Cairn keeps options open offshore Greenland

Cain Energy has completed its exploration drilling commitments offshore Greenland for 2010, the first wells drilled in the region for nearly 35 years.

Offshore staff

EDINBURGH, UK -- Cain Energy has completed its exploration drilling commitments offshore Greenland for 2010, the first wells drilled in the region for nearly 35 years. The two rigs contracted for the program, the Stena Forth and Stena Don, have been released. 

Of the three wells drilled to date, Alpha-1S1 exploration well has been suspended to allow possible re-entry at a later date for a sidetrack, or to deepen the well, which has not yet reached the prognosed Mesozoil section.
Neither of the other wells, T8-1 and T4-1, resulted in commercial discoveries. T8-1, which encountered gas in thin sands, has been plugged and abandoned.

T4-1 well, targeting a Tertiary objective at a different stratigraphic level to T8-1, found only thin reservoir sands, although Cairn is continuing geochemical analysis of selective samples.

The costs of these two unproductive wells - up to $185 million, including associated demobilization and other costs – will likely be written off in accordance with Cairn’s accounting policies.

The company is persevering with geophysical operations off Greenland, with a 2,500-km (1,553-mi) 2D seismic survey in progress on the Eqqua Block. Some data will also be acquired in the Sigguk block (up to 215 km, or 133 mi) for well-tie purposes.

During the summer, a 7,400-km (4,598-mi) 2D survey was completed across the company’s blocks off southern Greenland.

Mike Watts, Deputy Chief Executive, Cairn Energy, said: “Exploration in Greenland is at a very early stage and consequently to have encountered both gas and oil in two of the first frontier exploration wells in the previously undrilled Baffin Bay geological basin is extremely encouraging. “Cairn continues to evaluate all the data acquired this summer. Plans for the forward exploration program in 2011 are already under way and will be announced in 1Q 2011.”

10/26/2010

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