Cairn Encounters O&G at Baffin Bay Exploration Wells

Cairn updated its 2010 exploration drilling campaign offshore Greenland.

All operations concluded at the end of the drilling season as agreed with the Greenland Bureau of Minerals and Petroleum (BMP) and the Stena Forth and Stena Don rigs have been released off contract. The Alpha-1S1 exploration well has been suspended to allow possible re-entry to sidetrack or deepen the well at a later date. The T8-1 and T4-1 exploration wells have been plugged and abandoned.

Well Summaries


As previously announced, the Alpha-1S1 well encountered oil shows in the volcanic section. In accordance with the BMP regulations, drilling operations ceased as of September 30, 2010. At this point the well was still in volcanics and the prognosed Mesozoic section had not been reached.


The T4-1 well, which was targeting a Tertiary objective at a different stratigraphic level to T8-1, failed to encounter any significant hydrocarbons and found only thin reservoir sands, although geochemical analysis continue on selective samples.


The T8-1 well, which (as announced on August 24, 2010) encountered gas in thin sands has been plugged and abandoned.

The T8-1 and T4-1 wells did not result in commercial discoveries; consequently the well costs, including all associated demobilization and other costs, of US ~$185 million are forecast to be written off in accordance with Cairn's accounting policies. The primary objectives of the Alpha prospect were not reached, the well has been suspended and any future re-entry work depends on the results of further evaluation.

Ongoing Operations

Geophysical operations in Greenland are still active with a 2,500km 2D seismic survey currently ongoing on the Eqqua Block and some data will also be acquired in the Sigguk block (~215km) for well-tie purposes. A 7,400km 2D survey was completed during the summer across the offshore south Greenland blocks.

Cairn has now drilled one third of all exploration wells ever drilled offshore Greenland and the first wells in the Greenland Arctic for almost 35 years. This campaign has demonstrated to the Greenland Government and the industry that drilling operations can be successfully and safely carried out in this area.

Mike Watts, Deputy Chief Executive, Cairn Energy, said, "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.

Cairn continues to evaluate all the data acquired this summer. Plans for the forward exploration program in 2011 are already underway and will be announced in Q1 2011."

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