Cairn Energy First Half Loss Widens Ahead Of Big Development Spending

Tue, 18th Aug 2015 06:33

LONDON (Alliance News) - Cairn Energy PLC on Tuesday said its pretax loss significantly widened in the first half of 2015 as it prepares to spend big in the second half on developing its assets in Senegal and the North Sea.

The FTSE 250-listed oil producer reported a pretax loss of USD234.7 million in the first half of 2015, widening from a USD62.1 million loss a year earlier, after the company booked an USD177.1 million impairment against its remaining investment in Cairn India Ltd. The company does not generate any revenue.

At the end of the first half, the exploration and development company reported a cash balance of USD725.0 million and it still has a USD575.0 million bank facility that remains undrawn.

Operationally, the company is focused on its development in Senegal, where it plans to begin a drilling campaign in the fourth quarter of 2015 before stretching into the first half of 2016. The final budget for that campaign will be released in the third quarter, but Cairn said it expects exploration and appraisal expenditure for the committed programme of around USD170 million.

At the Craken and Catcher developments in the UK North Sea, development capital expenditure remains unchanged at a net cost to Cairn of USD615 million from the second half of 2015. Those projects are still expected to be cashflow generative before the end of 2015.

At the end of June, the company had a total of 47.2 million barrels of oil equivalent as 2P reserves, meaning proven and probable.

By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance

Capricorn Energy PLC