Cairn Energy PLC (LON: CNE) have announced the sale of their Norwegian operations to Solveig Gas in an update to shareholders on Wednesday.
Cairn Energy PLC is one of Europe’s leading independent oil and gas exploration and development companies.
Shares of Cairn Energy are trading at 180p (-0.17%). 27/11/19 13:27BST.
Cairn received a double blow at the end of October when they were hit with legal battles with the Indian government, which caused shares to dip.
The sale was announced for a fee of $100 million, which will also mean that Cairn Energy will exit operations and business in Norway.
The sale will allow Cairn to reduce its committees exploration and development spending by around $100 million.
The proceeds of the sale will be reinvested into existing operations, Cairn added.
Chief Executive Simon Thomson said: “This is a further attractive transaction for Cairn shareholders in line with our consistent strategy to realise value and redeploy capital within our portfolio.
“We continue to have a material business in the UK North Sea where the production performance of the Kraken and Catcher assets remains strong. We wish all of the team in Stavanger every success in the future.”
FTSE250 (INDEXFTSE: MCX) listed Cairn has assets in the Americas, Africa, and the UK, including the producing Catcher and Kraken fields in the North Sea.
The deal is expected to be completed by early 2020 and remain subject to written consent by the Norwegian Ministry of Petroleum and Energy, partner and third-party approvals.
This is an interesting move by Cairn, and the exiting of these Norwegian operations doesn’t seem to have worried shareholders as much as expected.
The energy market is becoming increasingly tough to trade in as reputable names such as Shell (LON: RDSA) have seen a slip in their third quarter profits amid volatile oil prices.
Additionally, smaller names such as i3 Energy (LON: I3E) and AFC Energy (LON: AFC) have seen their shares crash in the last week.
