Arctic Optimism: Cairn readies for more exploration efforts offshore Greenland

Source: Cairn Energy

Cairn Energy (LON:CNE) continues preparations for another exploratory drilling campaign offshore Greenland in 2011

“In Greenland the results from our 2010 drilling program were encouraging and the goal of our future exploration efforts will be to establish reservoir and potential commercial resources,” said Sir Bill Gammell, chief executive at Cairn Energy. “We are delighted to have secured two state of the art drilling vessels for the 2011 program." 

Upcoming Drilling Campaign 

Cairn has secured two state of the art dynamically positioned drilling vessels for its planned 2011 dual rig exploration program offshore Greenland. The "Leiv Eiriksson", a fifth generation semi-submersible drilling rig and the "Ocean Rig Corcovado", a sixth generation drillship, have been contracted to operate in the 2011 drilling season on Cairn's offshore Greenland exploration program. Both drilling vessels are operated by Ocean Rig. By contracting two vessels Cairn has increased operational capability and flexibility and continues to demonstrate its focus on safety. 

Subject to approval from the Government of Greenland, Cairn plans to drill up to four exploration wells in 2011. For reasons of operational flexibility evaluation efforts are focused on maintaining between 10 and 12 separate potential exploration well locations in a variety of operating environments and geological settings for as long as possible. The final selection of prospects and well targets for the proposed 2011 exploration campaign will be made in May 2011. 

Cairn has now been operating offshore operations in Greenland for thirteen consecutive months so demonstrating the capability of all year round work - current activity is focused on acquiring environmental survey data in preparation for the 2011 drilling program. 

Cairn plans to undertake a 3D seismic acquisition program in Greenland during 2011, subject to the necessary approvals. Two 3D seismic survey vessels are expected to be contracted to acquire up to five separate 3D surveys in different areas. 

Negotiations are under way with oilfield service contractors to provide the necessary support for the 2011 exploration program and Environmental and Social Impact studies are ongoing. 

Additional Acreage Acquired 

In December 2010, the Government of Greenland announced the results of the Baffin Bay Bid Round. Cairn was awarded three blocks called Ingoraq, Napariaq and Pitu. Other recipients of block awards included Shell, Statoil, GDF, Conoco-Phillips and Maersk. 

In January 2011, the Government of Greenland confirmed Cairn as the Operator of the Atammik and Lady Franklin blocks and Cairn has acquired the 47.5% interest previously held by Encana. The entitlement interests in these two blocks are now Cairn (Operator) 87.5% and Nunaoil 12.5%. 

The acquisition of the Lady Franklin and Atammik blocks provide additional prospectivity and operational flexibility as these blocks are usually free of sea ice all year round. 

Cairn now holds 102,000 km2 in Greenland which is equivalent to 15 quadrants in the UK North Sea. 

Exploration Evaluation 

Cairn continues to evaluate the results of its 2010 three well exploration drilling campaign on the Sigguk Block in the Disko Bay area. The wells found both gas (biogenic and thermogenic gas) and oil (geochemical evaluation has now identified three oil types) although significant target reservoir rocks were not encountered. 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. 

During 2010 Cairn acquired more than 15,000 km of 2D seismic on the Eqqua, Ingoraq, Napariaq, Pitu, Sigguk and offshore south Greenland blocks, bringing its total 2D seismic database in Greenland to over 30,000 km.



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