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'Balanced' Cairn Energy upgraded by RBC

Rating now outperform while new price target points to 30% upside
picture of oil rig
North Sea to come onstream this year

Cairn Energy PLC (LON:CNE) has been upgraded by RBC, which believes the oiler will soon be self-funding.

This year, 2017, should see Cairn progress to become a  balanced E & P business, adds the Canadian broker.

Kraken (Cairn 29.5%) and Catcher (20% Cairn) in the North Sea are expected to come onstream later this year with net plateau production in 2018 of 20–25,000b/d (barrels per day).

Majors such as Total buying into fields in Africa, meanwhile, have highlighted the value of the 2.7bnbbl SNE deepwater field in Senegal (40% Cairn and operator), which shares many similar characteristics.

The conclusion of the upcoming SNE-6 interference test should crystallize industry interest believes RBC.

Deal flow could create the potential for shareholder returns worth 40–80p/share, adds RBC, which has a price target of 270p (from 250p)  and outperform rating.

Cairn shares rose 1% to 208.2p.


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