(Alliance News) - Cairn Energy PLC on Tuesday said its first half output sat at the top end of guidance, but the oil and gas explorer swung to loss, booking hefty impairments.
Revenue in the six months to June 30 was down 20% year-on-year at USD214.9 million from USD270.3 million. Cairn swung to a pretax loss of USD284.4 million from a USD73.2 million profit.
The company booked a USD144.7 million impairment of intangible exploration-appraisal assets, against none a year earlier. In addition, Cairn reported USD94.6 million in impairments of property, plant & equipment, after no such costs in the first half of 2019.
What's more, Cairn posted USD67.6 million in impairments for unsuccessful exploration, following a USD1.1 million gain last year.
Oil companies have booked bruising impairments since the start of 2020. Brent prices have been under pressure due to in-fighting among producing countries and a collapse in demand due to the Covid-19 pandemic.
Cairn's average sales price during the period was USD40.21 a barrel, 41% lower year-on-year from USD67.84.
A barrel of North Sea benchmark Brent fetched USD42.20 on Tuesday morning.
More promisingly, net oil production during the six-month period averaged 22,400 barrels of oil per day, towards the top end of company guidance.
Its annual forecast is for oil production between 21,000 and 23,000 barrels of oil per day net.
Cairn Energy in July said it will pay a USD250 million special dividend after it completes the sale of its Senegal interests.
Earlier in September, it agreed to sell its stake RSSD production sharing contract to Woodside Petroleum Ltd, after the Australian company exercised its right to pre-empt a proposed sale to Russia's NK Lukoil PAO.
Cairn shares were 1.5% lower at 138.40 pence each in London on Tuesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Capricorn Energy PLC (CNE)