Cairn Energy reveals strong year-end cash position

Cairn Energy painted itself in a strong cash position on Tuesday, as it updated the market on its operations in the 2015 calendar year.

The FTSE 250 group reported $603m (£434m) net cash at the end of the period, and said its reserve-based lending facility remained undrawn. Debt availability to fund UK development assets was also increasing with project progress, and was expected to reach $335m at peak and $260m by 2017. An additional $175m was available in letters of credit, Cairn confirmed.

At year-end, Cairn had a total of 49.5 million barrels of oil equivalent booked as 2P reserves, and 196.5 million barrels of oil equivalent booked as 2C contingent resources.

"We are delighted with the results to date of our multi-well evaluation programme offshore Senegal, which has confirmed the scale and extent of the significant resource base in this world class asset," said Cairn Energy chief executive Simon Thomson.

"Cairn's 2C current resource estimate for the SNE field has gone up by 20 percent and the positive results of the latest appraisal well provide the potential to further increase the size of the SNE field.

"A combination of financial strength and continued exposure to material growth opportunities leaves Cairn well-placed to deliver additional value for shareholders from its balanced portfolio," he added.

Additionally, the group confirmed its Catcher and Kraken developments in the UK North Sea were on track for first oil from 2017. Cairn had acquired a further 4.5% interest in Kraken since year end, bringing its total working interest to 29.5%.

Cairn also said international arbitration proceedings had commenced to settle its tax dispute with Indian authorities, and was claiming full compensation for the $1bn of value it alleged shareholders had been deprived of.