Edinburgh-based oil and gas explorer Cairn Energy said it is entering 2019 with a robust balance sheet as it eyes “significant” growth opportunities.
The firm commented in a trading update ahead of unveiling its 2018 results on 12 March, and said combined production averaged about 17,500 barrels of oil equivalent per day (boepd) net from the Catcher and Kraken fields in the North Sea.
Chief executive Simon Thomson said: “Cairn enters 2019 with balance sheet strength and cash flow from North Sea production to fund significant growth opportunities.”
Catcher averaged 43,000 boepd gross last year and Kraken 30,300. Full-year production, net to Cairn, is estimated to be 19,000 to 22,000 boepd for 2019. The company noted that oil and gas sales revenue for the year came in at $395 million (£306m) with the average sales price $68 per barrel.
It also looked at its developments, saying that in Senegal, the SNE field development is on track with the final investment decision targeted for mid-2019.
Also on track is the Nova field development in the Norwegian North Sea, with all key development contracts awarded and execution activities under way. It is expected to deliver first oil from 2021 with peak production of 50,000 barrels of oil per day (bopd).
As for the UK, project sanction is targeted in 2019 for the near-field Catcher discoveries identified as potential subsea tie-backs to maintain and extend plateau production. Further evaluation of the development options for the Agar discovery is being carried out in the first half of this year to establish commerciality of the discovery and broader exploration potential.
Thomson said: “The SNE and Nova development projects are progressing on track, evaluation of the recent Agar discovery is ongoing, and we look forward to commencing a material exploration drilling programme in 2019 with up to seven wells offshore Mexico, the UK and Norway targeting a total gross volume in excess of one billion barrels.
“We also expect a final international arbitration decision on our India claim in the near term and we remain confident of our position.”
The firm has been locked in a long-running tax dispute with the Indian government relating to former subsidiary Cairn India – and is seeking compensation of about $1.4 billion. “Even a percentage of the $1.4bn outlined would be a boon to the company,” said SP Angel.