Edison Initiates Coverage on Cairn Energy

Jul 02, 2015, 06:17 ET from Edison Investment Research

LONDON, July 2, 2015 /PRNewswire/ --

Edison Investment Research, a leading international investment research firm, announces the initiation of full coverage of Cairn Energy

Highlights of the analysis on Cairn Energy by Edison's oil & gas analysts Will Forbes, Kim Fustier, Ian McLelland and Elaine Reynolds are as follows:

Cairn is a UK-listed E&P with assets in the UK, Norway, Senegal, Morocco, Mauritania and Greenland. It participates in two UK projects in construction (Catcher and Kraken) and operates three blocks offshore Senegal where it discovered oil in 2014.

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Cairn is arguably a lower-risk investment opportunity than E&P peers, as 35% of our 216p/share RENAV and 64% of our 119p/share core NAV sit in its c $700m cash pile (our estimate as of end-June 2015). Unlike many E&Ps, Cairn stands in the comfortable position of being fully funded on its $610m share of development capex and on exploration spend. In the medium term, the key levers for Cairn's stock price are the Senegal E&A campaign, which could add 11-24% to the shares; and an Indian tax resolution, which could theoretically add as much as 30%. Estimated future NAV growth is modest at 9-15% pa; however, this is understandable in view of the stock's lower risk profile.

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For more information please contact:
Will Forbes       Edison Investment Research   +44(0)20-3077-5749
Kim Fustier       Edison Investment Research   +44(0)20-3077-5741
Ian McLelland     Edison Investment Research   +44(0)20-3077-5756
Elaine Reynolds   Edison Investment Research   +44(0)20-3077-5713

SOURCE Edison Investment Research