Cairn Energy secures two rigs for its drilling campaign off Greenland coast

City A.M. Reporter
OIL and gas firm Cairn Energy said it has secured two rigs for its controversial Greenland drilling campaign yesterday, boosting Arctic exploration hopes and sending its shares higher.

Cairn is optimistic it will find substantial oil reserves in largely unexplored Greenland, saying it contracted the rigs to drill up to four wells in the Arctic region in 2011.

The deepwater rigs will be operated by their owner, Norwegian-based Ocean Rigs.

“We would view this update as positive given concerns that Cairn would struggle to secure rigs for this year’s campaign,” said Oriel analyst Richard Rose.

Cairn said it would give further details on its drilling plans in due course, which the analyst said could start as soon as April if the company opts to drill in Southern Greenland, as it secured a $900m (£578m) debt facility to help secure the rigs.

Standard Chartered, Bank of Scotland, Crédit Agricole, HSBC and Société Générale are providing the debt facility, which will also be used to fund general corporate purposes.

Chief executive Bill Gammell said: “By contracting two vessels for the Greenland exploration programme Cairn has increased operational capability and flexibility and continues to demonstrate its focus on safety.”

Shares in Cairn yesterday closed 11.60p higher, or 2.76 per cent, at 431.6p.