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Share Name Share Symbol Market Type Share ISIN Share Description
Cairn Energy Plc LSE:CNE London Ordinary Share GB00B74CDH82 ORD 231/169P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  6.50 4.1% 164.90 165.10 166.00 168.90 161.20 162.40 1,566,668 16:35:11
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 402.2 90.1 15.4 10.8 972

Cairn Energy Share Discussion Threads

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DateSubjectAuthorDiscuss
07/4/2017
11:36
I'm not 100% sure, so do check, but I think the tax dispute arose out of a transfer of the Indian assets within the Cairn structure to Cairn India Holdings Limited. That company is registered in the Channel Islands, which charges nil corporation tax and nil capital gains tax. The Indian government felt that Cairn had unfairly dodged a tax charge that would have applied if the transfer hadn't happened. There's also apparently an indemnity provided by Cairn Energy plc to guarantee that the Indian government receives all the tax due. It's very complicated and I may have it only approximately right. Highly paid barristers have been arguing over this for years, so I accept I am out of my depth trying to reason the outcome of the arbitration. Whatever, someone seems happy to buy Cairn shares this morning (up >4%). Perhaps there will be some news on Monday?
ed 123
07/4/2017
10:07
You make interesting points Ed. I don't feel Cairn is in the Google et al category because my understanding is that they paid the tax due and years later, after changing the rules, the Indians came along looking for more. Strangely enough, Cairn is the company highlighted in today's Daily Telegraph 'Business Insight' column. Their SWOT analysis states under 'Strengths' that $4.5bn has been returned to shareholders in the past 5 years. The truth is not a penny has been received in nearly five years! Interesting moves today. Still a long way off my £2.72.
ladywormer
07/4/2017
09:40
Morning, Ladywormer. The dispute moved on from the Indian justice system. It's now with the International Court of Arbitration. To be fair to India, other countries (including the UK) are trying to get more tax paid by some foreign companies which they feel are not living up the spirit of the tax legislation. So, here, Google, Apple and Amazon among others, have agreed to pay more tax than was strictly due according to the letter of the law. The obvious problem for Cairn is that it can't project with certainty its capital requirements. The tax bill and the value of the frozen shares are very material to Cairn. To an extent, holding Cairn shares is a gamble on the outcome of the arbitration. Looking at the sector leading performance by Cairn this morning (up >3%) I wonder if someone is expecting good news?
ed 123
07/4/2017
08:17
a retrospective tax demand of Rs. 29,047 crore on 10-year old internal reorganisation of its India unit, Cairn India I keep having to look up the original tax demand. Crore is 10 million rupees. They were also demanding interest but govt generously offered to waive interest if the tax was paid, offer which was not taken up and has expired.
rogerlin
07/4/2017
07:46
Morning Ed. I have no facts to base my opinion on but have always felt it was an illegal move either to bolster Vedanta or to allow, say, an American company to pick up Cairn on the cheap. I purchased my small holiding of 5,000 shares in July 2012. At the time CNE had a market cap equal to its one billion dollar residual holding in Cairn India. So, my thoughts were that the rest of the company was in the price for nothing and Cairn has a good reputation for finding oil and returning profits to shareholders. Along came this ludicrous claim and no investor in their right mind would want to be involved in a company that pays no dividend, is being portrayed as a tax cheat and is now drowning in the lethargy of the Indian 'justice' system. That leaves CNE shares open to the wolves. To answer your question: I don't see how the Indian government have a leg to stand on but it is a very corrupt country and I still see Vedanta/Goldman Sachs as having orchestrated this and if so, they will get their way in the end. I am holding because I have no gains to offset.
ladywormer
06/4/2017
19:37
Hi Ladywormer. The parties are very likely talking to each other. An agreement can be reached without requiring the arbitrators to come to any decision. My view is that the stockmarket is pricing Cairn shares assuming it will lose its 9.8% holding in Cairn India but no more than that. What is your view? Again, my view only, even if Cairn does well out of the process, it is not going to get all the losses/damages it has sought. That would have been a starting point for negotiation, presumably listing all direct and indirect/consequential losses, totalling up to a huge sum. So, I think we can forget £8 per share. Realistic upside? I think, if Cairn gets the decision that no further tax is due and its Cairn India holding is unfrozen, and sellable, that will be a very good result for Cairn shareholders. How do you think the arbitration will go and why?
ed 123
06/4/2017
15:51
Ed. You are saying these are worth £8 if we win; £1.20 if we lose?. I am with Dogwalker and think the Indian government is totally at it. This should never have happened but been resolved years ago. There must surely be another agenda behind the scenes here.
