Bloomberg News

Cairn Energy Drops After Abandoning Third Well Off Greenland

September 28, 2011

(Updates shares in second paragraph.)

Sept. 28 (Bloomberg) -- Cairn Energy Plc, the Scottish oil company exploring in Greenland, dropped in London trading after abandoning its third well in less than two months.

The shares fell 6.5 percent after Edinburgh-based Cairn said today in a statement it will abandon the Delta-1 exploration well 365 kilometers (227 miles) off Aasiaat in the Napariaq Block after failing to find “hydrocarbon shows.”

Cairn had planned to drill as many as four wells off the island at a cost of $600 million this year, it said in May. So far, it has not found any commercially viable oil resources in its two-year exploration campaign off the island, the world’s largest.

Earlier this month, Cairn abandoned the nearby Gamma-1 well after previously plugging the LF7-1 exploration well, about 300 kilometers off Nuuk, Greenland’s capital.

The stock retreated 19.1 pence to 276.5 pence as of the 4:30 p.m. close in London. The shares have fallen 24 percent since August.

Other companies that have been awarded Greenland exploration licenses in the last decade include Exxon Mobil Corp., Chevron Corp. and Encana Corp.

--Editors: Stephen Cunningham, Tony Barrett.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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