Cairn successfully tests Senegal production well

Oil explorer Cairn Energy has carried out its first successful production test at its oilfields in Senegal, sending its shares up 9 per cent, though it was trading later up about 3 per cent.

The company said it had produced high-quality oil at a rate of 8,000 barrels per day from its SNE-2 well 100km off the coast of Senegal. Cairn is based in Edinburgh, Scotland, and also has an interest in exploration off Ireland’s west coast.

At least two analysts said Cairn Energy’s production rate at the Senegal well was better than expected, and removed significant uncertainty about the quality of the reservoir, which Cairn Energy estimates could hold more than a billion barrels of oil.

"I think this confirms a strong potential for commercial discovery," said RBC Capital Markets analyst Nathan Piper. – Reuters