Cairn Energy narrows losses as it upgrades Senegal oil discovery

Oil and gas firm Cairn Energy sharply narrowed its losses in the first six months of its year as it took advantage of lighter exploration costs and lower asset charges. The Edinburgh-based firm reported a first-half net loss of $37.8m (£29.3m), compared with a loss of $230.3m in the same period a year ago.

Exploration costs totalled $33.8m in the period compared with $46.4m.

The FTSE 250 firm added that its 10% stake in its Asian holding, Cairn India, at the end of June was worth $383m, largely unchanged from the end of December, "thus no further impairment arises".

Cairn Energy is embroiled in a $5.6bn tax dispute with the Indian government over the valuation of assets in the country.

It also raised its best estimate of reserves at its oilfields off the coast of Senegal by almost a third by 473 million barrels, following successful appraisal of its SNE-4 test well earlier this year.

The group added that it estimated its total reserves in its Senegal fields was now more than 2.7 billion barrels, with further exploration potential of about 500 million barrels in the region.

Cairn Energy chief executive Simon Thomson said: "Drilling is scheduled to re-commence in Senegal shortly, benefiting from lower costs across the sector. The programme contains options for multiple wells and in addition to ongoing appraisal of the SNE field."