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Daily Telegraph: Cairn raises £102m for India field

Daily Telegraph: Cairn raises £102m for India field: “Cairn shares have more than tripled since January, and the finds on the former Shell site”

By Philip Aldrick (Filed: 03/07/2004)

Cairn Energy, the Scottish oil and gas exploration company, yesterday raised £102.9m to fund the development of its vast oil field in Rajasthan, northern India.

The cash was raised by way of a placing with institutions of 7.5m new shares at £13.70. The fundraising was twice oversubscribed and increased the share capital of the company by 5pc.

Cairn has made three major strikes in the 3,125 sq mile field and drilled 25 wells. Chief executive Bill Gammell said there was still “an awful lot of drilling to do. We’ve certainly got at least another 30 wells ahead of us.”

The £102m raised after expenses will help pay for the development of its two key finds, the Mangala site and an as yet unnamed site known as N-A. Drilling the wells and building the processing facilites to begin extraction is expected to cost about $500m (£275m).

Cairn is currently generating about $200m of cash a year and has a further $240m of loan facilities. Mr Gammell said: “With this placing, we’ve got enough to develop through to first production in 2007.”

Cairn shares have more than tripled since January, and the finds on the former Shell site in India. Yesterday they closed 10 higher at £14.20. The $500m is also expected to cover the cost of drilling new test wells, at a cost of roughly $1.5m each.

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