Cairn soars on second Senegal oil discovery

Oil explorer Cairn Energy has unveiled its second “significant” discovery within a month off the coast of West Africa, sending shares in the Edinburgh-based firm soaring today.

The company said initial analysis of the SNE-1 well, off Senegal, showed the find could contain between 150 million and 670 million barrels of recoverable reserves.

Chief executive Simon Thomson said: “This is a significant oil find for Cairn and Senegal and based on preliminary estimates is a commercial discovery and opens a new basin on the Atlantic Margin.

He added: “Cairn has additional prospects and leads that offer further exploration potential across this large acreage position in West Africa.”

The discovery came a month after Cairn – which has a 40 per cent interest in three blocks off the coast of Senegal – struck oil at the FAN-1 exploration well. Initial gross estimates for that well ranged from 250 million to 2.5 billion barrels.

Cairn and its partners in Senegal – ConocoPhillips, FAR and Petrosen – are planning follow-up activity in the region next year.

Analysts at SP Angel said the latest find “marks the return to form for Cairn’s team from a period when it seemed as if they couldn’t hit a barn door from six feet”, and shares in the firm ended the day up 19.1p, or 12 per cent, at 177p.

In August, Cairn said it was planning to cut jobs to keep costs under control after telling investors it wants to reduce exposure to controversial drilling activity in the Arctic, where its activities have been criticised by environmental campaigners.

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