UK-based oil and gas independent Cairn Energy has raised $910 million by selling an 8 percent stake in Cairn India to Citi, the company said in a statement Tuesday. The company retains a 10 percent stake in Cairn India after the sale of 153 million shares.
Cash proceeds from the sale will be used to fund Cairn's outgoing capital requirements, which include the development of discovered resources in the North Sea as well as the company's wider exploration led growth strategy, the company said in a statement.
The most notable of Cairn's expansion efforts in the North Sea is its acquisition of Agora Oil and Nautical Petroleum for over $1 billion earlier this year. The purchase of Agora Oil and Nautical Petroleum took place in May and August respectively.
Cairn said in an investor presentation this month that it will require $1.5 billion to $2 billion to develop its assets in Northwest Europe. The company added in its presentation that it aims to "increase future exploration opportunities through license rounds and farm-ins."
Cairn confirmed in August that it has in its stable of petroleum assets 27 offshore licenses in the UK and Norway and that, during the next 16 months, it plans to participate in up to 15 North Sea exploration and appraisal wells.
On Tuesday oil analysts at London-based FoxDavies Capital, in a brief note titled 'Cairn India, the gift that keeps on giving', said the proceeds from the share sale provides Cairn Energy "with greater flexibility to pursue its ambitions in Greenland and the wider North Sea".
Cairn India operates the largest producing oil field in the Indian private sector. It holds exploration and production positions in 11 blocks in west and east India.
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