Cairn Energy said yesterday it had secured a second drilling unit for this year’s exploration programme offshore western Greenland.
The Stena Don drilling rig will start operations in the summer drilling season, which runs from June until October, on Cairn’s Disko West acreage.
Edinburgh-based Cairn said last month that drillship Stena Forth was to start operations this summer; a year earlier than planned.
Mike Watts, deputy chief executive of Cairn, said yesterday: “Contracting a second drilling rig for Greenland has further increased Cairn’s operational capability and flexibility. We can now look forward to drilling up to four exploration wells in the undrilled Baffin Bay Basin later this year.
“The acceleration of this exploration activity off the west coast also provides us with flexibility to include the previously unmapped and undrilled basins off the southern coast of Greenland in our planned future drilling programmes.”
The value of the contracts for the Stena units was undisclosed, but there is industry speculation they could total £1million a day.
Bank of America Merrill Lynch has now doubled its estimate of Cairn’s capital expenditure in Greenland to £247million this year and raised its net asset value estimate for the company by 27p to 385p.
Reiterating its “buy” rating, the bank said: “We continue to see Cairn offering a compelling combination of supportive news flow and undemanding valuation.”
Shares in Cairn closed last night up 6.74% at 355p.
Cairn, through subsidiary Capricorn Oil, operates six Greenland blocks. It also has non-operated interests in a further two.
Greenland has been attracting strong interest from oil firms in recent years, despite having no tradition in oil production and harsh conditions for exploration.
There are hopes its waters could hold billions of barrels of oil, but a single find of about 400million barrels could be a commercial proposition at just $40 a barrel.
Last October, Cairn said it had agreed a farm-out deal with PICL, the overseas arm of Malaysian state oil company Petronas, on its acreage offshore Greenland.
The Scottish company was selling PICL a 10% interest in its six operated blocks and said that the Malaysian group would also have an option to increase its interest to 20% in any development in these blocks, in return for further payment.
Cairn also said it was selling a 2.3% stake in subsidiary Cairn India to PICL.
The Cairn India share transaction took PICL’s holding in the company to 14.94%, with Cairn retaining just over 62%.
Cairn said PICL would pay about £196million in total: about £152million for the Cairn India stake and £44million to farm into the Greenland blocks. It added that the funds would be used for additional investment in Greenland exploration.
In August, Cairn had said it planned to drill several wells off Greenland in a drilling campaign starting in 2011.
Fife-based global energy consultant McKinnon and Clarke (M&C) has been sold to private-equity firm Lyceum Capital for £22million.
The independent consultant advises business users on energy and environmental legislation in regulated and deregulated markets across 21 countries.
M&C’s turnover for 2008-09 was £22.7million and is expected to hit £60million by 2013 as more businesses turn to the consultancy to manage energy purchasing and complex environmental responsibilities.
An aggressive acquisition strategy across Europe and Australia is also anticipated to contribute to the company’s rapid growth.
Following the deal, M&C founder Sandy McKinnon will retain a minority share in the business and chief executive Simon Northrop will continue to lead the company.
M&C employs 373 staff, 87 of them based north of the border.