Cairn Energy swings to profit as North Sea fields begin production

Courtney Goldsmith
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Oil Rigs In The Cromarty Firth Awaiting Decommission
Cairn owns interests in the Catcher and Kraken North Sea projects (Source: Getty)

Oil and gas explorer Cairn Energy swung to profit in 2017 as its North Sea projects began pumping out the black stuff.

The figures

Cairn's pre-tax profit climbed to $256.4m (£184.7m) for the full year, up from a loss of $151.5m the previous year, on revenues of $33.3m. Shares in the firm rose 1.8 per cent to 214.6p on the news.

For 2018, the company expects to spend around $140m on developing its Kraken and Catcher North Sea fields to ramp up production.

Read more: Cairn Energy boosts its boss's pay but slashes long-term incentives

Why it's interesting

Together, Catcher and Kraken are expected to produce between 17,000 and 20,000 barrels of oil per day (bopd) net to Cairn in 2018, with ongoing project commissioning on both fields expected to be completed in the first half of the year.

Cairn also made progress on its flagship discovery offshore Senegal last year. Following the successful drilling of five appraisal wells, the discovery is now in the early development phase. Cairn is initially targeting a production rate of around 100,000 bopd, and first oil is expected between 2021 and 2023.

In the year ahead, analysts at Davy said Cairn is ready to enter a "new phase" of growth through additional ventures and exploration.

Throughout 2017, the firm acquired licences in Mexico, offshore Suriname and in the North Sea, which it will continue to develop.

What Cairn Energy said

Simon Thomson, the chief executive of Cairn Energy said:

The company continues to maintain balance sheet strength and financial flexibility as we focus on creating, adding and realising value for shareholders from a portfolio of attractive exploration, development and production assets."

Read more: Cairn Energy swings to profit as its North Sea field Kraken produces oil

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