Cairn Energy has announced that it has completed all the Government and third-party approvals required under the Sale and Purchase Agreement (SPA) for the sale of all its interests in Senegal to Woodside. The completion is to take place before the end of the year.

The cash to be received by Cairn at the end of the deal, per the agreement, is approximately $525 million, including the $300m acquisition consideration and a $225 million reimbursement of expenditure incurred on the sale assets since the 1^st of January 2020.

A further payment of up to $100 million is payable to Cairn if certain conditions are met regarding the date of first production from the Sangomar development and the oil price as at that time.

After the completion of the sale, Cairn Energy is to pay a special dividend of 32% per eligible ordinary share amounting to approximately $250 million of £188 million to shareholders and complete a consolidation of Cairn’s ordinary share capital. The special dividend is to be paid on 25^th January 2021 to those on the register on 8^th January 2021.

The Share Consolidation will reduce the number of Cairn’s issued ordinary shares by an amount that reflects the value of the Return of Cash to Shareholders relative to the market capitalisation of Cairn prior to the Return of Cash. The aim of this is to ensure, so far as possible, the market price of an ordinary share remains approx. the same before and after the Proposed Return of Cash and to maintain comparability of historical and future per share data. The Share Consolidation will reduce the number of ordinary shares in Cairn which shareholders own, but not the proportion (subject to allowance for fractional entitlements).