The FTSE-250 firm said that government and third-party approvals required for the sale to Australian firm Woodside Energy had been received. Completion of the deal is expected to take place before the end of the year.
Cairn will receive some $525m in cash, comprising $300m from the sale and a further $225m payment to reimburse it for expenditure related to the assets since 1 January.
The group will also receive an additional payment of up to $100m if certain conditions are met relating to the date of first production from the Sangomar development and the prevailing oil price at that time.
As a result, Cairn will pay shareholders a special dividend of 32p per ordinary share on 25 January, amounting to a return of about $250m.
In September, the group gave an upbeat outlook despite posting hefty first-half losses.
It booked a loss of $324m for the period after it was hit by a $240m impairment charge, largely relating to its assets in Senegal. There was a charge of $33m made against Cairn’s UK producing assets.
However, the firm said it had safely navigated the coronavirus crisis and lower oil prices and was well placed to generate future growth.
Chief executive Simon Thomson said at the time: “We have successfully managed the business through a challenging external environment, always ensuring that the safety of our people is paramount.
“We took early action with significant reductions and deferrals to the capital programme. Alongside the sale of interests in both Norway and Senegal, we have realigned the portfolio and demonstrated Cairn’s continued commitment to shareholder returns.
“With a strong net cash position and limited capital commitments, Cairn is well positioned to deliver further value for shareholders.”
It reported an average net production output of 22,400 barrels per day, at the top end of its full-year guidance.
Barclays analyst James Hosie said: “Cairn’s financial performance was ahead of Barclays’ forecasts due to higher price realisations, and the pending sale of its Senegal portfolio is set to further strengthen the already debt-free balance sheet.”