying it has potential for short-term growth.
"The large acreage position in Senegal offers material near-term growth potential with numerous follow on prospects identified, and the joint venture is well positioned to benefit from the current reduction in industry costs," said Chief Executive Simon Thomson.
The programme in Senegal is fully funded along with the Kraken and Catcher developments in the North Sea, which are targeting first oil in 2017. Cairn is targeting peak net targeted production of 20,000 barrels of oil equivalent per day from the two projects.
At the Catcher site, development drilling is expected to begin in the second half of 2015, following the installation of the first phase of subsea drilling templates, whilst the Kraken development remains on schedule for development drilling to begin at the end of the first half of the year, it said in a statement.
Cairn said it is expecting to complete the sale of a third of its 30% interest in the Catcher development and adjacent acreage in January, with the buyer carrying the company's exploration costs up to USD182 million, reducing capital expenditure to the end of 2017 by around USD380 million, it added.
Cairn said it continues to talk to the Indian Income Tax Department to gain access to its 10% shareholding in Cairn India Ltd, which was valued at USD702 million at the end of December. The company said it "is taking all necessary steps to protect shareholders' interests."
Cairn has also completed the reorganisation of staff and said it has reduced the headcount of the company by 40% to reduce costs.
At the end of December, Cairn reported a cash balance of USD869 million, with an additional undrawn USD575 million, seven year reserve based bank facility in place.
By Joshua Warner; [email protected]; @JoshAlliance
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