Cairn is an independent oil and gas exploration and production company. The main area of focus is South Asia.

            Red = 25 day moving average.           Green = 200 day moving average.

Matrix has slashed its target price for Cairn Energy and maintained its hold rating on the stock, saying that chances are running out for the oil explorer.

There are now only three opportunities for drilling success this year in Greenland, and the chances for achieving it look slim, said analyst Charlie Sharp.

The comments come two days after the group announced that the well on the Lady Franklin Block offshore Greenland reached target depth and is being plugged and abandoned.

The target price is lowered from 410p to 370p.

Cairn abandons Greenland well
StockMarketWire.com
Cairn Energy has plugged and abandoned a well offshore Greenland.

Cairn said the Delta-1 well which was targeting the Cretaceous section beneath the Tertiary volcanic, reached a total depth at 2,977m still within Tertiary volcanics without encountering hydrocarbon shows.

The well was drilled by the Leiv Eiriksson semi-submersible rig which will move south shortly and start operations to re-enter the AT7-1 and drill to the planned TD.

The well, which is in the Atammik block, is located in 909m of water and 198km offshore Nuuk.

This well was temporarily suspended to allow the Leiv Eiriksson to drill the Delta-1 well to optimise the drilling time in the West Disko area.

Cairn also said the Ocean Rig Corcovado has moved 597km south from the Eqqua Block, to the Atammik block, and has started drilling the AT2-1 well, located in a water depth of 1,045m and approximately 198km offshore Nuuk, as a fifth well in the 2011 exploration drilling campaign.

At 9:48am: (LON:CNE) Cairn Energy share price was -13.25p at 282.35p

Cairn hits dry well, as Tullow makes new oil discovery



Rowena Mason, 18:30, Wednesday 28 September 2011

It was a tale of contrasting fortunes for the FTSE 100 (Euronext: VFTSE.NX - news) 's two biggest independent explorers, as Cairn Energy (LSE: CNE.L - news) came up with its sixth dry well in Greenland and Tullow Oil (Stuttgart: 591219 - news) made a new discovery in Ghana.

Cairn's share price dropped a further 5pc to 281.62p, after it did not find oil in the third well it has drilled this year.

The company did not find any success last year either and has only two more wells to go before the freezing Arctic winter weather stops work for the rest of 2011.‎

Cairn has placed all its hopes on finding oil off Greenland, after selling most of its Indian assets to Vedanta for $9bn (5.5bn). It has almost completed this deal after more than a year of delays. Some money will be returned to shareholders and the rest will be used to fund its drilling programme.

It has pledged to spend $600m this year drilling off Greenland, which it hopes will be the world's big new oil frontier. The company has found traces of oil in previous Greenland wells but not enough to make them worth developing.

Meanwhile, FTSE 100 rival Tullow Oil made an oil discovery in Ghana, where it started producing for the first time earlier this year. Tullow, which recently also struck oil off French Guiana, owns almost half the Enyenra discovery.

However, its share price dropped slightly to 13.20. Investors are waiting nervously to see whether the company can manage to strike a good deal with the Ugandan government over the $10bn development and infrastructure for its giant Lake Albert field with two partners - CNOOC (HKSE: 0883.HK - news) and Total (Euronext: FP.NX - news) .

Approval was meant to be given for CNOOC and Total's participation earlier this month, but the parties are still wrangling over a "stabilisation clause". This clause, opposed by the Ugandan government, would make the oil companies more protected from political instability, such as tax changes

Should have included Salamander they are experts at dusters.

Note from Oriel Secs:
"Cairn Energy (CNE, HOLD, 275p) - Greenland update, little further encouragement
Cairn has completed the AT7 well offshore Greenland.
Having encountered 53m of reservoir quality sands as previously announced, MDT samples taken revealed only mud filtrate. Further samples have been sent to labs for analysis but at this stage the interval is interpreted to be water wet.
The company also confirmed that the AT2 well has been plugged and abandoned with minor hydrocarbon shows as previously announced. This now concludes the latest drilling programme in Greenland which, whilst having some minor encouragement, has failed to yield a discovery. Activity on their licences will continue in 2012 with seismic acquisition and interpretation ongoing but with plans to farm-out their position it is highly unlikely in our view that we will see any drilling in Greenland next year.
Although this news should not be a surprise to the market, the shares are likely to come off but this could open up a buying opportunity with the Vedanta deal inching towards completion and a pro-forma NAV post the deal of c310-320p/sh."

