• Wednesday, 16 May, 2012

More Greenland woe for Cairn

Ocean Rig sin rigg

Coming up dry: Leiv Eiriksson drilling non-commercial wells off Greenland for Cairn

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By Eoin O'Cinneide

 30 November 2011 07:55 GMT

Cairn Energy has once again failed to unearth a commercial discovery off Greenland as it plugs and abandons its final two wells on one block.

Despite the failures, coming after several others for Cairn in the area, the company claimed that "all of the ingredients for success are in evidence" at its plays off Greenland.



The latest disappointment will come as a particular blow after the UK independent had recently encountered what it thought were promising reservoir sands at one of the wells on the Atammik block.



The AT7-1 well located some 200 kilometres off the Greenland capital of Nuuk threw up a 113 metre gross interval with 53 metres of net Cretaceous reservoir quality sands. However, "the lithology of the highly permeable zone of losses remains unknown," Cairn wrote in a statement on Wednesday.



"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," it continued.



The well was being drilled by the OceanRig-owned drilling rig Leiv Eiriksson in water depths of around 900 metres.



"An MDT [modular dynamic tester] 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 [UK] 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."



Edinburgh-based Cairn also hit the brakes at the AT2-1 well, also in the South Ungava area of the Atammik block, which has now been plugged and abandoned.



The well, being drilled by the Ocean Rig Corcovado, did, however, encounter "minor hydrocarbon shows" while reaching a total depth of 1045 metres.



Simon Thomson, Cairn's chief executive, put a brave face on the latest disappointments, commenting: “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.”



Shares in Cairn slipped 4% before the opening of trading in London on Wednesday.

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