Cairn broadens its horizons with Nautical buy

Cairn Energy is continuing to bulk up outside Greenland, where its wells have always come up dry, after agreeing to buy North Sea oil company Nautical Petroleum for £414m.

The 450p-a-share deal, Cairn Energy's second since announcing its change of focus in March, will hand just over £4m apiece to Nautical's founders, chief executive Paul Jennings and commercial director Stephen Jenkins. However, the pair may end up pocketing even more after the market indicated it believes Nautical will receive a higher bid from a rival.

Cairn has focused its energies on Greenland in the past two years, but after failing to strike oil it pledged to spend some of its $1.2bn (£770m) cash pile on businesses elsewhere that would be oil producing in the near term.

In April, Cairn bought Agora Oil & Gas, a Norwegian company with oil and gas exploration rights in the UK and Norway, for $450m.