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Cairn Energy releases 1H19 results

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Oilfield Technology,

Cairn Energy has announced its results for 1H19.

Simon Thomson, Chief Executive, Cairn Energy PLC said: "As a full cycle E&P business Cairn has seen good progress in the first half of 2019 with the opportunity to develop and deliver multiple catalysts for future growth. Production performance from our North Sea assets is ahead of expectations, delivering significant cash flow to reinvest in the portfolio. The SNE development in Senegal, where FID is expected in H2, remains on schedule for first oil in 2022. Our drilling programme is about to commence offshore Mexico, where Cairn has built a material footprint in one of the world’s most prolific basins. Recent portfolio acreage additions provide line of sight to future high potential exploration prospects."

1H19 summary

  • Combined net oil and gas production ahead of 2019 guidance at approximately 23 700 boe/d (+15% v previous six months).
  • Oil and gas sales revenue US$257 million, average realised price US$68/boe; average production cost US$17/boe.
  • Net cash inflow from oil and gas production US$177 million.
  • Capital expenditure: cash outflow US$135 milliom (US$14 million of tax refund receivable).
  • Group cash at 30 June 2019 US$58 million; US$60 million drawn under US$575 million RBL facility.

2019 outlook

  • Full year oil production guidance: upgraded to 21 000 – 23 000 bpd from 19 000 – 22 000 bpd; average production cost reduced from US$20/boe to ~US$18/boe.
  • Full year forecast CAPEX US$295 million; Exploration & Appraisal US$165 million (net of tax refund), Development & Production US$130 million.
  • Portfolio Management: agreed to farm down 15% WI in Chimera to DNO, agreement with ENI to swap 15% WI in Block 10 Mexico and agreed sale of 10% WI in Nova development to ONE-Dyas.
  • Senegal: SNE field development (Cairn 40% WI) major contracts awarded. JV progressing towards FID in 2H19, targeting first oil in 2022.
  • Mexico: two operated wells Block 9 (Cairn 50% WI) to be drilled in Q3 and Q4: two non-operated wells on Block 7 (Cairn 30% WI) and Block 10 (Cairn 15% WI) to commence in H2 2019.
  • UK and Norway: Drilling about to commence on Chimera (Cairn 45% WI) exploration well.

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