Part sale of shareholding in Cairn India Limited ("Cairn India") to Vedanta Resources plc ("Vedanta")
Vedanta has confirmed that it has now satisfied the conditions under the Sale and Purchase Agreement for the acquisition of a controlling shareholding in Cairn India.

As previously announced, Cairn intends to return a substantial proportion of the proceeds from the sale to shareholders. A further announcement in this respect will be made in due course.

Cairn will now retain an approximate 22 per cent shareholding in Cairn India.

Cairn and Vedanta Transaction Completed
Cairn is pleased to announce that the Transaction has now completed. Net proceeds to Cairn from the sale of a 30 per cent shareholding in Cairn India were $4.1 billion in cash. In July 2011, Cairn completed the sale of a 10 per cent shareholding in Cairn India to Vedanta for net proceeds of approximately $1.4 billion in cash.

Following the Transaction, Cairn retains an approximate 22 per cent shareholding in Cairn India.

Cairn now proposes to return approximately $3.5 billion of the sale proceeds to shareholders. The return of cash is expected to be made in a manner that will provide shareholders with an element of choice as to when and in what form they receive the cash. A further announcement will be made in due course.

Monday =

• Cairn, the Edinburgh-based oil explorer, issues a pre-close trading update today. Investors will be watching for any clues on the company's strategy following a series of dry wells in Greenland last year. Cairn has been in talks with potential partners for its Greenland campaign, while looking for new ventures elsewhere. Rumours abound that it could buy a stake in Rockhopper's Falklands discovery.

SP on the move?

CNE have done a reverse split,approx 1 for 3. In the process they have landed CFD holders with an income tax bill. On 5th Feb my shares were worth £2,910, on 6th they were worth £1310 and my account was credited with a £1600 dividend payment. Cash position flat, but I may have to pay income tax on the £1600 divi.

I am mystified by the corporate action. Does anyone have an explanation??

Bobcolby..I shall double check but I am sure that for normal shares this CNE dividend is treated as a capital gain according to Barclays stockbrokers letter, not dividend income.

Tks JJ50

Cairn Energy (LSE: CNE.L - news) , which added 11.7 to 356.6p as two brokers upped their price target for the oil explorer after adjusting for a special dividend payment and share consolidation on Monday.

Having met with management last week, UBS (NYSEArca: DJCI - news) analysts added they were more comfortable with the Cairn story, but they still did not see a compelling enough reason to buy the stock and kept their “neutral” rating.

Time to climb aboard the ride back up!

StockMarketWire.com
Cairn Energy has confirmed that the FAN-1 exploration well, offshore Senegal, has discovered oil. The well, located in 1,427 metres (m) water depth and approximately 100 kilometres offshore in the Sangomar Deep block, has reached a Target Depth (TD) of 4,927 m and was targeting multiple stacked deepwater fans. Preliminary analysis indicates: - 29m of net oil bearing reservoir in Cretaceous sandstones

- No water contact was encountered in a gross oil bearing interval of more than 500m

- Distinct oils types ranging from 28° API up to 41° API indicated so far from a number of oil samples recovered to surface

- Initial gross STOIIP estimates for the FAN-1 well range from P90, 250 mmbbls, P50, 950 mmbbls to P10, 2,500 mmbbls and are broadly in line with pre-drill STOIIP estimates

As stated prior to the commencement of operations there are no plans for immediate well testing. Further evaluation will now be required to calibrate the well with the existing 3D seismic in order to determine future plans and optimal follow up locations to determine the extent of the discovered resource. Once operations are completed on the FAN-1 well, the rig will move to complete the second well, SNE-1 where the top hole has been drilled pending re-entry. This Shelf Edge Prospect targeting a dual objective in 1,100m water depth is in the Sangomar Deep block. The FAN-1 well was drilled using the semi-submersible drilling unit "Cajun Express". It is the third well in Cairn's North West Africa programme and first in Senegal. Cairn has a 40% Working Interest (WI) in three blocks offshore Senegal (Sangomar Deep, Sangomar Offshore and Rusifique) ConocoPhillips has 35% WI, FAR Ltd 15% WI and Petrosen, the national oil company of Senegal 10% WI. The three blocks cover 7,490 km2.

