Broker snap: RBS cuts target for Cairn after well disappointment

3rd Aug 2011 16:41

RBS has cut its target price for Cairn Energy from 510p to 440p after the LF7-1 well offshore Greenland proved unsuccessful.Cairn revealed on Wednesday that the well on the Lady Franklin Block reached target depth and is being plugged and abandoned. "The well encountered a thick Upper Cretaceous section with cemented sandstones although the deeper secondary target was absent," the broker said.However, RBS kept its buy rating on the stock, saying that while this was clearly a disappointing result, "we do not believe the LF7-1 result has an impact on either of the three prospects being drilled this year.""However, it's hard to see how this result won't impact sentiment towards the remainder of the 2011 programme.""Removing the risked 25p upside we were carrying for this well and incorporating recent updates, we revise our [target price]," the broker added.Shares were 4.79% lower at 335.80p just before the close on Wednesday.BC