Scottish oil and gas exploration firm Cairn Energy posted a massive $372.6 million half-year loss following a major write-down on the value of its Indian interests.
The Edinburgh company racked up an operating loss of $107.7m in six months to June 30 up from $76.7m a year earlier but was forced to swallow a $267.5m impairment on the value of its remaining 10.3% minority interest in Cairn India.
The loss was partially offset against a $153.5m tax credit received by the company in the period, meaning the total loss was $219.1m.
The half-year result was more than a quarter of a billion dollars worse than the $37.1m profit posted by Cairn in the same period last year.
Among the costs the group racked up was $49.2m related to unsuccessful exploration activity and $22.4m of an impairment on the value of its oil and gas assets.
The company also saw its administrative expenses climb by $5.8m in the period.
Despite the widening loss, Cairn said it was readying itself to begin an extensive 12-month exploration campaign with two rigs on contract.
The firm said it had 62 prospects and 144 leads identified in two main basins the first Atlantic margin frontier comprising operations across Morocco, Senegal, Greenland, Ireland, Mauritania and Spain while the second being its more mature operations in the North Sea.
The company sold off its 6% interest in the Mariner Field during the period and completed the $16m acquisition of 20% interests in two Premier Oil licences close to the Skarfjell discovery, where appraisal activity will continue in the third quarter of the year to confirm reserves estimated between 83m and 163m barrels of oil.
The firm’s Frode and Timon wells were plugged and abandoned after no hydrocarbons were found but oil was discovered at Kraken and in ‘excellent quality reservoirs’ at Catcher and Cairn said field development plans were being progressed in both cases.
In the Atlantic margin, Cairn said it had farmed in to three blocks in Senegal and a further play in Mauritania during the period while also taking over as operator at Porcupine Basin west of Ireland.
The company also confirmed it intended to drill the controversial Pitu prospect offshore Greenland an acreage estimated to have reserves in excess of three billion barrels of oil equivalent (boe) in the second half of 2014.
Cairn said it remained well funded with net cash of $1.5bn held at June 30, in addition to its residual $1bn stake in Cairn India.
Chief executive Simon Thomson said Cairn’s exploration programme offered “material growth potential” for the firm.
He said: “Cairn commences a 12-month multi-well high impact frontier exploration programme in September that will offer shareholders sustained exposure to material growth potential.
“The drilling programme targets a combined unrisked resource (in excess) of four billion boe, across a variety of plays and countries with follow on potential.
“The programme will be delivered against a backdrop of balance sheet strength and an establish North Sea exploration, appraisal and development position.”