UPDATE 2-Cairn says latest Greenland well comes up dry

* Says Gamma-1 well does not find any oil or gas

* Says drilling continues at Delta-1 well, sees minor hydrocarbon indications

* Adds fifth well to 2011 drilling programme

* Shares down 8.3 percent (Adds background, analyst comment, share price,)

By Sarah Young

LONDON, Sept 13 (Reuters) - British oil explorer Cairn Energy said its latest well off the coast of Greenland failed to find oil, disappointing investors, who are looking to the company to open up a new oil province in the Arctic, with a second dry hole.

Cairn, whose focus on Greenland has intensified since a deal to reduce its stake in its Indian unit, said on Tuesday that the Gamma-1 well in the Northern section of its acreage did not find any oil or gas.

Drilling continued at another well, the Delta-1 well, the company said, but so far that well showed only minor indications of hydrocarbons.

The company has already been frustrated in Greenland this year, when the first well of its 2011 exploration programme, LF7-1, came up dry, illustrating the difficulties of finding oil in the vast, little-explored Arctic territory where Cairn holds extensive acreage.

Cairn is leading a charge into offshore Greenland, which explorers believe could hold billions of barrels of oil. Exxon Mobil , Husky Energy and others also plan to drill there.

Shares in Cairn fell 8.3 percent to 286.7 pence at 0752 GMT, topping Britain's bluechip losers list and underperforming the European index of oil and gas companies which was 0.2 percent lower.

"So far the drilling programme in Greenland has yielded little encouragement," Oriel Securities analyst Richard Rose said, calling the result disappointing.

Cairn has recently sought to line up opportunities in Lebanon, hoping to bring a new area into its portfolio, as a long-running deal to sell a stake in its Indian business nears its conclusion and as the Greenland campaign has so far not been successful.

Analysts at Bank of America Merrill Lynch, which acts as broker to the company, were more positive on Greenland, saying that the extent of Cairn's acreage there meant the region could not be written off.

"Crucially, industry interest in Greenland appears extremely high," they said, noting that oil majors such as Shell (RDSa.L) have indicated their aim to accelerate early-stage exploration plans in the area.

Cairn, which is spending around $600 million drilling in Greenland this year, said last month that at some point in the future it will look to bring in a partner to help it explore in Greenland.

The company, which has a narrow window for drilling before harsh Arctic weather sets in, said it would also drill an additional well in Greenland this year, bringing its total number of Arctic wells in 2011 to five.

Drilling in the Arctic has sparked protests from environmental groups who object to looking for oil in the remote, pristine environment and the company and has had its activities interrupted by protesters numerous times.

Cairn is expecting the results of a Cairn India shareholder vote to approve a $6 billion deal to sell a part of its stake in Cairn India to London-listed miner Vedanta on Wednesday, clearing one of the final hurdles to allow it to finalise the deal. (Editing by Rhys Jones; Editing by Hans-Juergen Peters)