Cairn Energy Plc announces exploration campaign estimated to 400 million dollars

Cairn Energy Plc announced that it plans to spud nine exploration wells by the end of 2014. This is a part of the companys exploration campaign estimated to 400 million dollars, which is expected to make 2014 the busiest year for Cairn Energy in the last ten years.

The companys Chief Executive Officer Simon Thomson revealed that the exploration program in question would provide the companys investors with exposure to “material growth potential” together with mature basin development, “all against a backdrop of continued balance sheet strength”. Morgan Stanleys Jamie Maddock commented that this campaign could be “potentially transformational” for the oil explorer.

Cairn Energy Plc gained its popularity after a huge oil discovery in Rajasthan, however, its reputation for exploration success began to fade after its failure to find commercial quantities of oil off the coast of Greenland in spite of spending 1 billion dollars. Now the company hopes to bring back its former glory and profits betting on ambitious drilling campaign in the Atlantic Margin, which is believed to treasure literally huge oil potential.

Cairn will spud one well off the coast of Morocco, which over the last few months has become very attractive for some large oil companies such as BP and Chevron. The company also plans to drill two offshore wells in Senegal and one off the coast of Ireland. The companys partner Kosmos Energy is drilling a well in Morocco, where Cairn is also expected to take part.

Cairn Energy Plc also announced that it is in process of planning four exploration and appraisal wells located in the North Sea as well – in Tulla, Atlas, Aragon and west of Kraken. The region to the east of Skarfjell is also believed by the company to have significant potential.

One of the spokesmen of the company said that the companys balance sheet would finance the nine planned wells. The company reported it had net cash of 1.25 billion dollars at the end of 2013, and its remaining 10% stake in Cairn India is estimated to about 1 billion dollars. Cairn Energy Plc also hopes that two of its big North Sea Developments – Kraken and Chatcher – will boost it with some cash when they become operational in the next couple of years.

Cairn Energy Plcs shares lost 0.52% by 12:08 GMT on Tuesday and traded at GBP265.300. Prices held in a daily range between GBP264.500 and GBP268.000. The one-year rate of return is down 6.69%.