Cairn Plunges to 17-Month Low on Abandoning Greenland Well
Cairn slumped 5.1 percent to 334.80 pence, the lowest closing price since Feb. 26, 2010.
The company plugged the LF7-1 exploration well, about 300 kilometers (186 miles) off Nuuk, Greenland’s capital, after it failed to find oil, Edinburgh-based Cairn said in a statement.
Some of the seismic data collected proved “incorrect,” Mike Watts, deputy chief executive officer, said on a conference call. “We are dealing with separate basins.”
Cairn is one of several companies that were awarded Greenland exploration licenses in the last decade, including Exxon Mobil Corp. (XOM), Chevron Corp. and Encana Corp. The Scottish explorer had planned to drill as many as four wells off the island at a cost of $600 million this year, it said in May.
“While clearly a disappointing result, we do not believe the LF7-1 result has an impact on either of the three prospects being drilled this year,” Phil Corbett, an analyst at Royal Bank of Scotland Group Plc, wrote in an e-mailed report. “However, it’s hard to see how this result won’t impact sentiment towards the remainder of the 2011 program.”
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