CAIRN Energy, the Scottish oil and gas operator, said yesterday it had completed a placing of more than 6.5million new shares with institutional investors.
It said gross proceeds would be £116.1million and the new shares being issued would represent an increase of about 5% in Cairn’s issued ordinary share capital.
The company said it believed it was both sensible and prudent to strengthen its equity-capital base to maintain flexibility across all of Cairn’s operations both in relation to the Rajasthan development in north-west India and its exploration position in Greenland.
Cairn added that with worldwide rig rates on a downward trend, and the availability of rigs suitable for Arctic drilling on the increase, it was keen to ensure it was in a position to preserve the option to accelerate its exploration drilling plans in Greenland.
Chief executive Sir Bill Gammell said: “The funds raised from the placing, along with our current debt facilities, cash resources and cash flow from operations, enable us to retain the financial and operational flexibility necessary for our next phase of growth.”
BP said yesterday that oil had begun to flow from the Machar East development in the North Sea, about 150 miles east of Aberdeen.
It is the energy giant’s first development to be brought on stream this year.
The £64million Machar East development was only recently discovered using advances in seismic interpretation technology.
It consists of an initial single production well, with a subsea bundle system tieback to the Machar subsea manifold cluster.
BP said it expected the well to peak at 7,000 barrels of oil per day, with recovery forecast at about 8million barrels. The subsea system can accommodate further expansion for another production and water-injection well.