Cairn Energy offloads Norway operation Capricorn Norge for $100m

Cairn Energy had entered into an agreement to dispose of the entire share capital of Capricorn Norge, its wholly-owned subsidiary in Norway, it announced on Wednesday.

The FTSE 250 company said that, with effect from 1 January, Solveig Gas Norway would acquire all of the shares in Capricorn Norge by paying $100m (£77.92m), plus customary working capital adjustments on completion, including an adjustment for the tax receivable related to historical exploration activity.

Following the transaction, Cairn would have disposed of all of its assets in Norway, and would reduce its committed exploration and development capital expenditure by around $100m.

The firm said it would use the proceeds of the transaction to fund its ongoing business.

“This is a further attractive transaction for Cairn shareholders in line with our consistent strategy to realise value and redeploy capital within our portfolio,” said chief executive officer Simon Thomson.

“We continue to have a material business in the UK North Sea where production performance of the Kraken and Catcher assets remains strong.

“We wish all of the team in Stavanger every success in the future.”

The company said the transaction was expected to complete in early 2020, and remained subject to written consent by the Norwegian Ministry of Petroleum and Energy, partner and third-party approvals.

It said the gross asset value of the interests being transferred, as per its half-year report issued on 10 September, was $207.4m, while the net asset value was $80.1m.

Capricorn Norge made a loss of $6.5m for the period ended 30 June.

Source: ShareCast