Shares dipped four per cent to 445.50p as investors hoping for a major oil find at the well near Greenland were disappointed.
“If explorations are ultimately successful Cairn can unlock a lot of value and materially change the company over the next few months. But Greenland represents a frontier for oil exploration, so it’s a higher risk than is standard,” said one analyst who covers the firm.
The T8-1 well is only the seventh to be drilled in the Arctic, though rivals Exxon Mobil and Chevron have recently piled into the area by snapping up a slew of offshore licences.
The company said underlying revenue for the first half of the year grew 311 per cent to $333m (£215.2m), thanks to strong performance in India.
Cairn swung into pre-tax profit for the period, posting gains of $88m compared to a $22m loss last year.
Chief executive Bill Gammell said he was not troubled by reports of a challenge from state-owned firms to take control of Cairn’s Indian unit. Vedanta Resources has offered up to $8.5bn for a majority stake in Cairn India.
“The government needs to endorse the overall transaction, I’m very conscious of that,” he said in a conference call.
He added that Cairn had a strong track record of achieving government approvals in the past.