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Cairn director buys £624,000 of company shares

The Independent: Cairn director buys £624,000 of company shares

By Saeed Shah

23 June 2004

The deputy chairman of Cairn Energy splashed out nearly £624,000 on shares in the company yesterday, following large share purchases by other company directors recently.

Analysts said the amount of personal wealth being put into Cairn shares by directors indicated that the company’s huge discoveries at a field in India could be even more promising than previously thought.

The directors have been buying even though the stock has already trebled in value since the find was made public in January. Cairn is currently in the process of drilling appraisal wells at its field in Rajasthan, which was bought from the troubled oil giant Shell for just £4m before the discoveries. Any more positive news that emerges on the field will add to Shell’s embarrassment over the sale.

Hamish Grossart, the deputy chairman, bought 50,000 shares at £12.48 a share yesterday – doubling the number of shares he owns. Last week, the company’s chairman, Norman Murray, spent £118,500 on Cairn shares, while the exploration director, Mike Watts, put £198,516 into the stock – equal to almost a year’s pay.

Peter Hitchens, an analyst at Crédit Agricole, said the telling purchase was that made by Mr Watts, who was best-placed to judge the value of the find. “These directors are saying they have a huge amount of confidence … they are buying in anticipation of the drilling results,” he said.

Cairn Energy shares closed up 5 per cent at a new high of £12.70, valuing the company at £1.9bn – almost £1.4bn more than its value before the news of the discovery in January.

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