Cairn Energy losses mount in face of high drilling costs

Guy Bentley
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Oil explorer Cairn Energy has reported a loss before tax of $1bn (£600m) significantly higher than last year's $194m.

The board also agreed to suspend its share buy-back programme until the position with regard to the shareholding in Cairn India is resolved. The company expanded on why a well located off Morocco had been plugged and abandoned.

The FD-1 exploration well was located approximately 120km offshore Morocco in the Foum Draa block. The well was seeking to exploit a late Jurassic/Early Cretaceous deep-water turbidite slope fan and channel complex. However, the well did not encounter clastic reservoirs.

Simon Thomson, chief executive, said:

Cairn has an active drilling programme in 2014 that is complemented and balanced by its sustainable development and production portfolio.

The strategy continues to focus on an attractive mix of frontier and mature basin exploration. By building a growing prospect and lead inventory, from which to select and high grade prospects for drilling, we aim to offer shareholders material potential growth opportunities over the long term.