Oil explorer Cairn Energy said it would return 1.60 pounds per share in cash to investors, as part of a well-flagged plan to distribute $3.5 billion from the proceeds of the part sale of its Indian oil business.
Cairn said on Tuesday that shareholders would receive 1.60 pounds per share by means of a B share structure and they could opt to receive the cash as income or capital or a combination of both.
Shareholders have been waiting for the distribution since August 2010 when Cairn first announced plans to divest a 40% stake in Cairn India to London-listed miner Vedanta Resources.
The firm said at that time it would return substantial funds to shareholders upon completion of sale.
The deal, which saw Vedanta pay Cairn $5.5 billion for the stake, was delayed for months due to a disagreement over royalty payments, and finally completed in December.
"The remainder of the proceeds will be used to pursue other material growth opportunities with the aim of creating and realising further value for shareholders in the future," Cairn chief executive Simon Thomson said in a statement.
Cairn said it had $4.7 billion in cash at the end of December, leaving it with $1.2 billion to spend after the distribution. The firm has substantial acreage in Greenland and has recently said it is lining up exploration opportunities in Lebanon.
The cash return is conditional upon shareholder approval at a meeting scheduled for January 30, Cairn added.
Shares in Cairn traded up 2.7% to 268.9 pence at 1005 GMT, outperforming the European index of oil and gas companies which was 0.9% higher.