Cairn Energy PLC (LON:CNE) have swung to a profit in their recently ended financial year – which rounds of an excellent year for the firm.
The oil exploration firm noted that its’ strong production performance drove the update published today.
Cairn said that their pretax profit totaled $119.5 million across 2019 – this sees a massive improvement on the loss of $1.21 billion posted in 2018.
Looking at revenue, this also rose from $410.3 million to $533.4 million – which should certainly spark investor confidence.
Across 2018 – the FTSE 250 listed firm noted that it expects net production to be between 19,000 and 23,000 barrels of oil per day in 2020.
Simon Thomson, Chief Executive Officer, Cairn Energy PLC said:
“Cairn’s strong operational performance in 2019 was delivered through production and cash flow generation at the top end of guidance and the Group ended the year with an increased net cash position and undrawn debt facilities.
A significant milestone was achieved in Senegal with a Final Investment Decision taken for the Sangomar development. Reserve additions were made in both Senegal and the North Sea and the Company encountered exploration success alongside Eni in Mexico.
The sale of Cairn’s Norwegian business, combined with exits from exploration positions in Ireland and Nicaragua, demonstrate continued focus on capital allocation as the company seeks to generate further value for shareholders on a sustainable basis.”
Cairns’ production figures
In January, Cairn Energy told the market that it had reached the upper end of production guidance.
The firm said that 2019 production in the Catcher and Kraken fields in the North Sea averaged 23,000 barrels of oil per day, at the upper end of the 21,000 barrel to 23,000 barrel per day guidance.
Early in 2019, Cairn had guided for between 19,000 barrels to 22,000 barrels per day – however this was comfortably passed.
Production across 2019 rose by 31% on a year on year basis, and notably Cairn hold a 20% interest in the Catch field tied with roughly 30% in Kraken.
Oil and gas revenue for the year was $504 million, at an average price of $64.52 a barrel. This revenue figure is 27% higher than in 2018, though the realised price was over 5% less.
Looking at capital expenditure for 2019, the firm reported a total figure of $245 million, and speculated $595 million of capex in 2020.
Cairn added that they expect to be spending $135 million on exploration and appraisal within the next year.
Senior Board change
In a separate announcement today, Cairn said that Erik B. Daugbjerg would be appointed as an independent non-executive director with effect from 14 May 2020.
Cairn noted that Todd Hunt is set to retire as a non-executive director immediately following the Company’s Annual General Meeting.
Ian Tyler, Chairman of Cairn, said:
“I am delighted to welcome Erik Daugbjerg to the Cairn Board. Erik’s many years of experience in the oil and gas industry, together with a strong background in business development and corporate transactions will be an important asset to the Board. We look forward to working with Erik as the Company continues to deliver on its strategic objectives.
On behalf of the Board, I would also like to thank Todd Hunt for his valuable contribution as a non-executive director over a number of years.”
Shares in Cairn Energy trade at 86p (+1.58%). 10/3/20 10:29BST.