By Sarah Young
LONDON, Aug 20 (Reuters) - Britain’s Cairn Energy said new exploration in northwest Africa and Ireland, with drilling due to start in weeks, is more likely to succeed than in Greenland, where it has spent $1.2 billion without finding oil.
After its primary focus on Greenland in 2010 and 2011, the company has spent the past 18 months building up a portfolio of exploration licences in Africa and Ireland.
Cairn said it will drill at least five exploration wells over the next 12 months, two off the coast of Morocco, two off the coast of Senegal, and one off the west coast of Ireland, all of which have a 20 to 25 percent chance of success.
“The previous campaigns in Greenland were very much reconnaissance campaigns. They were one in 10, (or) 10 percent chance of success ... so this is a different programme, a different, different style,” Deputy Chief Executive Officer Mike Watts told reporters on Tuesday.
The company also had access to 3-D seismic information, the latest geological technology, when it made decisions about the new drilling campaign, Watts said, which was not the case for the Greenland exploration.
Spending on frontier exploration in the 2013-2014 period will come in at $510 million, Cairn said.
“Any one of these wells is potentially game-changing for the company,” Chief Executive Simon Thomson said.
Cairn will start drilling the first well in Morocco in September. The programme in total will target over 4 billion barrels of oil equivalent of mean un-risked gross prospective resource, it said.
The company, which is also building a production portfolio in the North Sea, said it was involved in a number of asset exchanges there, including selling a 6 percent position in the Mariner oil field in Britain and acquiring stakes in two Norwegian licences.
Analysts at Jefferies said Cairn’s valuation looked attractive, maintaining their “buy” rating.
“The long wait for the start of Cairn’s high-impact drilling programme is nearly over,” they said.
Cairn’s shares, which are down around 50 percent from an all-time high hit during the Greenland drilling campaign in August 2010, slipped 0.1 percent in mid-morning trading, ahead of the European oil and gas index, which was down 1 percent.
After spending $1.2 billion in recent years to explore in Greenland, Cairn said it would make a decision before the end of this year on whether to drill another well there in the second half of 2014.