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Cairn Energy PLC CNE Interim Management Statement



  Cairn Energy PLC (CNE) - Interim Management Statement

RNS Number : 9429O
Cairn Energy PLC
18 October 2012
 



For Immediate
Release                                                                                              
18 October 2012

 

                 CAIRN ENERGY PLC ("Cairn" or "the Company")

                         Interim Management Statement

                                       

         Re-balancing the business to deliver exploration-led growth

Cairn Energy  PLC  is  today  issuing  its  Interim  Management  Statement  in 
accordance with the reporting requirements of the EU Transparency Directive.

 

Simon Thomson, Chief Executive, Cairn Energy PLC said:

 

"Cairn is  pleased  with the  progress  made  this year  in  re-balancing  the 
portfolio for exploration-led growth underpinned by sustainable cash flow.

 

Cairn's balance sheet strength, entrepreneurial exploration skills and
operational capabilities allow it to target high impact wells across
transformational frontier and mature basins whilst accessing further growth
from the Company's development and production assets."

 

Highlights

Finance

·      Group cash at 30 September 2012 of ~US$1.6 billion (bn)

 

·    On-market sales of an aggregate 11.5% shareholding in Cairn India Limited
(CIL) for  a  net  cash  consideration of  ~US$1.3  bn.   Cairn  retains  ~10% 
shareholding in CIL with current market value of ~US$1.2 bn 

 

Frontier Exploration

·      Acquired two operated frontier exploration blocks in Morocco with first
well targeted Q4 2013, subject to Government of Morocco approval

 

·      In Greenland, interpretation of 3D seismic on the Pitu Baffin Bay block
and southern Greenland acreage well advanced.  Targeting exploration  drilling 
in Pitu in 2014, subject to Government of Greenland approval

 

·      Farm-down of a 30.625%  interest in the Pitu  block to Statoil ASA  now 
completed

 

·      Results expected by end 2012 on bids submitted in Cyprus and Trinidad &
Tobago licensing rounds

 

·      Key frontier  exploration blocks target  >4 bn barrels  of Yet to  Find 
potential

 

UK and Norwegian North Sea

·      Net 2C resources totaling ~130 million barrels of oil (mmbbls) from  UK 
and Norwegian North Sea (including Skarfjell oil discovery)

 

·      Active North Sea development programme in next 12 months

 

·      Over  the next  12 months,  Cairn expects  to participate  in  multiple 
exploration and appraisal wells in the North Sea 

 

·      Cairn submitted 18  bids in the UK  27^th Licensing Round earlier  this 
year and has participated in the Norwegian Continental Shelf APA 2012  Licence 
Round

 

 

Enquiries to:
Analysts / Investors
Simon Thomson, Chief Executive
Mike Watts, Deputy Chief Executive
Jann Brown, Managing Director and CFO
David Nisbet, Corporate
Affairs                                                                Tel:
0131 475 3000

Media
Patrick Handley, David Litterick
Brunswick Group
LLP                                                                            
Tel: 0207 404 5959

 

 

FINANCE & CORPORATE

 

Cairn held ~US$1.6 bn  in cash and  cash equivalents as  at 30 September  2012 
which will be used to fund ongoing capital expenditure on its  pre-development 
and exploration assets, plus new  business opportunities.  This cash  position 
follows the return of  ~US$3.5 bn to shareholders  in February and April;  the 
net cash  consideration  paid  for Agora  Oil  &  Gas AS  in  May  of  ~US$196 
million(m)* and Nautical Petroleum plc in August of ~US$558 m; and the sale of
an aggregate shareholding of 11.5% in CIL  (3.5% in June and 8% in  September) 
for net proceeds of ~$1.3 bn. Cairn's residual ~10% shareholding in CIL has  a 
current market value of ~US$1.2 bn.   

 

FRONTIER EXPLORATION

 

Cairn continues to seek to re-balance its business to deliver  exploration-led 
growth  by  building   a  series  of   high-impact,  sustainable   exploration 
opportunities, underpinned  by a  cash  flow growth  engine.  The  Company  is 
currently focused  on the  Atlantic Margin,  including Greenland  and  Morocco 
along  with   the  Mediterranean,   as  it   builds  significant   exploration 
opportunities.

Atlantic Margin

 

Greenland

The second phase of Cairn's exploration  programme in Greenland is focused  on 
the Pitu block  which is  located in the  Melville Basin,  off the  North-West 
coast  of   Greenland,   where   there  is   extensive   industry   interest.  
Interpretation of  3D seismic  acquired over  parts of  Pitu in  2011 is  well 
advanced. Depending on the  outcome of the  mapping and technical  evaluation, 
exploration drilling  of  Pitu is  currently  targeted for  2014,  subject  to 
Government of Greenland approval.

Cairn has participated this year  in a joint regional  and shallow (up to  800 
metre) borehole drilling programme in Baffin Bay, operated by Shell on  behalf 
of an industry consortium which includes Conoco Phillips, GdF, Nunaoil, Maersk
and Statoil.  This extensive  core gathering  programme has  now completed  11 
boreholes  and  is  providing  valuable  information  to  help   stratigraphic 
correlations across the undrilled Melville Basin.

In South  Greenland,  where  Cairn  acquired a  3D  seismic  survey  in  2011, 
interpretation of the 3D  seismic is ongoing.   A seabed geochemical  sampling 
survey is completed and  the results are  on their way  to laboratories to  be 
analysed.  Work  is  planned  for  2013  to  find  a  farm-in  partner  before 
considering any further significant activity.

