Cairn Energy’s collaboration with two of the North Sea’s largest independent oil operators has paid off as the company returns to profit and prepares for a new phase of growth.
The Edinburgh-based group holds a fifth of Premier Oil’s new Catcher project and a 29.5pc stake in Enquest’s Kraken project, both of which began producing their first oil late last year.
The two North Sea projects, neither of which are operated by Cairn, will add between 17,000 to 20,000 barrels of oil a day to the group’s portfolio this year.
The fresh oil flows combined with rising oil prices are expected to build momentum behind the company’s growth as it bounces back into the black with a pre-tax profit of $256.4m for 2017 from a loss of $151.5m the year before.
Cairn ended the year with just $86m of cash, but left its $200m reserve based lending facility undrawn.
Although the full-year results offered shareholders little new information on the company’s activities, the report underlines a step-change for the company following the North Sea start-ups.
Simon Thomson, Cairn’s chief executive, said the group’s revived health is the result of a five year rebalancing programme to create a pipeline of projects through exploration, development and production phases.