DAVY VIEW

Reassuringly, the last operational update for Cairn Energy before its final outturn looks to be without surprise. Strategy looks well defined and financial risk is minimal at this point in time. It is entering a period of increased capital spend but it is doing so from a strong financial position and controlled expenditure. It also retains its exploration pedigree through drilling programmes in Mexico and the North Sea. While the sector has multiple challenges at present, investors should be pleased with the update.