Shares in the Edinburgh-based oil and gas explorer rocketed to their highest level in more than 12 months this week as it sold off stakes in its interests in Greenland and India to a Malaysian company.

Petronas, one of the world’s biggest oil and gas firms, bought a 10% stake in the six blocks Cairn operates off Greenland for $70m (£43m) and increased its 12.64% holding in Cairn’s Indian subsidiary to 14.94%.

The Malaysian firm’s support was seen as a vote of confidence that Cairn would make discoveries in its Greenland operations, boosting shares after the news on Wednesday.

In a separate statement, Cairn said that it had completed financing arrangements for $1.6 billion of funding for its Rajasthan project in India. Petronas’s increased holding in Cairn India cost the firm $240m.

When Petronas first bought a shareholding in Cairn India, in 2006, the deal valued the business at around £3.5 billion, while this week’s proposed deal values Cairn’s remaining 62.75% holding at £4 billion. The rise is likely to be due to the company’s Mangala discovery in 2004 — which Cairn has successfully brought into production. Cairn floated its Indian subsidiary on the stock exchange in Mumbai in 2007.

Shares closed last week at 3,016p — 3% below their Wednesday peak.

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