Greenland Operational Update

RNS Number : 0104T

Cairn Energy PLC

30 November 2011

 



FOR IMMEDIATE RELEASE                                                                                         30 November 2011

CAIRN ENERGY PLC ("Cairn")

Greenland Operational Update

The following operational update relates to Cairn's 2011 exploration drilling campaign offshore Greenland where drilling operations were extended to complete activities on the last two wells in the Atammik block.

AT7-1 Well: Atammik Block, South Ungava Area

The Leiv Eiriksson has completed drilling the AT7-1 well in the Atammik block, located in 909 metres (m) of water and 202 kilometres (km) offshore Nuuk. Following the results from a Modular Dynamic Tester (MDT) programme, the well has now been plugged and abandoned.

The well had encountered a 113m gross interval with 53m of net reservoir quality sands of Cretaceous age, although the lithology of the highly permeable zone of losses remains unknown. 

Severe mud losses and poor hole conditions have hampered the full evaluation of this interval which was thought to be of potential interest because of oil and gas shows.

An MDT programme recovered fluid samples to surface and those samples examined at the rig revealed only mud filtrate and failed to establish hydrocarbons. A set of sealed MDT samples have been sent to laboratories in the United Kingdom for further analysis, together with samples of the gases recovered from gas influx events during operations.  Whilst interpretation of MDT pressures indicate that the reservoir in AT-7 is water filled, further evaluation is required to confirm the origin of the hydrocarbon shows.

AT2-1 Well: Atammik Block, South Ungava Area

The Ocean Rig Corcovado has completed the AT2-1 well, the fifth well in the 2011 exploration drilling campaign, located in a water depth of 1,045m and approximately 181km offshore Nuuk and 46km from AT7-1. The well reached Total Depth (TD) at 4,847m in Cretaceous sediments having encountered minor hydrocarbon shows. The well has now been plugged and abandoned.

Baffin Bay

A 3D seismic programme covering 1,500km² acquired on the Pitu block in Baffin Bay is currently being processed with fully migrated results expected in 2012. The results of the shallow borehole geo-chemical analysis confirmed micro seepages of oil and gas in the immediate vicinity of the main structures identified on the previous 2D seismic data.

Southern Greenland

The 3D seismic data acquired over parts of southern Greenland is currently being processed and fully migrated results are expected in H1 2012.

2012 Programme

Further evaluation will be undertaken to review and assess the exploration programme over the last two years as active farm out discussions over select areas continue for future operations in Greenland.  An additional 3D seismic survey over the Lady Franklin and Atammik region is under consideration for 2012 with the potential for further drilling in the West Greenland basins in subsequent years.

Simon Thomson, Chief Executive, Cairn Energy PLC said: 

"The first phase of Cairn's exploration programme in Greenland has encountered oil and gas shows across multiple basins and now reservoir-quality sands in the Atammik block. Whilst we have yet to make a commercial discovery we remain encouraged that all of the ingredients for success are in evidence.

Evaluation of data across Cairn's multiple blocks is ongoing against a backdrop of active farm-out discussions for selected areas."

Enquiries to:

Analysts / Investors Simon Thomson, Chief Executive Mike Watts, Deputy Chief Executive Jann Brown, Managing Director and CFO David Nisbet, Corporate Affairs                                                             Tel: [phone] Media Patrick Handley, David Litterick Brunswick Group LLP                                                                             Tel: [phone]

NOTES TO EDITORS

Cairn Energy PLC

Ø Cairn Energy PLC ("Cairn") is an Edinburgh-based oil and gas exploration and production company listed on the London Stock Exchange. Following the IPO of Cairn India in January 2007, there are two separate parts of the business:

·      Cairn India Limited ("Cairn India") is listed on the Bombay Stock Exchange and the National Stock Exchange of India and has interests in a total of 11 acreage blocks in India and Sri Lanka. Cairn retains a 52.11% interest in Cairn India (on an un-diluted basis).

·      Capricorn Oil Limited ("Capricorn"), a subsidiary of Cairn is focused on exploration. Capricorn has assets in, Nepal, Greenland, Albania and Spain.

Ø "Cairn" where referred to in this release means Cairn Energy PLC and/or its subsidiaries (including Cairn India and Capricorn), as appropriate.

Ø "Capricorn" where referred to in this release means Capricorn Oil Limited and/or its subsidiaries as appropriate.

Ø Cairn has focused its activities on the geographic region of South Asia, which has already resulted in a significant number of oil and gas discoveries.  In particular, Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. Cairn has now made more than 20 discoveries in Rajasthan block RJ-ON-90/1. Production from Rajasthan started in August 2009 and is expected to reach the approved plateau of 175,000 bopd.

Ø Cairn Energy PLC (including Capricorn) is run from Edinburgh with operational offices in Kathmandu, Nuuk and Spain.

Cairn in Greenland

Ø The Group's strong financial position and entrepreneurial exploration focus has allowed it to build a strategic and leading early entry position in multiple frontier basins offshore Greenland, a country which Cairn believes has the necessary geological ingredients for exploration success. Cairn currently operates 11 blocks, with a combined area of 102,000km², which is equivalent to 15 quadrants or 450 blocks in the UK North Sea.

Ø Cairn remains encouraged by the prospects and opportunities presented by exploration offshore Greenland. Having drilled eight of the fourteen wells offshore Greenland to date, Cairn's multi-year, multi-basin campaign in this frontier location ensures that Cairn has a considerable amount of exclusive data and knowledge which Cairn is building upon every day as the programme continues.

Ø Cairn continues to approach the campaign with a focus on safety, in terms of people, the environment and equipment

Ø Cairn through its subsidiary, Capricorn, operates 11 blocks offshore Greenland.

Ø Cairn is drilling five wells offshore Greenland during 2011.  Two state-of-the-art rigs are being used for the drilling and exploration programme - the Ocean Rig Corcovado, a sixth generation drill-ship, and the Leiv Eiriksson, a fifth generation semi-submersible.

Ø Up to fourteen vessels are supporting the drilling programme.  They provide cover for emergency response, rig stand-by, ice management, anchor handling, oil spill response and re-supply operations.

Ø Cairn has carried out extensive Environmental and Social Impact Assessments to identify how potential environmental and social impacts of the drilling programme can be avoided or mitigated. 

Ø Only twelve exploration wells have been drilled in offshore Greenland to date, five of which were drilled in the 1970s, one in 2000, three in 2010 by Cairn Energy and five to date by Cairn Energy in 2011.

For further information on Cairn see www.cairnenergy.com

 

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