Cairn Energy sets out oil resource for Senegal's SNE field
Having completed a five-well appraisal drilling programme offshore Senegal earlier in the summer, Cairn Energy said it now was targeting production rates of 75,000-125,000 barrels of oil per day with first oil planned 2021-2023.
The FTSE 250 company updated the overall size of the SNE oilfield to a contingent oil resource base of around 563m barrels of oil, with additional recoverable gas resources of more than 1trn cubic feet of gas.
Cairn estimated that it will need to drill up to 25 wells in the initial development phase of SNE, targeting roughly 240m barrels of oil in the lower reservoir.
In the first half of the year, $150m was spent on exploration and appraisal across the portfolio, with $254m cash in the bank as of its 30 June plus an undrawn lending facility.
Looking to other projects, Cairn said $35m of capital expenditure will be needed in 2017 for the 20%-owned Catcher project and another $75m for 29.5%-owned Kraken, both in the North Sea.
Production began at the Kraken in the second quarter with Cairn's share of production seen plateauing around 15,000 bopd next year, while Catcher is targeting first oil before the end of the year and with Cairn expected to get around 10,000 bopd when production hits its straps.
Skarfjell, a 20% working interest project in the North North Sea, is targeting a final investment decision in the first half of next year, with plateau production expected for Cairn of roughly 10,000 bopd.
Cairn owns a 5% stake in Vedanta Limited after the merger of its Cairn India arm in the period, which was valued at $824m at the half-year stage.
Half year results were also reported, though only one week of oil production in the first half of the year from Kraken but no revenue meant turnover of £11m was entirely from royalties due from Petrochina on producing fields in Mongolia, while £28m of operational expenses, plus a £322m boost from the Cairn India/Vedanta investment and dividends, meant a £314m profit before tax was declared.