CAIRN Energy has sold its main New Zealand oilfield interests for
#1.7m to the local companies which originally developed the area.
Its 13.5% share in the Ngatoro field, which produces a total of 800
barrels of oil per day, was sold in a purely cash deal to Petrocorp
Exploration and Southern Petroleum (Ohanga).
''Basically we were made an offer that was too high to refuse,
ironically by the people who made the first drilling in the area but
then decided that there was no enough oil for viable production,'' Cairn
chief executive Bill Gammell said yesterday.
He also pointed out that expansion elsewhere has meant that the assets
involved are far less material than previously as the Edinburgh-based
company's market capitalisation has soared from #6m last year to almost
#40m currently.
''The money will be used to develop our new Teredo business,'' Mr
Gammell said, adding that Cairn will retain a small presence in the
onshore New Zealand oilfield at Taranaki.
Higher gas prices and the stronger dollar pushed Cairn firmly back
into half-year profit -- #641,000 -- after reporting #161,000 in losses
last time.
The #8.5m purchase in March of Teredo Petroleum, which has a strong
presence in the UK and Spain, fits well with Cairn's aim of increasing
its production base in Europe.
Its pioneering use of horizontal drainhole techniques onshore has also
raised the potential production of a number of fields, and the success
of the Marismas exploration wells in southern Spain has increased
expectations of the eventual reserves estimate.
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