Cairn Energy fails to find oil again
Wednesday 30 November 2011
Oil and gas explorer Cairn Energy revealed more misery for its controversial drilling campaign off the coast of Greenland today as it failed to find oil in two more wells.
The Edinburgh-based firm saw shares fall 4% as it wrapped up this year's programme empty handed, following the closure of three other wells earlier this year.
Cairn chief executive Simon Thomson vowed to continue operations in 2012 but no decision has been made on future drilling, while environmental campaigner Greenpeace accused Cairn of "squandering a fortune drilling one dry hole after another".
Cairn, which launched its campaign in Greenland four years ago, shut its Delta-1 and Gamma-1 wells in September while its first well to be drilled this year, LF7-1, was plugged in August.
Shares in the firm have lost around 40% of their value since the start of the year as well after well has failed to deliver the goods.
Cairn said it was currently running a 3D seismic programme to survey blocks in Baffin Bay and southern Greenland, with potential drilling in western Greenland also in the pipeline for subsequent years.
Mr Thomson said: "Whilst we have yet to make a commercial discovery we remain encouraged that all of the ingredients for success are in evidence."
Analysts previously suggested that if the final two wells prove fruitless the $600 million (£400 million) spent on exploration could be written off.
Earlier this year, Greenpeace activists stormed Cairn's Greenland drilling platform and in June occupied its offices in Edinburgh in protest at the programme.
Greenpeace senior campaigner Vicky Wyatt said: "Cairn Energy has spent over a billion dollars drilling in the icy waters of the world's last great natural frontier and has absolutely nothing to show for it. Investors must see that they've backed the wrong horse."
Cairn currently operates 11 blocks in offshore Greenland, with a combined area of 102,000 sq km.
Cairn Energy reported in August a surge in profits from $88 million to $733 million (£442 million) in the six months to June 30 while revenues leapt from $333 million to £1.3 billion (£785 million).
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