Cairn shifts focus with trio of deals
Edinburgh-headquartered player Cairn Energy is returning to its exploration roots after acquiring two small companies with interests in Tunisia and selling a stake in its non-Indian unit to Dutch investor Dyas.
Rajasthan-focused Cairn said in a statement its Capricorn Energy unit would buy Plectrum Petroleum for about £23.4 million ($47.4 million) and MedOil for about £12.4 million.
Plectrum has assets in Tunisia, Australia and Peru, while MedOil is exploring in Tunisia, Sicily and Albania.
Cairn added that Netherlands company Dyas had agreed to buy a 10% stake in Capricorn for about $90 million.
Analysts welcomed the deals, saying they confirmed Cairn's stated intention to shift its focus back to exploration as its Rajasthan fields moved towards production.
Shares in Cairn rose 4.11% to 1847 pence at 0836 GMT on the news, outperforming a 0.52% rise in the DJ Stoxx European oil and gas sector index.
Shares in Plectrum rose 6.25% to 13 pence, while MedOil rose 18% to 23 pence, Reuters said.
Analysts at Citigroup said Cairn had achieved a good price for the stake in Capricorn.
"The Dyas deal implies a value for Capricorn of circa $900 million - well above the $300 million which we carried for its cash balance; much of this reflects a premium for management" the bank said in a research note quoted by the news agency.
Most of Cairn's value is tied up in its Cairn India unit. This owns the multi-billion barrel Rajasthan fields whose discovery made Cairn one of the best performing stocks in London in 2004 and 2005.
However, as new reserve additions in Rajasthan eased, the stocks advance slowed.
Last year, Cairn sold a stake in Cairn India to Malaysia's Petronas and floated part of the unit on the stock market in India.
Cairn retains control of Cairn India but has signalled its intention to sell.
The UK company said it planned to return some of the Cairn India proceeds to investors and keep some to reinvest in exploration.