Canaccord lifts target price on Cairn Energy

5th Jan 2016 11:05

(ShareCast News) - Canaccord Genuity on Tuesday raised its target price on Cairn Energy to 185p from 170p after the company announced the successful testing of the SNE-2 appraisal well offshore Senegal with positive results.The oil and gas exploration and production company on Monday said operations have been safely and successfully completed following drilling, coring, logging and drill-stem testing and the well is now being plugged and abandoned.Cairn said drill-stem testing was carried over a 12 metre interval which produced a stabilised but constrained oil flow rate of 8,000 barrels per day of high quality pay."This is an excellent result for Cairn (40%, operator) and partners ConocoPhillips, FAR Ltd, and Petrosen (state oil company)," Canaccord analyst Charlie Sharp said."Cairn has not provided any updated resource figures (currently 150-670 mmbbls) with 2C of 330 mmbbls, but we would expect an uplift to the base and mid case estimates following the SNE-3 well."Cannacord reiterated its 'speculative buy' rating on the stock.Sharp said despite the difficult market for exploration and production firms, there is "sufficient relatively low-risk newsflow coming up to continue our positive view on Cairn Energy"."Catalysts include the SNE-3 well result in mid/late February with a resource update then or shortly after, the Bellatrix exploration result late Q1 which could de-risk the potential of additional exploration targets, the possibility of committing to the full six-well programme to include additional exploration targets based on new 3D seismic, and even a resolution to the Indian tax dispute."