Morocco                                                                                                                                               

This frontier  acreage  is  a  significant  addition  to  Cairn's  exploration 
portfolio and the drilling of one deep water exploration well in the Foum Draa
blocks is targeted for Q4 2013.  These blocks are adjacent to and north of the
Juby Maritime I - III blocks, which Cairn now operates and where a 3D  seismic 
programme is planned for Q4 2012.

Trinidad &
Tobago                                                                                                                          

Cairn and its partner,  Trinity Exploration and  Production, have submitted  a 
bid in the  recent Trinidad & Tobago  licence round (Cairn  - Operator  80%).  
This is  a competitive  licence round  with a  number of  other  international 
companies seeking acreage. Results are expected later in 2012.

Mediterranean
Cairn plans to participate in the  offshore Lebanon bid round, expected to  be 
announced later  this  year with  bids  in 2013.  In  Cyprus, the  company  is 
participating, along with consortium partners, including Marathon Oil Company,
in the current offshore competitive bid round. Awards are expected towards the
end of  2012.   Cairn  also holds  licences in  the Valencia  Basin,  offshore 
Spain.

UK AND NORWEGIAN NORTH SEA EXPLORATION

Over the next 12  months, Cairn expects to  participate in multiple North  Sea 
exploration and appraisal wells.   In seeking to build  on its North Sea  edge 
and prospective block inventory (27 offshore  licences in the UK and  Norway), 
while providing a  portfolio of  lower risk  exploration opportunities,  Cairn 
submitted 18  bids in  the UK  27^th  Licensing Round  earlier this  year  and 
participated in the Norwegian Continental Shelf APA 2012 Licence Round. During
2012, six wells have been drilled and three are currently operating.

UK AND NORWEGIAN NORTH SEA PRE-DEVELOPMENT

 

·      Greater Catcher area (Cairn 30%) The field comprises excellent  quality 
injectite reservoir sands. New  3D seismic data is  being interpreted and,  in 
view of its material  position, Cairn is presently  working very closely  with 
the operator, Premier Oil, and other joint venture partners on the sub-surface
interpretation  and  the  development  concept  selection  process  ahead   of 
submitting a Field Development Plan (FDP).

·      Kraken  development (Cairn  25%) The  Kraken oil  sands are  very  high 
quality reservoirs.  Cairn and the operator, EnQuest, currently estimate gross
2C resources of 160 mmbbls with further appraisal drilling required to  better 
define the field size. A FDP is planned for submission in 2013.

·      Mariner (Cairn 6%) The field  is one of the largest undeveloped  fields 
in the UK North Sea.   It is a heavy oil  field with high well  deliverability 
and the operator,  Statoil, is  working towards Project  Sanction in  2012/13. 
Cairn's interest in  block 9/11 is  6%, but  the Company has  an 80%  operated 
interest in block 9/11c to the south into which Mariner may extend.

 

NOTES TO EDITORS

Cairn Energy PLC

Ø Cairn Energy PLC ("Cairn") is an Edinburgh-based oil and gas exploration and
production company listed on the London Stock Exchange.

Ø "Cairn" where referred to in this release means Cairn Energy PLC and/or  its 
subsidiaries as appropriate.

Ø The current issued share capital of Cairn is 602,417,020.

Ø Cairn currently holds approximately 10% of the issued share capital of Cairn
India Limited (CIL).   Production from CIL's  Rajasthan operations is  175,000 
bopd.

Ø Cairn (including Capricorn) is  run from Edinburgh with operational  offices 
in London, Nuuk, Madrid, Stavanger and Kathmandu.

Cairn in Greenland

Ø Cairn  through  its  subsidiary,  Capricorn,  operates  11  blocks  offshore 
Greenland.

Ø A total  of 14  exploration wells have  been drilled  offshore Greenland  to 
date, five of which were drilled in the  1970s, one in 2000, three in 2010  by 
Cairn and five by Cairn in 2011.

Cairn in North West Europe

Ø Cairn has non-operated and  operated exploration, appraisal and  development 
assets in the UK and Norwegian North Sea.

Cairn in the Mediterranean area

Ø Cairn is in the early stages  of carrying out frontier exploration in  Spain 
and expects to participate in the offshore Lebanon bid round later this year.

Ø Cairn is  participating along with  consortium partners in  the current  bid 
round offshore Cyprus.

Ø Cairn has  exploration interests in  Morocco with drilling  targeted for  Q4 
2013.

Cairn and Corporate Responsibility

Ø Cairn is a signatory to the UN Global Compact and our core values of
respect, responsibility, relationships and our commitments towards people, the
environment and society are enshrined in the Business Principles, which are
available on the Cairn website at
http://www.cairnenergy.com/index.asp?pageid=282.

Ø Cairn's approach to sustainability and performance in accordance with the
Global Reporting Initiative Guidelines is detailed in the annual Corporate
Responsibility (CR) Reports, available at
http://www.cairnenergy.com/index.asp?pageid=279&year=latest

 

For further information on Cairn please see: www.cairnenergy.com

* = total consideration was approximately US$453 m, which included  47,662,603 
ordinary Cairn shares

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
IMSLLFIRISLDLIF -0- Oct/18/2012 06:00 GMT
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