ladywormer
06/4/2017
15:41
Thank you Ed123. I'm unable to better the market vis-a-vis putting a current value on companies. I can only hope here that : there's a tax refund in India; the poo goes higher & stays higher; that the co.'s North Sea assets prove as productive as hoped; & the other , exploration, assets do well. On balance I expect the share price to increase as the story, inc cash in the bank, sounds comparatively solid, but I know that doesn't answer your question.
dogwalker
06/4/2017
14:01
Hi Dogwalker. 2C is proved plus probable contingent resources. 2P is proved plus probable reserves. I wouldn't say the Indian government is trying to steal, they are trying to recover taxes that they consider should be paid. How much do you think Cairn is worth and why?
ed 123
06/4/2017
12:56
Yes : what's '2C'? And...'2P'? Without posters being explicit it's often hard for some of us to follow. Other than that, great post Ed 123. I hadn't realised the company was worth so much if the India govt wasn't trying to thieve from us.
dogwalker
06/4/2017
12:16
Hi Frazboy, Royaloak and all. From what I've read Cairn are claiming about £4.4 billion in total from the Indian government and the latter are claiming about £1.5 billion from Cairn and have frozen about £0.5 billion of Cairn owned assets. You may know the history? The Indian government lost its case in the Supreme Court of India and then passed legislation which it said clarified the law but its effect was to retrospectively make companies (including Vodafone and Cairn) liable for tax which the Supreme Court had said was not due. I have been trying to estimate what Cairn's share price of 200p-ish says about the market's expectation of the result of the arbitration. Cairn's market cap is about £1.2 billion. It is valued at about $5/bbl for its reserves and resources. I'm assuming that the 2C will convert to 2P by the end of this year and, on that basis, the market appears to have it about right, imo. So, I guess Cairn holders are playing for exploration upside (especially offshore Senegal) and a positive outcome from the arbitration. The latter could take the value of Cairn up to four times its present value. Downside? Cairn loses and gets a bill of £1.5 billion or about £1.0 billion net of the value of the assets frozen by the Indian government. If that happened, Cairn's share price could drop to around 120p, by my estimates. These are my rough calculations. Any thoughts?
ed 123
06/4/2017
09:01
frazboy My concerns for Cairn are India, FAR cash raising again A$80 Million at 8 cents per share, disappointing but fully underwritten, in my opinion the best way to participate in Senegal and surrounding areas is through FAR, Cairn not having to pay FAR's share, in fact I think the likes of Cairn and bigger companies will eventually takeover FAR.
royaloak
05/4/2017
11:21
I don't know of any new news. The Indian government submitted its response to Cairn's claim. The expected date of the final judgement is January 2018. The reports I've read suggest that Cairn should win, based on the principle that it is unfair to pass a new law which can be applied back to a transaction that took place 6 years earlier.
ed 123
05/4/2017
11:00
Hi Ed, I was jumping to conclusions a little. Clearly they're not awash with cash, or they wouldn't be raising funds. I forget the numbers in Cairn's recent results but $47m Aus won't last them much beyond the current work programme, and IIRC, there was talk of extending this for a further 2 wells? Where PMO and ENQ are concerned, I agree, they will find the funding to get to the fields on-line - and I also hope they'll find the funds to complete the well programmes (about 20 wells in each field). At start-up they will have around two third to three quarters of the well stock. There's no hint that this will not be the case (the full well programme not being completed within 12 months of start-up) , but it does cast a slight shadow. Agree, Cairn drifting, and underperforming. And, yes perhaps a little off the radar. I'm considering adding, my major concern is that the Indian settlement will go against them. It was stated at the time of the dividend being released by the International court of Arbitration that this action has no bearing (the release of the dividend) on the outcome of the final settlement on the tax claim. Any news that anyone has on this would be greatly appreciated.
frazboy
05/4/2017
10:46
Hi Frazboy. Why do you think FAR has no cash? In March 2017 they announced that they were funded for the 2017 work program and had A$47million at 31 December 2016. They are in the process of raising more funds - presumably on the back of their exploration success and for the purpose of taking on further work? PMO and ENQ are in big debt situations but have enough funds available to continue with their commitments. Cairn drifting back to 200p? It's waiting on the Indian arbitration and is part way through its 2017 Senegal campaign. Maybe a bit off the radar atm? Seems to have value at the 200p level and is demonstrating growing resources in Senegal, which is a hot postcode in global oil addressing.
ed 123
05/4/2017
10:14
So, FAR have no cash, PMO have no cash, and ENQ have no cash. I don't forsee Cairn picking up tabs (for any of the developments) for any of these companies but there indebtedness must weigh on the Cairn share price
frazboy
05/4/2017
08:41
FAR suspended in Australia pending further cash raising news.
