Cairn Energy cashes in with £184m sale
Cairn Energy, the Ed inburgh oil and gas explorer and producer, is to return $250 million (£184m) to shareholders after selling off its Senegalese assets.
The FTSE-250 firm said that government and third-party approvals required for the sale to Australian firm Woodside Energy had been received. Completion of the deal is expected to take place before the end of the year.
Cairn will receive some $525 min cash –$300 m from the sale and a further $225m payment to reimburse it for expenditure related to the assets since 1 January.
The group will also receive an additional payment of up to $100m if certain conditions are met relating to the date of first production from the Sangomar development and the oil price at that time.
As a result, Cairn will pay shareholders a special dividend of 32 pp er ordinary share on January 25, amounting to a return of about $250m.
In September, it gave an upbeat outlook despite posting hefty first-half losses.
It booked a loss of $324m for the period after it was hit by a $240m impairment charge, largely relating to its assets in Senegal. There was a charge of $33m made against Cairn’s UK producing assets.
However, the firm said it had safely navigated the coronavirus crisis and lower oil prices and was well placed to generate future growth.
Chief executive Simon Thomson said at the time: “We have managed the business through a challenging external environment, always ensuring that the safety of our people is paramount. We took early action with significant reductions and deferrals to the capital programme.”