Cairn rejoices in Greenland strike

21st Sep 2010 07:09

Cairn Energy has discovered oil and gas at its Alpha-1S1 well offshore Greenland.The Edinburgh-based company drilled down almost 4,500 metres and encountered gas shows over "several hundreds of metres" and oil intermittently over a 400m section.Early analysis reveals the presence of two types of oil at the well, one of the first three wells to be drilled in the Baffin Bay basin. The other two are Cairn's T4-1 well, which is still drilling deeper 100km north of Alpha, and T8-1, which has today been written off after failing to result in a commercial discovery. "The presence of both oil and gas confirms an active, working petroleum system in the basin and is extremely encouraging at this very early stage of our exploration campaign for the Sigguk block and the entire area," chief executive Bill Gammell said.Analysts at finnCap have maintained their 'hold' stance on the shares."This positive information is offset by the absence of a commercial discovery, which at the end of the day is the main objective of the drilling campaign," tey told clients this morning. "New information comes at a cost with $84m written off for the first well and the total campaign expected to cost nearly $400m."