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The Guardian: Cairn raises £103m for exploration in India

The Guardian: Cairn raises £103m for exploration in India: “Cairn bought its assets in the province from Shell last year for $7.2m (£4m) and its stock price has more than tripled since”

Richard Wray

Saturday July 3, 2004

Cairn Energy, the oil exploration firm that has seen its shares more than triple in value this year, yesterday raised just under £103m to fund the continued development of its operations in Rajasthan, western India.

Cairn bought its assets in the province from Shell last year for $7.2m (£4m) and its stock price has more than tripled since it reported its first discovery there in January.

Yesterday the company raised £102.9m in a placing priced at £13.70 a share. At the start of the year Cairn’s shares were changing hands at less than £4 each.

The shares eased slightly early in the day on news of the placing but the evidence of strong demand from investors turned the tide and the stock closed up 10p at £14.20, valuing the business at £2.1bn.

Institutional investors jumped on board the placing because Cairn is widely tipped to join the FTSE 100 at the next reshuffle.

The company was so confident of demand that it did not use underwriters. It intends to use the cash to speed up its exploration in India and Bangladesh, especially in Rajasthan where its Mangala field is creating a lot of interest.

The company has five oil rigs in the region and expects to have further details of its exploratory drilling programme shortly.

Cairn has asked the Indian authorities for permission to extend its area of activities in the region and investors will be given a full update on the group’s progress on September 7 when it announces its half-year figures.

http://www.guardian.co.uk/business/story/0,3604,1253091,00.html

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