Cairn Energy revealed today its Senegal activity had come up trumps, while it had also narrowed its losses during its first half of 2016.
The Edinburgh-based oil and gas exploration company revealed a total loss after tax for the six months to June of $38m (£29.4m), an improvement from a $230m loss for the same period the year before and compared with a $516m loss for the full year to December 2015.
Shares are currently up 2.1 per cent at 199.1p, and are also up more than a third compared with where they were this time last year.
What it's important
The economic road has been a bumpy one for a number of sectors recently, but low oil prices have made it a very interesting time for those in the oil industry. Brent Crude, the global benchmark, flirted with highs of $47.87 yesterday but has only recently managed to dig itself out of bear market territory.
From Cairn's point of view, the company identified the price of the black stuff as both a risk and an opportunity, simultaneously driving down industry costs and limiting the amount of funding on other to it.
Cairn Energy struck liquid gold when it started exploring offshore possibilities in Senegal about two years ago, and has since drilled six wells in the area. The discovery, which the company describes as "world class", has increased its 2C oil resources to 473m barrels.
Looking forward, Cairn has recently acquired licences in Norway and Ireland, and its results statement noted it would "continue to actively assess and pursue new ventures within context of balanced portfolio and less competitive environment".
What Cairn Energy said
Simon Thomson, chief executive of Cairn Energy, said:
Drilling is scheduled to re-commence in Senegal shortly, benefiting from lower costs across the sector. The programme contains options for multiple wells and in addition to ongoing appraisal of the SNE field, the Joint Venture continues to assess optimal locations for further exploration drilling on the acreage.
Cairn's exploration and appraisal focus in Senegal is balanced with development assets in the UK, with first oil targeted from both Kraken and Catcher during 2017 and in the meantime Cairn remains fully funded in respect of all of its capital commitments.
Thomson added on a conference call he was pleased with what had been discovered so far and there was "lots still to go in Senegal", while Richard Heaton, exploration director, described the news to date as a "great story".