Cairn Energy looks forward to new lower cost drilling offshore...

Cairn Energy looks forward to new lower cost drilling offshore Senegal

07:48 16 Aug 2016
After adding nearly 500mln barrels to its contingent resource base offshore Senegal in the first half the oil firm has reason to be optimistic going into the next phase of drilling.
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Closer to home two new oil fields are due online next year.
Cairn Energy Plc (LON:CNE) is looking forward to the next programme of drilling offshore Senegal, where it unearthed nearly 500mln barrels of resources at the SNE discovery through the last phase of appraisal work.
“Drilling is scheduled to re-commence in Senegal shortly, benefiting from lower costs across the sector,” chief executive Simon Thomson said in Cairn’s interim results statement.
“The programme contains options for multiple wells and in addition to ongoing appraisal of the SNE field, the joint venture continues to assess optimal locations for further exploration drilling on the acreage.”
Adding 473mln barrels of contingent oil resources in the first half of 2016 saw Cairn’s total resource base at SNE which now amounts to some 2.7bn barrels.

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Over two years the group has drilled a total of six well offshore Senegal, comprising what it describes as two ‘basin opening’ discoveries as well as four appraisal wells.
Thomson highlighted that the exploration and appraisal focus on Senegal is being balanced by the ongoing development of oil fields in the UK North Sea.
Both the Kraken and Catcher fields are advancing towards first oil, with the former due online in the first half of next year and the latter following in the sUBSequent six month period.
Cairn remains fully funded for all its capital commitments, according to Thomson.
As at June 30 2016, the oil company had US$414mln of net cash (a further US$45mln is due from Norway’s tax offce) and it had an undrawn reserves based lending facility, which is expected to have some US$260mln of peak availability by 2017, as well as US$175mln available in other credit.
Cairn’s share of development costs for Catcher (20% owned) and Kraken (29% owned) are forecast at US$315mln from the second half of 2016 through to the anticipated point of free cash flow by the end of 2017.
The group’s exploration and appraisal costs, meanwhile, are forecast at US$135mln of which US$55mln covers the currently committed activity.
Cairn, which currently has no revenue generating operations, reported a US$38mln loss for the six month period.