New funding at Cairn Energy a 'key milestone' for North Sea fields

BNP Paribas has agreed to loan Cairn Energy 575m dollars to help fund the development of the latter's Kraken and Catcher fields in the North Sea.The fully underwritten seven-year debt facility is a "key milestone" for the fields, according to Cairn Chief Executive Simon Thomson."The cash flow from these fields will underpin delivery of future exploration programmes with appropriate capital allocation within a balanced portfolio," he said.The Scottish oil and gas group said that the amount available to fund the development projects will be determined by standard reserves based lending calculations and by reaching certain project milestones.Cairn, which owns a 30% working interest in the Catcher project, said that its field development plan has received board approvals from all of its partners and approval is expected shortly with first oil targeted mid-2017.Meanwhile, the Kraken development (25% owned) is "progressing on schedule" with first oil expected in the second half of 2016 to the first half of 2017.In a trading update, Cairn said it had net cash of $1.2bn at March 31st. By the end of 2017, it expects to have spent around $1bn on its development assets.As for the company's other operations, it said that it is still not able to sell its 10% remaining holding in Cairn India, valued at $1.1bn by the end of 2013, as it is still in talks with the Indian Income Tax Department regarding retrospective tax payments. The stock was 1% lower at 179.7p by 14:09 on Thursday.Bc Capricorn Energy PLC