Cairn underway with second Senegal well but offers no India news
Third quarter results from Cairn Energy offered no news on its Indian tax travails as the company said it will write off its unsuccessful Aragon and Ensis wells.
Capricorn Energy
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16:40 25/04/24
The FTSE 250 group, which reiterated that it was fully funded through to free cash flow in 2017, said it was now underway on its second well in Senegal, SNE-1, after a recent offshore oil discovery nearby of uncertain commerciality.
The initial discovery, in the basin opening FAN-1 well where Cairn is operator and has a large acreage, is undergoing evaluation to determine potential follow-up activity.
Chief executive Simon Thomson said this was currently being targeted for 2015.
"The two objectives in SNE-1 are estimated by Cairn to have a gross mean unrisked prospective resource of 182 mmbbls [million barrels] and 256 mmbbls respectively, and the well is anticipated to complete before the end of the year."
The CB-1 exploration well offshore Morocco, where Kosmos is operator and Cairn a 20% owner, is anticipated to start drilling in December.
Kosmos has identified a number of plays and several prospects using existing 3D data and CB-1 targets the largest of these. The acquisition of 5,100km2 of new 3D seismic data over the southern part of the block has now been completed and will be analysed over the coming months.
Group cash at 30 September stood at $953m, with a $575m reserve-based lending facility remaining undrawn.
On its 10%, or $927m, stake in Cairn India, which it is restricted from accessing, the company said "interactions are ongoing with the Indian income tax department".
Deutsche Bank analysts trimmed their target price on the shares from 210p to 185p, while smallcap-focused broker Oriel Securities said it remained 'neutral'.