Cairn Energy fails again in Greenland

26th Oct 2010 07:12

A third disappointment during its drilling campaign offshore Greenland slammed Cairn Energy on Tuesday, but the company remains positive even if short term investors don't.News that the T4-1 exploration well in the Baffin Bay region turned up dry follows a similar outcome for the T8-1 well, while drilling at Alpha-1S1 stopped at the end of September.The latest failure cost Cairn $185m, although the company remains "extremely encouraged" by the early stage drilling.Mike Watts, deputy chief executive, Cairn Energy, commented: "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."Analysts were largely positive. "We would highlight that this year's drilling only represents the initial stages of a long-term exploration programme across a vast area that could still be highly prospective in terms of hydrocarbon discoveries," Jonathan Jackson at Killik Capital said."Overall, however, the news does highlight the high risk nature of exploration in frontier regions such as Greenland."Drilling will continue next year. A programme will be announced during the first quarter of 2011.