Cairn raises 116 million pounds via share placement

Cairn Energy, which owns 25 oilfields in Rajasthan through its subsidiary Cairn India, has raised 116.1 million pounds by placing 6,542,270 shares with the institutions at a price of 1775 pence a share, said a company release. The placing represent a five per cent increase in the company’s ordinary share capital.

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 and the continued delivery of shareholder value, Bill Gammell, company’s chief executive said.

Cairn India has discovered 25 oil fields in Rajasthan. The largest three oil fields are the Mangala, Bhagyam and Aishwariya fields.

 

Gammell added that the company is well positioned to deliver value from its world class fields in Rajasthan where first production will commence in 2009.  At the same time exploration efforts continue across our exciting acreage in Greenland where the company is looking at options to accelerate drilling, possibly into 2010, he said.

Given the background of global market conditions, the company  believes it is both sensible and prudent to strengthen its equity capital base in order to maintain operational and financial flexibility across all its operations.

Although the directors consider that the existing banking facilities, together with the group’s cash resources, currently provide sufficient funding to complete the core Mangala development plus the export pipeline, strengthening the equity base now will ensure that the group can retain significantly greater optionality in delivery of the Rajasthan project.