Cairn Updates on Senegal Drilling

Ahead of its 2016 results on March 8, UK-listed Cairn Energy has given an update on its Senegal drilling campaign and UK developments.

It said January 17 that a third phase of drilling offshore Senegal will start late this month with further evaluation of SNE, a largely oil discovery but with gas bearing sands. The SNE-5 and SNE- 6 wells are to be drilled in the south of the SNE structure with the aim of providing key connectivity and deliverability data from upper reservoirs by conducting well tests, said Cairn.

Cairn is operator with 40%, Australian independent FAR 15% and Senegal’s state Petrosen 10%. The other 35% is pending a sale by ConocoPhillips to Australia’s Woodside that has hit a snag. FAR CEO Cath Norman said December 1 it believes a valid pre-emptive rights notice was not issued by Conoco to its partners. She said FAR has invoked its rights in this regard, adding she was unaware that Senegal had approved the Woodside deal.

FAR’s Norman noted that Cairn, which has drilled six successful wells off Senegal, estimates SNE can break even at an oil price of $35/b. 

In the UK North Sea, Cairn said that the Kraken field is on schedule for first oil in 2Q 2017, with the Catcher field following in 2H2017. Cairn’s interests are 29.5% and 20% respectively; it expects aggregate peak net production of 25,000 boe/d. It expects a final decision on developing the Skarfjell field this quarter.

Cairn also said it is continuing arbitration proceedings against India to recover its 10% stake in Cairn India, worth an estimated $1bn.

Separately, Tullow said January 17 its Erut-1 well in Block 13T, northern Kenya, has discovered a gross oil interval of 55 metres, with 25 metres of net oil pay. Tullow has a 50% operating interest, partnered by Africa Oil Corporation and Maersk Oil, each with 25%

Mark Smedley