Oil firm Cairn Energy loses $600 million

Scottish firm hit by production delays

Oil and gas exploration firm Cairn Energy reported a loss of more than $600 million in the first half of the year as the Kraken development in the North Sea was hit by disruptions.

For the six months to June 30 the Edinburgh-based firm made a pre-tax loss of $602.9m compared with a profit of $77.7m a year earlier.

Cairn owns 29.5% of Kraken, which is operated by EnQuest. The average production during the half-year came in at 30,7000 barrels a day, weighed down by disruptions owing to downtime and other factors. It said production had improved to between 35,000 and 40,000 barrels a day in August.

The company also recorded a loss on the “derecognition of financial assets” of $230.8m during the period.

The firm’s operating loss was recorded as $34.5m.

Cairn chief executive Simon Thomson said: “Cash flow from the North Sea is now established and development projects in Senegal and Norway are well advanced to support the production base over the long term.

“We are also delighted to have enhanced our exploration portfolio with potentially high impact opportunities across frontier and emerging basins.

“This additional acreage supplements our existing active programmes in the UK, Norway and Mexico.

“This continued strategic delivery, together with our strong balance sheet, ensures Cairn remains well-positioned to access material value growth potential.”

Shares in Cairn Energy fell 6.2p to close at 226p.

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Strategic delivery and our strong balance sheet ensures Cairn remains well positioned. SIMON THOMSON, CHIEF EXECUTIVE, CAIRN ENERGY