Shares in Cairn Energy jumped around nine per cent this morning as the oil and gas explorer returned to profit in the first half of the year after its Kraken field in the North Sea produced its first oil.
Cairn revealed a pre-tax profit of $312.8m for the half-year after making a loss of $57m the previous year.
The Edinburgh-based firm generated a revenue of $10.8m for the six months to the end of June compared with no revenue last year due to royalty payments from oil and gas firm Petrochina on producing fields in Mongolia. No revenue was recognised in the period in relation to Kraken production.
Shares in the FTSE 250 company were up 2.53 per cent at 178.3p in afternoon trading.
Why it's interesting
Cairn has a 29.5 per cent working interest in the Kraken oil field, which is operated by EnQuest and is one of the largest projects in the North Sea to come on-stream in a decade.
Catcher, another North Sea development that's operated by Premier Oil, is expected to start producing by the end of 2017. Cairn has a 20 per cent stake in the Catcher field.
The company's "world class" discovery in Senegal is progressing with Cairn targeting 75,000 to 125,000 barrels of oil per day with first oil planned for between 2021 and 2023. Cairn will transfer operatorship of the field to energy firm Woodside next year.
The company has continued to stack up new opportunities by acquiring new licences in Norway, Ireland and Mexico this year with drilling expected in 2018-2020.
What Cairn Energy said
Simon Thomson, chief executive, said Cairn is poised to create value for shareholders with a strong balance sheet and imminent cashflows.
Cairn continues to deliver strong progress across the business.
In the North Sea, Kraken has commenced production and Catcher is scheduled for first oil later this year. In Senegal, planning work has commenced on the phased development of the world class SNE field.
Cairn has also added to its exploration portfolio with exciting new opportunities in Norway, Ireland and Mexico creating additional drilling prospects in the near term.