Cairn Energy, the Scottish oil and gas titan which has blown a fortune in a largely fruitless search for oil and gas off the coast of Greenland, has posted a small first quarter loss.
In a statement the company said: "In the first quarter, the group held no oil and gas producing assets and generated modest operating losses as a result of new business activities and administrative expenses."
The cash rich company, which recently bought up North Sea operator Agora Oil & Gas, is currently participating in three wells in the UK Continental Shelf. Operations have begun on the Carnaby exploration well in the UK Central North Sea block 28/9, in which Agora holds a 15% stake. The well is expected to complete in the current quarter.
Start your trial of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
At the Skarfjell well, the estimated preliminary resource range is between 60 and 160m barrels of recoverable oil after the well found very good quality reservoir sandstone containing light oil over 168 metres gross interval. Cairn's 20% owned Cladhan South well was plugged and abandoned after no clear evidence of hydrocarbons was seen, while the Timon well, in which Cairn holds a 25% stake, has begun drilling and is expected to complete in June.
Latest Videos FromMoneyWeek
Looking at other regions, production at the Rajasthan site, operated by Cairn India and in which Cairn has a 22% interest, has reached a significant milestone of 175,000 barrels of oil per day, and has the potential to reach production levels of 300,000 a day. The potential resource for the block is now estimated at 7.3bn barrels of oil equivalent, up from 6.5bn.
Cairn is currently in the early stages of carrying out frontier exploration in Spain and also expects to participate in the offshore Lebanon bid round, expected later this year.
In Greenland, the first phase of Cairn's pioneering exploration activity has confirmed that the necessary geological elements for success are present across what the company called "the Greenlandic basins", and "all the necessary ingredients for a potential discovery have been encountered". The second exploration phase will be at reduced equity levels with financial exposure shared among partners.
"We will continue to use our considerable financial flexibility to access new opportunities that have a good strategic and commercial fit with the business to deliver future growth," the company said.
NR
