CAIRN Energy boss Simon Thomson has said the company’s enthusiasm for North Sea exploration activity has not been dimmed by recent reverses as he hailed a big improvement in the performance of a flagship field off Shetland.

Read more: Cairn slashes valuation of flagship East of Shetland oil field

The Edinburgh-based company drilled three dry wells off Norway in the first half, while it extended its geographic reach in the global oil and gas business.

Cairn has acquired interests in a range of countries including Israel and Nicaragua in recent months reflecting its belief in the potential of what are seen as under-explored areas.

However, Mr Thomson said Cairn still reckons there are big finds to be made off both the UK and Norway.

Mr Thomson told reporters: “We’re looking for materiality in terms of our exploration. Inevitably that tends to push us towards the higher risk of exploration activity, we’re looking for new play types or extensions of existing play types.”

He underlined the potential of the Chimera well that Cairn is due to drill east of Shetland soon.

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“We haven’t had success with our first three wells this year but Chimera is about to drill. That’s a high risk well but if it comes in it’s extremely valuable,” he said.

Noting that Cairn has got further North Sea wells planned, Mr Thomson observed: “We’re comfortable with the level of exposure because that balances off against the emerging and frontier exploration activity we’ve got.”

Mr Thomson indicated Cairn could make more acquisitions in the UK North Sea, in which it has built a big position since he took charge in 2011.

“We keep a weather eye on potentially accretive transactions whether in the North Sea or elsewhere around the world,” said Mr Thomson.

He was speaking after Cairn revealed it generated $257 million (£210m) first half revenues from the sale of the output from the Kraken field off Shetland and the Catcher development east of Aberdeen.

Read more: Oil firm highlights appeal of North Sea as it recoups investment in giant field

It achieved a profit of around $50 per barrel on average from its North Sea production.

Shares in Cairn surged 13 per cent after the announcement.

Mr Thomson highlighted a much-improved performance by the Kraken heavy oil field east of Shetland, which Cairn developed with EnQuest.

Output lagged original expectations following production issues and Cairn cut its valuation of the field by $166m in March.

The company yesterday noted “significantly improved facilities performance at Kraken”. This has been accompanied by continued exceptional uptime on the Catcher field developed with Premier Oil.

Cairn increased its guidance for full year average production to 21,000-23,000 barrels oil per day, all attributable to Kraken and Catcher, from 19,000-22,000 bopd.

The progress Cairn has been making will likely be welcomed in the wider North Sea oil and gas industry. Cairn maintained investment in the area amid the downturn triggered by the crude price plunge that started in 2014.

Mr Thomson said Cairn has also made good headway in international markets, as it awaits the outcome of a long-running tax dispute in India.

Plans to develop the giant SME find that Cairn made off Senegal in 2014 remain on schedule. First oil is expected in 2022.

Cairn expects to drill wells off Mexico targeting more than 500 million barrels oil this year.

The company recently applied successfully for eight licences off Israel in what was only the second bid round held by the country.

In the first half it bought in to acreage off Nicaragua held by Norwegian giant Equinor.

Cairn is waiting for an international arbitration panel to deliver a judgement in respect of the Indian tax dispute that started in 2014. It is seeking $1.4 billion compensation from the Indian government.Cairn said it continues to have a high level of confidence in the merits of its claim.

Cairn shares closed up 22.9p at 200.9p.