Aside from minor adjustments to the portfolio, the picture remains frustratingly similar for Cairn Energy (CNE) investors following half-year results: no final investment decision on the SNE field in Senegal or update on the India arbitration.
However, the company has increased its full-year production guidance range from 19,000-22,000 barrels of oil per day (bopd) to 21,000-23,000 bopd, at a 10 per cent lower cost of $18 (£14.60) per barrel of oil equivalent. The first half was also a success compared with a year ago, with production and sales up and costs down, and consistent production and the lack of any major impairments taking it into the black.
Adjustments to the portfolio came in the form of a further 15 per cent farm-down at Chimera in the North Sea, an equity swap with Eni in Mexico and the sale of 10 per cent of the Nova development in Norway.
Exploration and development progress was poor in the half. Cairn hit an unsuccessful well in Norway in the period, with another two confirmed as dry in July and August. BMO analyst David Round said investors were being friendly to Cairn. “Cairn’s shares have held up well despite Brent weakness, Kraken reserves, Cairn India delays and disappointing exploration,” he said.
Consensus forecasts compiled by Bloomberg put full-year EPS at 8.8¢ and cash profit at $271m, and 9.9¢ and $234m in 2020.
CAIRN ENERGY (CNE) | ||||
ORD PRICE: | 194p | MARKET VALUE: | £1.14bn | |
TOUCH: | 194-195p | 12-MONTH HIGH: | 238p | 138p |
DIVIDEND YIELD: | na | PE RATIO: | na | |
NET ASSET VALUE: | 244¢* | NET DEBT: | 0.2%** |
Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
2018 | 182 | -603 | -86.2 | - |
2019 | 270 | 43.4 | 11.4 | - |
% change | +48 | - | - | - |
Ex-div: | na | |||
Payment: | na | |||
£1=$1.23 *Includes intangible assets of $793m, or 135¢ a share **Excludes lease liabilities of $303m |