royaloak
04/4/2017
07:00
I guess they're waiting on the VR-1 well exploration target prior to press releasing. SP has been weak over the last few weeks and has underperformed the oil price - not sure how that compares with other oilers I wonder if they've been paid the divi from Cairn India
frazboy
03/4/2017
06:55
http://far.live.irmau.com/irm/PDF/2259_0/AreaofMutualInterestAgreementCNOOCFAR FAR collaborating with CNOOC.
rogerlin
27/3/2017
11:50
More success in Senegal: VR-1 well finds oil in Senegal, 8/8 successful wells drilled • The VR-1 well has drilled to a depth of 2759m, below the OWC for the SNE field • The well intersected a 97m gross oil column across multiple reservoirs with highest net pay in any well drilled to date • Greater than expected thickness of Lower SNE Reservoirs in oil column • Best Lower SNE Reservoir properties measured so far in the SNE field • Samples of oil have been taken confirming fluid contacts • FAR expects the VR-1 well results to contribute to a revision of resource estimate for SNE • Well is currently ahead of schedule • Operations are continuing, preparing to deepen and drill into the Aptian carbonate play Drilling operations on the FAR Limited (ASX: FAR) VR-1 well offshore Senegal have reached a depth of 2759m, wireline logging and sampling through the SNE section are complete and preparations are underway for deepening the well into the Aptian carbonate objectives below the SNE field. FAR’s evaluation of the well results are as follows: • The reservoir units are in oil as prognosed • The lower, 500 series 520 reservoir (16m in oil), a key reservoir to the phase 1 development of the SNE field, exhibited excellent reservoir properties, superior to all other reservoirs sampled in the SNE field to date • The deeper 540 reservoir (11m in oil) has only been seen in the SNE-2 well in oil (2m) • Samples of oil have been taken • Along with other appraisal wells, the well confirmed a 97m gross oil column with greater than expected net pay and thickest net pay of all appraisal wells drilled to date FAR anticipates that the results of the VR-1 well, together with the recent SNE-5 results will lead to a revision of contingent resource estimate for the SNE field and have an impact on design of the development plan in the coming months. The 1C resource is currently 348mmbbls* (gross, unrisked, ref ASX announcement 23 August 2016) compared to the minimum economic field size for the SNE field of 200mmbbls. The VR-1 well is the 8th successful well to be drilled offshore Senegal since drilling commenced in 2014. Currently the well is 4 days ahead of budget reflecting similar Figure 1: Location of the planned VR-1 and SNE-6 wells * Refer to Cautionary Statement in this report (Page 3) relating to estimates of prospective resources Page 2 efficiencies experienced at the SNE-5 well. The VR-1 well is located approximately 5kms west of the SNE-1 discovery well (as seen in Figure 1) and is being drilled to appraise the lower and upper reservoir units in the western part of the SNE field. The VR-1 well will also assess the potential for additional reservoir units within the upper reservoirs in the western part of the SNE field. In addition, the VR-1 well will examine deeper Aptian carbonate exploration targets under the SNE field (refer to Suum lead in FAR ASX announcement dated 7 February 2017). The cross section in Figure 2 illustrates the location of the well relative to the SNE reservoirs and the deeper Aptian target. Budget and drilling efficiencies Due to the efficiencies achieved on the SNE-5 well and projected improved drilling performance, FAR estimates that the inclusion of the VR-1 well into the drilling program will have a minimal incremental funding impact for FAR (estimated at approximately A$2-3 million). FAR reported a closing cash position at 31 December 2016 of $47 million. FAR is able to fund the additional VR-1 well. FAR Managing Director, Cath Norman, said, “The VR-1 well has been highly successful, providing important information regarding the geology of the western flank of the SNE field and in particular the nature of the 500 series reservoirs. Understanding these reservoirs is critical to finalising the Phase 1 development concept and plan. The operations team and the Stena DrillMAX continue to perform well and it bodes well for further cost savings in the drilling program. We look forward to bringing our shareholders results from our exploration of the deeper Aptian carbonate play.”
royaloak
22/3/2017
08:48
Cairn farm-in to a 30% WI in Frontier Exploration Licence (FEL) 2/14 in Southern Porcupine Basin with Providence Resources and Sosina; with one firm well in 2017. This is likely to be drilled in June and is a large target (Druid/Drombeg prospects).
rogerlin
21/3/2017
14:26
The share price is strongly correlated with the oil price. Possibly best to chart that first and then look for company specifics that could cause the share price to break the link
frazboy
21/3/2017
12:32
Any Chartists care to have a stab at the share price target? 240p looks good to me, completing a 'mini-bowl'.
gymratt
08/3/2017
16:05
Investors Chronicle summary of results:- "Although intangible exploration assets and the Indian stake take up a fair chunk of the value of Cairn's equity, the shares trade at a 28 per cent discount to book value - a rating we believe underestimates the group's potential drilling, settlement and production catalysts. Buy."
alan@bj
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