Cairn Announce Pre-close Update

Cairn Announce Pre-close Update

Cairn Energy PLC intends to announce its preliminary results for the year to 31 December 2014 on Tuesday 10 March 2015. In advance of these results, Cairn is providing information on recent operations and guidance in respect of the Group’s trading performance in 2014. This information is unaudited and is subject to further review.

Simon Thomson, Chief Executive, Cairn Energy PLC said:

    “Our focus in 2015 is on delivering a multi well appraisal and exploration programme in Senegal, following our success in opening up this new Atlantic Margin basin last year.

    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.

    Cairn is fully funded to deliver its exploration and appraisal programme, along with the Kraken and Catcher developments which are on track for first oil in 2017.
    The company continues to seek a resolution to the Indian tax situation.”

Corporate and Finance

  • Group net cash at 31 December 2014 of US$869 million (m)
  • US$575m seven year Reserve Based Lending bank facility remains undrawn
  • Completion expected January 2015 of the sale of 10% interest in the Catcher development and adjacent acreage for a carry of Cairn’s exploration and development costs up to a cap of US$182m, effective 1 January 2014. This transaction reduces forward capex to end 2017 by US$380m. Cairn will retain 20% WI in the Catcher licence
  • Group reorganisation now complete; with subsequent 40% reduction in headcount (across employees and contractors)
  • While interactions are ongoing with the Indian Income Tax Department, Cairn remains unable to access the value in its 10% residual shareholding in Cairn India Limited (CIL) valued at US$702m at 31 December 2014. Cairn is continuing to take all necessary steps to protect shareholders’ interests
    Capital Markets day on Senegal planned for H1 2015

    Catcher and Kraken developments in the UK North Sea on track for first oil from 2017; peak net targeted production to Cairn of 20,000 boepd (following completion of the Dyas transaction)

    First steel cutting of Catcher FPSO hull commenced H1 2015 and development drilling scheduled to commence H2 2015, following installation of the first phase of subsea drilling templates

    Kraken development drilling scheduled to commence end of H1 2015; FPSO construction continues in Singapore and fabrication of main process modules has started

    Atlantic Margin – Senegal
    Working closely with the Government of Senegal and its JV partners, Cairn is preparing a 2015 operated multi well evaluation programme (Cairn Operator 40% WI)
    Planned programme to consist of appraisal and exploration drilling
    Post well analysis of the SNE-1 and FAN-1 discoveries is proceeding in line with expectations; further details will be provided to the market in due course
    Atlantic Margin – Morocco
    Exploration well in the Cap Boujdour contract area is currently operating (Kosmos operator, Cairn 20% WI)
    Atlantic Margin – Republic of Ireland
    Spanish Point appraisal well (Cairn Operator 38% WI) offshore Republic of Ireland planned to be drilled in H1 2015
    North West Europe
    Programme of non-operated wells in North Sea
    West of Kraken, UK North Sea (EnQuest operator, Cairn 25% WI), currently operating
    Crossbill, Norwegian North Sea (Wintershall operator, Cairn 20% WI), Q1 2015
    Additional non-operated wells for 2015 remain subject to final investment decision by partners
    Process to pre-qualify as Operator in Norway under way
    Pursuing recent entry into Barents Sea with possible applications in 23rd licence round
    APA 2014 licence round awards expected Q1 2015

    Two transactions agreed with Statoil Petroleum AS and Statoil (U.K.) Limited in UK Continental Shelf (UKCS) and Norwegian Continental Shelf (NCS)
    Cairn farmed-in to 20% WI in licence PL420, NCS, adjacent to the Skarfjell discovery, where the recently drilled Atlas prospect encountered good quality reservoir rocks with traces of petroleum. Extensive data acquisition and sampling have been carried out and the well has been permanently plugged and abandoned

    Cairn farm-down of 10% WI in licences P2040 and P2086, UKCS (subject to UK regulatory, partner and third party approvals)

    Source: Cairn Energy PLC

    Oil and Gas Press