Chief executive Simon Thomson said: "The oil discovered in the FAN-1 prospect is an important event for Senegal and the Joint Venture.

"£We have encountered a very substantial oil bearing interval which may have significant potential as a standalone discovery. Furthermore, this result materially upgrades the prospectivity of the block with a proven petroleum system and a number of deep fan and shelf prospects established.

"Work is already under way with the joint venture partners to determine follow up activity which is targeted for 2015 onwards.

"Cairn looks forward to working with the Government of Senegal and our partners to realise the full potential from this large acreage position off the West coast of Senegal."

RBC comment:
"FAN-1 Discovers Oil: Cairn Energy announced that the FAN-1 well on the Sangomar Deep Block (Cairn 40%, Conoco 35%, FAR 15%, Petrosen 10%) offshore Senegal has discovered oil. The well drilled in 1,427m water depth reached 4,927m targeting multiple stacked deepwater fans finding 500m gross oil column (no oil/water contact was encountered) with 29m net oil-bearing reservoir in Cretaceous sandstones (significantly there is one main 10-15m reservoir). Oil types recovered ranged from 28-41API with samples already sent for further lab tests. The initial gross oil in place ranges from P90 of 250mmbbls to P10 2,500mmbbls with a P50 case of 950mmbbls (~300mmbbls recoverable). No well test is planned and calibration work will continue using the existing 3D dataset to determine follow-on locations. Following this result we upgrade the stock to Outperform and increase our price target to 250p/share.
Follow-on Potential: The well result today, where light/medium oil and good quality reservoir was encountered, has derisked four similar Cretaceous fan systems (see Exhibit 2) identified on 3D seismic across the ~7,490km2 acreage position. Although the 2015 exploration campaign is still to be confirmed we anticipate further appraisal/exploration activity next year. The next well, SNE-1, is closer to shore targeting the Shelf Edge 438mmbbls (mean unrisked prospective resources) prospect in a different play type albeit oil source has been derisked by the FAN-1 result. The well (-34/+137p/share risking) should restart shortly and reach TD through November.
Relatively Attractive Fiscal Terms: We value the FAN discovery at $9/bbl on a 2P NPV10 basis. This is based on a 300mmbbl model oil development partly using Tullow's Jubilee field as an analogy. We include a $102/bbl long-term oil price (based on RBCs long-term Brent forecast), first oil in 2022 (8 years to first oil vs. 4 years for Jubilee), capex of $12/bbl (in line with Jubilee) and due to remote location higher operating costs ($25/bbl). This generates a ~$1bn NPV10 valuation fully unrisked based on these relatively conservative assumptions.
Portfolio Management/Funding Flexibility: At the mid-year Cairn had about $1.1bn cash with around $400m of development and exploration spending planned through H2/14. Given the recent farm-down of Catcher (selling 10% to Dyas for a $182m carry) that reduced capex exposure on the project by $380m ahead of first oil in 2017, the company has increasing flexibility to maintain frontier exploration. We anticipate further details on 2015 drilling at the IMS on 30 October."

StockMarketWire.com
Beaufort Securities upgrades Cairn Energy to buy from hold.

StockMarketWire.com
Cairn Energy has announced a discovery of high quality oil in the second well in the Senegal exploration programme.

The SNE-1 well is located in 1,100 metres water depth and approximately 100 kilometres (km) offshore in the Sangomar Offshore block with a target depth of ~3,000 m and targeting the Shelf Edge Prospect.

Intermediate logging of the SNE-1 well has confirmed hydrocarbons in the Cretaceous clastics objective which is of similar age to oil bearing sands found approximately 24 km away in FAN-1.

As operator, Cairn has now issued 'notices of discovery' for the SNE-1 well and FAN-1 well to the Government of Senegal on behalf of the joint venture.

Initial analysis of the SNE-1 well indicates:

- 95m gross oil bearing column with a gas cap

- Excellent reservoir sands with net oil pay of 36m

- Oil of 32 degrees API from samples of gas, oil and water recovered to surface

- Preliminary estimates of the Contingent Resource range from P90, 150 mmbbls, P50, 330 mmbbls and P10, 670 mmbbls recoverable

Further evaluation of this zone is continuing. The deeper target of karstified and fractured Lower Cretaceous shelf carbonates is yet to be reached. A further announcement will be issued once operations are completed on SNE-1

Watching.

Big faller today.