Senegal discovery boosts Cairn

 
Joseph Millis
SCOTLAND-based oil and gas explorer Cairn Energy yesterday announced a second oil discovery off the coast of Senegal in West Africa.

The company described the find as “significant”, adding that the oil was of high quality.

Shares in the company soared 12.1 per cent on the news, to close at 177p.

The discovery was made at its SNE-1 well in the Sangomar Deep block about 100km offshore.

According to Cairn’s preliminary estimates, the well could hold between 150m and 670m barrels of recoverable resources.

Last month, the company announced it had found oil at the nearby Fan-1 well.

Cairn has a 40 per cent working interest in Sangomar and two other blocks in the area.

Stakes are also held by ConocoPhillips (35 per cent), FAR (15 per cent) and Petrosen (10 per cent).

Cairn said further evaluation of this zone was continuing, and that the deeper target of karstified and fractured Lower Cretaceous shelf carbonates was yet to be reached.

Cairn 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.

“On completion of the SNE-1 well, the joint venture along with the authorities in Senegal will evaluate all of the information to understand how best to take forward these basin opening discoveries with an appraisal drilling programme in 2015. Cairn has additional prospects and leads that offer further exploration potential across this large acreage position in West Africa.”

Analysts said the two successful oil discoveries could provide Cairn with an option to sell parts of its 40 per cent stake to raise cash for its 2015 exploration work in north west Europe and Morocco.