Cairn Energy suspends share buy back initiative

Scottish exploration firm Cairn Energy has suspended a $300m (€216m) share buyback programme, in which it has invested $95m.

The company, which last year bought into two Porcupine Basin-based assets held by Providence Resources, said yesterday it remains unable to sell its 10% stake in its Cairn India subsidiary; the money from which was earmarked for use in the share repurchase.

Cairn has already bought 25.2m shares and invested $95m, but is suspending the programme until the position regarding Cairn India and “interactions” with India’s tax authorities are resolved. Cairn said it remains committed to its planned drilling operations for this year — part of which will be the drilling at Spanish Point, off the west coast.

Cairn also published its 2013 annual results; which showed pre-tax losses rising from just over $194m in 2012, to just above the $1bn mark. Operating losses jumped from $247.3m to $879.1m.

Management said the firm’s existing portfolio provides “many opportunities”, with the allocation of capital for the drilling programme beyond this year already also being looked at closely.

Capital availability will, largely, depend on overall exploration success and the conclusion of debt facility talks regarding its two big North Sea projects.