Cairn Energy widens 2013 loss, suspends share buy-back

18th Mar 2014 07:43

- Annual loss widens as costs rise- Unsuccessful exploration and disposal of assets- Share buy-back suspended on talks with India tax authoritiesCairn Energy widened its annual loss, reflecting unsuccessful exploration costs and the disposal of assets. The oil and gas explorer posted a loss before tax from continuing operations of $1.1bn in 2013, compared to $194.2m a year earlier. Costs of unsuccessful exploration came to $213m, including $107m relating to the Foum Draa and Juby Maritime wells offshore Morocco. A further $81m was written off on North Sea exploration wells including Frode and Klara in the Norwegian North Sea and Timon in the UK North Sea. Another $25m was written off on assets elsewhere. In December, Cairn completed the sale of its interest in the UK Mariner field which resulted in an accounting loss before tax of $25m. However, the sale frees the group $300m of future capital expenditure."We continually evaluate the entire asset base to ensure that our equity is at appropriate levels to offer potential growth opportunities, allied with appropriate financial risk exposure," the company said. Cairn added that its net cash of $1.25bn at the end of the period provide the necessary funding to meet planned exploration and development commitments. The board is suspending its share buy-back programme until the position related to its shareholding in Cairn India is resolved. In 2012 the group disposed of 11.5% of its shareholding in Cairn India in two separate transactions resulting in a loss of $81.5m. The Indian Income Tax department have since placed a restriction on Cairn selling further shares in Cairn India as interactions between the two continue. "The group was compliant with tax legislation in place at the time in each relevant jurisdiction, including India. The group will take whatever steps are necessary to protect its interests."Shares fell 5.85% to 185p at 08:22 on Tuesday. RD