CAIRN Energy has said the crude price plunge has created opportunities for the firm which has increased estimates of the size of a big find off Senegal by 23 per cent and is eyeing North Sea acquisitions.

Edinburgh-based Cairn raised its best estimate is that the SNE find contains 473 million barrels oil equivalent recoverable compared with 385m barrels previously.

Shares in Cairn Energy rose five per cent following the upgrade. This took account of appraisal drilling completed in recent months.

The company made the SNE find in November 2014, soon after the oil price started tumbling as supplies ran ahead of flagging demand.

Brent crude traded at around $48 per barrel yesterday, compared with $80/bbl when Cairn made the SNE 1 find.

However, chief executive Simon Thomson noted that the fall in the crude price has been accompanied by a sharp drop in the price of services. This means it costs firms much less to hunt for finds and to develop them than during the boom that ended in 2014.

“Senegal break even is below $35 per barrel so it’s an attractive project even in the current oil price environment,” said Mr Thomson.

He added: “As we continue to see reductions of cost across the board the economics only get better.”

Mr Thomson said the giant oil fields that Cairn is developing in the North Sea are also very attractive in the current oil price environment.

The expected cost of the Kraken development off Shetland and the Catcher project off Aberdeen have fallen by 10 and 20 per cent respectively since they were approved. Both are due onstream next year.

Mr Thomson noted: “On plateau production the blended all-in production costs for those two fields are around $17 a barrel … they’re capable of throwing off considerable cash flow for us.”

Mr Thomson said Cairn is considering buying more North Sea assets and is looking at a number of opportunities in the area.

In February Cairn acquired an additional interest in the Kraken field from First Oil Expro for a nominal cash payment, before the Aberdeen firm went into administration.

Mr Thomson signalled Cairn was not keen on buying assets that relied on ageing production facilities and came with hefty abandonment liabilities.

He noted: “Even now there is still a bit of a mismatch between seller expectations and what buyers are prepared to pay.”

He said Cairn was pleased that the tax dispute it has been embroiled in India since 2014 has now gone into arbitration.

The company made bumper finds in India under founder Sir Bill Gammell.

It has been prevented from selling the remaining 10 per cent holding in former subsidiary Cairn India, value at $383 million (£295m), pending resolution of the dispute.

Mr Thomson said the bar on selling the stake had posed challenges in 2014, when Cairn made 40 per cent of its employees redundant and sold assets.

However, he said Cairn has plenty of cash in the bank and ample borrowing facilities.

It insists it has paid all taxed due in India.

Cairn revealed it had extended a licence to explore offshore the Western Sahara region in Morocco despite facing criticism for investing in what is a contested area.

Mr Thomson said the company has acted in the area in line with UN guidance.

Cairn cut first half losses to $38m from $230m last time. It provided $177m against the value of the Cairn India stake in the first half last year to reflect stock market movements.

The company moved into Senegal and returned to the North Sea under Mr Thomson’s plan to combine potentially transformational drilling in underexplored areas with lower risk development activity closer to home.

Shares in Cairn Energy closed up 9p at 204p.