Striking lucky in Greenland proves good news for Cairn Energy

Cairn Energy and Premier Oil are The Share Centre preferred pick in the oil and gas producers sector.

Nick Raynor, investment advisor at The Share Centre, explains why investors looking for exposure to the oil and gas sector should ‘buy' Cairn Energy.

"Results for the first half of 2010 up until 30 June secured Cairn Energy as our favourite in the sector - with revenue up 311% to £216m as the company swung to a profit after making a loss in 2009.

"News that Cairn Energy has discovered gas and oil-bearing sand off the coast of Greenland is good news for investors. Coupled with last week's news that Cairn will be selling a 51% stake in its Indian business, to Vedanta Resources, for £5.4bn this has confirmed to us that the stock could be a good long-term investment for those seeking growth.  The funds raised will help go towards exploration in Greenland and shareholders are expected to receive a substantial amount of the proceeds in early 2011.

"We will be watching the situation carefully as Oil & Natural Gas Corporation could still decide to counter bid for Cairn India, which could lead to an even better result for investors."