() boss Simon Thomson has told investors that the oil firm remains well funded to create and capture value for shareholders.
Thomson, in Cairn’s interim results statement, highlighted the group’s strong balance sheet and imminent cashflows.
“In the North Sea, Kraken has commenced production and Catcher is scheduled for first oil later this year,” he added.
“In Senegal, planning work has commenced on the phased development of the world class SNE field.
“Cairn has also added to its exploration portfolio with exciting new opportunities in Norway, Ireland and Mexico creating additional drilling prospects in the near term.”
Interim results, for six months to June 30, confirmed that Cairn has some US$254mln of cash at the end of the half, and it noted that it is due some US$29mln of tax receivables from Norway in the second half.
The Catcher and Kraken development projects, meanwhile, have remaining 2017 capex requirements of US$35mln and US$75mln respectively, while it anticipates some US$150mln of exploration and appraisal spending during the rest of the year.
North Sea field development projects advance
Kraken started production during the second quarter, and work to commission facilities and ramp-up output are underway. It is anticipated that the field will hit plateau production of 50,000 barrels of oil per day in 2018 – that would equate to around 15,000 bopd for Cairn’s 29.5% stake in the project.
Catcher is, meanwhile, 20% owned by Cairn and it is expected to deliver 50,000 bopd gross and 10,000 bopd net to the oiler.
Attentions will turn to the proposed Skarfell development (20% owned by Cairn) in the first half of next year, as the project is targeting a final investment decision in that period. Skarfell would also be a 50,000 bopd project, with Cairn due 10,000 bopd net.
Senegal project targeting FID in 2018
Meanwhile, in Senegal, a major field development project is envisioned following a phase of exploration and appraisal success. Those efforts have so far unearthed an oil resource base of around 563mln barrels plus 1 trillion cubic feet of gas (and drilling programmes are ongoing).
Cairn sees an initial development of up to 25 wells unlocking around 240mln barrels of that resource, principally from the S500 lower reservoir, whilst later development would target the upper S400 reservoir.
The company highlighted that it has engaged major contractors – for floating production vessels and subsea work – ahead of a formal tendering process which is expected to get underway later this year.
Cairn’s plan is to have an evaluation report and an exploitation plan submitted to the Senegalese authorities during 2018, before making a final investment decision for the project by the end of next year.
Elsewhere, Cairn noted that its locked-up 5% shareholding in its former Indian business was valued at US$824mln at June 30. It added that it is still unable to access its shareholding, due to a pending resolution of a tax dispute, and some US$105mln of dividend receivables are fully impaired in its accounts.
In terms of financial results, the group reported US$11mln of revenue and a US$314mln profit, including US$322mln assigned to the Indian shareholding and dividends.