New Capital
Contrarian, deep value, long/short equity, special situations

Cairn Energy: Recent Share Price Decline Provides 80% Upside

(Editor's Note: Shares of Cairn Energy trade with limited liquidity under CRNCY. The company's London Listing CNE.L offers enhanced liquidity.)

Business Model

Cairn Energy (OTCPK:CRNCY) operates a so-called asset-play business model - identifying and exploring assets, confirming any reserves/ resources through initial stages of exploration and development and then finding ways of releasing the value of these assets either through divesture or sale, rather than running the wells itself. Company's strategy is to focus on frontier basin potential (e.g. Greenland basin) as well as overlooked plays in more mature basins (e.g. North Sea). The company tends to form Joint Ventures to minimize exploration risk and capex.

Due to its business model structure, Cairn Energy income statement hardly sees...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details